The Atlanta Journal-Constitution
Alphabet
directors had approved a $90 million exit package for a star executive, Andy Rubin, even after an investigation deemed a sexual harassment claim against him credible.
Five lawsuits in California were eventually consolidated into one case. One of them, brought by James Martin, an Alphabet shareholder, said board members had let illegal conduct proliferate, ignored their fiduciary duties and became enablers of sexual harassment and discrimination.
Other shareholder suits are awaiting action in federal court and in Delaware, where Alphabet is incorporated. The federal cases are on hold pending the outcome of the California suits, while the matter in Delaware is in mediation.
Julie Goldsmith Reiser, a partner at Cohen Milstein Sellers & Toll, one of the firms representing Alphabet shareholders, said the $310 million commitment was meaningful because the tech giant was paying the money directly and it was earmarked to address one of the root problems at the company.
“The settlement fundamentally alters Alphabet’s workplace policies,” Reiser said.
The settlement with Alphabet also does not direct money to the people who sued, but it does steer funding and policies to prevent the bad behavior from recurring. Reiser hailed it for setting a new level of corporate governance and accountability, as well as a standard for the rest of the technology industry. The level of board involvement and executive accountability, she said, “goes far beyond what we’ve seen in other settlements.”
Alphabet’s board will receive more information about how the company is handling claims of sexual harassment, discrimination and retaliation, and directors will receive regular reports on the compensation of any senior executives found to have engaged in serious misconduct.
Shortly after the report about the payouts to Rubin and other Google executives accused of sexual misconduct, 20,000 workers staged a walkout demanding changes to how the company treats employees. In response, Google agreed to stop forced arbitration in individual cases of sexual harassment or assault. It later expanded the policy to all employee disputes with the company.