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Alphabet Settles Shareholder Suits Regarding Sexual Harassment Claims

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Google’s parent company Alphabet has settled a series of shareholder lawsuits filed in 2018 after it was reported the board of directors approved a $90 million exit package for executive Andy Rubin, even though an investigation found a sexual harassment claim made against him to be credible.

Key Facts

The settlement filed Friday in California Superior Court says Alphabet has made multiple commitments for its handling of future sexual misconduct claims, including that employees will no longer be forced to settle disputes in private arbitration, confidentiality restrictions for settling harassment and discrimination cases will be limited and workplace romances between managers and subordinates will be banned.

Alphabet has also agreed to greater board oversight in future cases and to spend $310 million on corporate diversity programs throughout the next decade.

The settlement does not direct money to the people who sued but will be used to steer funding and policies to improve how sexual harassment claims are handled.

Alphabet and its directors denied any wrongdoing in the document laying out the agreement.

Five of the lawsuits filed in California were consolidated into one case, one of which was brought by Alphabet shareholder James Martin who claimed board members enabled sexual harassment and discrimination by allowing illegal conduct to increase and ignored their fiduciary duties.

Other shareholder suits are awaiting action in federal court pending the outcome of the California suits and a suit in Delaware, where Alphabet is incorporated, is in mediation. 

Tangent

Similar shareholder lawsuits have cropped up since the start of the recent “Me Too” movement, including at 21st Century Fox and Wynn Resorts. Damages won by shareholders were paid by insurers to the companies, instead of to the individuals who sued.

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