Google’s Alphabet Settles With Shareholders Over Payoffs To Execs Accused Of Harassment

Google’s parent, Alphabet, has settled a lawsuit with angry shareholders after the company made lucrative severance deals with executives accused of sexual harassment.

As part of the settlement, Alphabet has agreed to expand its policy of prohibiting severance for those terminated for misconduct to include anyone under investigation for “sexual misconduct or retaliation,” according to a company blog post.

In addition, Alphabet will commit $310 million to corporate diversity programs over the next 10 years. Alphabet also announced the creation of an independent audit board to oversee harassment complaints, and the current board will play a larger role in supervising complaints.

“This is a landmark settlement,” Louise Renne, an attorney representing the shareholders, told Bloomberg. Her firm characterized the settlement as the “largest and most holistic settlement” in a shareholder case involving sexual misconduct charges since 21st Century Fox Inc. settled a similar case three years ago.

In other measures, arbitration will no longer be mandatory for workers accusing a boss or co-worker of sexual harassment or other misconduct throughout the company. And employees will not have to sign nondisclosure agreements to keep their accusations secret.

The agreement, filed Friday in California Superior Court, settled consolidated lawsuits from shareholders filed in 2019 that accused Alphabet of breaching its fiduciary duty to shareholders when it retained at high salaries — then massively paid off in severance — male executives credibly accused of sexual harassment. 

Android creator Andy Rubin was given a $90 million exit package, along with a $150 million stock grant to be paid out over several years when he left the company under a cloud in 2014, The New York Times was the first to report. The deal was characterized as “corporate waste” by one shareholder, James Martin, who accused the board of being an enabler of sexual harassment and discrimination.

Rubin has denied the claims against him.

About 20,000 Google employees staged a walkout in 2018 over how the company handled the executives’ cases and others following the reports. 

Other shareholder suits are awaiting action in federal court and in Delaware, where Alphabet is incorporated, according to The New York Times.

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