Google’s parent company Alphabet has settled a shareholder lawsuit over the company’s handling of sexual misconduct allegations.
As part of the settlement, announced Friday, Alphabet will commit $310 million to corporate diversity initiatives, as well as form an advisory board dedicated to diversity and equality issues. The board will include CEO Sundar Pichai as well as outside experts.
“The settlement fundamentally alters Alphabet’s workplace policies,” said Julie Goldsmith Reiser, a partner at Cohen Milstein Sellers & Toll, one of the firms representing Alphabet shareholders. “These changes, along with the financial commitment to DEI initiatives, position Alphabet to lead as much in workplace equity as it is does in technology and innovation.”
The lawsuit stemmed from sexual misconduct allegations reported two years ago, creator of Google’s Android mobile operating system. In the face of those claims, Alphabet’s board reportedly granted him a $90 million exit package. The reports caused shockwaves inside Google, leading to in which more than 20,000 employees marched out of their offices around the world.
Alphabet is also making changes to its arbitration policies, a subject of focus for activists inside Google when they organized the walkout. Last year, Google ended forced arbitration for employment disputes. Now Alphabet is removing arbitration requirements for the parts of the company outside of Google, or “other bets” including its self-driving car division Waymo or health sciences arm Verily. Google will also be more limited in its use of non-disclosure agreements.
As part of the changes, Google is also prohibiting executives from receiving severance if they the subject of a pending investigation for sexual misconduct, harassment or retaliation, Eileen Naughton, the company’s human resources chief, said in a blog post Friday.
“Over the past several years, we have been taking a harder line on inappropriate conduct, and have worked to provide better support to the people who report it,” she wrote. “Protecting our workplace and culture means getting both of these things right, and in recent years we’ve worked hard to set and uphold higher standards for the whole company.”
In addition to Pichai, Google executives on the new diversity council will include Chief Legal Officer Kent Walker, Chief Diversity Officer Melonie Parker, and Senior Vice President Jen Fitzpatrick. Outside members will include Nancy Gertner, a retired federal judge and Harvard Law School lecturer, and Fred Alvarez, a former member of the Equal Employment Opportunity Commission.