Alphabet Settles Suit Over Executives’ Exit Pay, Coverups Linked to Sexual Misconduct

By and | September 28, 2020

Alphabet Inc. on Friday settled a shareholder lawsuit that accused the Google parent of covering up lavish exit packages to executives found responsible for sexual misconduct, saying it would overhaul workplace policies and increase oversight of its diversity efforts.

The company will prohibit severance packages to employees who are subject to any pending investigation for sexual misconduct or retaliation. Sexual misconduct accusations against senior executives will be investigated by a “rapid response” team, and they will be barred from amending their stock-selling plans while under investigation.

Penalties and training will be made more consistent. And Google employees will be able to publicly discuss the facts of their cases.

Alphabet to Fund $310 Million Workplace Program

The Alphabet and shareholders’ stipulation of the settlement in California’s Santa Clara County Superior Court includes a provision that Alphabet will fund a $310 million commitment to workplace initiatives and programs spanning 10 years focusing on (1) expanding the pool of historically underrepresented technologists; (2) hiring, progression, and retention of historically underrepresented talent at Alphabet and, in particular, Google; (3) fostering respectful, equitable, and inclusive workplace cultures; and (4) helping historically underrepresented groups and individuals succeed with their businesses and in the digital economy and tech industry.

A new council to oversee diversity efforts will include executives including CEO Sundar Pichai as well as independent experts such as a retired judge and outside attorneys. The council will report quarterly to the leadership development committee of Alphabet’s board.

The company will spend $310 million over a decade on diversity initiatives, such as computer science training for minorities, and Google will expand globally its U.S. policy of not considering prior salaries in setting wages for new hires.

Julie Goldsmith Reiser, an attorney who handled the case for shareholders, said the commitments raised the bar beyond what any other company facing diversity and sexual harassment challenges has agreed to.

“It is a lot of tools that Alphabet will have in the toolbox to make its workplace better,” she said.

Several changes that already applied to Google also will be enforced Alphabet-wide, including making arbitration optional for employee and contractor sexual harassment claims.

The lawsuit from last year in Santa Clara County Superior Court in California accused Alphabet leadership of making misguided decisions around sexual misconduct issues that hurt the company’s reputation and share price, as Google and other companies faced a reckoning during the Me Too movement.

(Reporting by Ayanti Bera and Munsif Vengattil in Bengaluru, Paresh Dave in San Francisco; Editing by Aditya Soni and Cynthia Osterman)

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Latest Comments

  • September 28, 2020 at 1:15 pm
    BFVA says:
    Polar....strictly out of curiosity, why the need to change Google to "Goo-gul" and Alphabet to "ALFA-bet"?
  • September 28, 2020 at 7:57 am
    Andrew G. Simpson says:
    Misleading? Another gratuitous slap at the media. Alphabet is the corporation's name. Alphabet is more than just Google. Even if you don't know that, we think most readers do ... read more
  • September 28, 2020 at 7:43 am
    Polar AC Bearrett says:
    "Alphabet, Inc." is used in the misleading title to disguise the fact that it is Goo-gul execs who are accused of wrong-doing. How many people do 'Alphabet searches'? I don't,... read more

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