Alphabet to fund $310 million diversity initiative to settle sexual misconduct lawsuit from shareholders

Bank review, current USBR score and consumer report

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.

Google parent Alphabet has agreed to commit $310 million to diversity, equity, and inclusion initiatives as part of a settlement for a series of sexual harassment and misconduct lawsuits filed against some of the company’s officers and directors. 

As part of the settlement, Alphabet will establish a diversity, equity, and inclusion advisory council featuring outside experts, which include retired judge and Harvard Law School professor Nancy Gertner and former member of the Equal Employment Opportunity Commission Fred Alvarez, as well as company executives including CEO Sundar Pichai and Google chief legal officer Kent Walker. The settlement also ends Alphabet’s mandatory arbitration for harassment, discrimination, and retaliation-related disputes between employees or contractors and the company. It limits Google’s use of nondisclosure agreements and ensures that the recommended consequences for misconduct are equal across business units. 

“This settlement will not only change and improve the culture at Google, but it will set the standard for culture change at tech companies throughout Silicon Valley,” Ann Ravel, an attorney from Renne Public Law Group who led parts of the settlement negotiation, said in a release. 

“Recent years have involved a lot of introspection and work to make sure we’re providing a safe and inclusive workplace for every employee,” said Google vice president of people operations Eileen Naughton in a blog post Friday. “That doesn’t stop here and you’ll receive reports on our progress as we move forward.”

Google Staff Walkout To Protest Sexual Misconduct
A Google employee holds a sign during a walkout to protest how the tech giant handled sexual misconduct at Jackson Square Park in New York on Nov. 1, 2018. Now, in September 2020, parent company Alphabet has announced a $310 million commitment to diversity, equity, and inclusion initiatives.
Peter Foley—Bloomberg/Getty Images

The settlement represents one of the largest public commitments to diversity and inclusion efforts by a tech company and follows numerous complaints from employees about sexual harassment and misconduct. Android creator Andy Rubin and Alphabet’s top lawyer David Drummond, both of whom stepped down from the company with little consequence, are among executives who have been accused of inappropriate behavior at the company. And in 2018 the issue hit a new boiling point when 20,000 Google workers staged a walkout to protest the company’s mismanagement of employee complaints.

The multimillion-dollar settlement stems from a complaint filed in January last year by Alphabet shareholders Northern California Pipe Trades Pension Plan and Teamsters Local 272 Labor Management Pension Fund. The complaint claims that Alphabet and its leadership breached fiduciary duty and created a “culture of concealment” that led to the coverup of a “long-standing pattern of sexual harassment and discrimination by high-powered male executives” as well as a “serious data breach” related to Google+.

Amid the company’s “brogrammer” culture that harassed and discriminated against women, Alphabet offered high-profile executives accused of misconduct “wasteful exit packages worth millions” while the company’s leadership hid the reasons for their departures, the lawsuit claims. Rubin, for example, was paid $90 million to leave the company. The lawsuit also says 48 cases of sexual harassment had been reported over the previous two years, including 13 that implicated senior managers or executives. 

Julie Goldsmith Reiser, partner at Cohen Milstein Sellers & Toll who helped lead the settlement negotiation, said the settlement “fundamentally alters Alphabet’s workplace policies” and gives the company the chance to lead the industry in workplace equity.

More must-read tech coverage from Fortune:

11 Things You Should Know Before You Get Your First Credit Card

A credit card may seem like just another tool to help you make purchases, but it can be much more. When used responsibly, a credit card can help you build

What Is a Balance Transfer, and Should I Consider Doing One?

In a perfect world, no one would carry a balance on their credit card. We would all pay our bills in full each month and never have to worry about

How Is Credit Card Interest Calculated?

So your bank tells you that your credit card has a 15% APR. What does that actually mean? How does your bank calculate your interest rate, and how does that translate into how much you actually pay? …

What Is a Balance Transfer, and Should I Consider Doing One?

In a perfect world, no one would carry a balance on their credit card. We would all pay our bills in full each month and never have to worry about

Subscribe to our e-mail list and stay up-to-date with all our news.

The US Bank Review is an independent authority and bank watchdog group monitoring financial institutions operating the in United States. We have no affiliation with any banks featured, reviewed or profiled. All rights reserved. Terms of use and Privacy Policy