Shareholders sue Google over payouts to executives accused of sexual harassmentJanuary 11, 2019
Shareholders today filed a lawsuit against Google parent company Alphabet, arguing that the company had breached its duty to shareholders when it approved large exit packages for former executives after determining that there were credible allegations of sexual misconduct.
The suit was filed this morning in San Mateo Superior Court by Alphabet shareholder James Martin. The suit seeks three new independent directors for the Alphabet board, and an end to the dual-class voting structure of the stock — moves that would greatly diminish the power held by co-founders Larry Page and Sergey Brin. It also calls for executives who received payouts to return them to the company. It also seeks unspecified financial damages. Google did not immediately respond to a request for comment.
The complaint is the second such suit to be filed this week. Two pension funds filed a similar lawsuit in San Mateo Superior Court on Wednesday, the San Francisco Chronicle reported.
In October, the New York Times reported that Google had given former Android boss Andy Rubin a $90 million exit package after he was accused of sexual misconduct by another employee. The same article said that Amit Singhal, who formerly ran Google search, had also received an exit package worth millions of dollars after having been accused of groping an employee at a work event. Both men have denied any wrongdoing.
“We are saying to the board of directors that it’s time they stand up and do what Google says — ‘do the right thing,” said Louise Renne, one of the lawyers who filed the suit, in a press conference today. (“Do the right thing” became Alphabet’s motto after it retired “don’t be evil.”) “There has been substantial evidence of sexual harassment at Google. And yet there hasn’t been the appropriate follow-through. In fact, quite to the contrary. The perpetrators of the sexual harassment have been rewarded handsomely — in one case, by a $90M payout. And that’s just wrong.”
Furor over the revelations led more than 20,000 Googlers to walk off the job in November. In the wake of the walkout, Googlers have negotiated with executives for an end to forced arbitration in cases of harassment and discrimination; a commitment to “end pay and opportunity inequity”; a public report on incidents of sexual harassment at the company; and other concessions. Google agreed to end forced arbitration in cases of sexual harassment, a move that was soon followed by other tech companies, including Facebook.
Attorneys in the case said they had not coordinated with organizers of the walkout.
In the case of Rubin, attorneys say that Google agreed to pay him out for fear that if they fired him for cause, he would have gone public with information about other Google executives who have had relationships with employees.
“The rational and reasonable inference from these facts is that Larry Page and Google’s directors wanted to make sure Rubin was paid handsomely to ensure his silence, since they apparently feared that if they fired Rubin for cause, he would sue Google for wrongful termination and all the tawdry details of sexual harassment by senior executives at Google would become public.”
The case relies in part on several pages of board meeting minutes from 2014 and 2016, when board members discussed the Rubin and Singhal exit packages. Those minutes were redacted from the public complaint due to a confidentiality agreement with Google. A lawyer for the case said he hoped the minutes would be unsealed by a judge.
You can read the full lawsuit here.