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

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This article was originally published on Fortune.

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, filed on Friday in California Superior Court, 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.”

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, which later was combined with four other lawsuits, 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.

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