Google owner Alphabet sued by shareholders over sexual harassment payouts

11 Jan 2019212 Views

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Google office in Singapore. Image: mentatdgt/Depositphotos.com

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Large payouts to former executives accused of sexual harassment prompted a global walkout at Google last year.

Shareholders in Alphabet, the parent company of Google, have filed a lawsuit against the company over payouts made to former executives accused of sexual harassment.

In the lawsuit, the shareholders allege that Alphabet breached its duty to shareholders when it approved large exit packages for employees after determining there were credible allegations of sexual misconduct.

In November, Google workers staged a global walkout to protest the handling of sexual harassment cases by the company. Workers were outraged when it emerged in media reports that Android creator Andy Rubin received a $90m severance package when he left the company, and that a severance deal was also reached with Amit Singhal, head of Google’s search unit until 2016, despite there being knowledge of the accusations made against them. Rubin and Singhal have denied the allegations.

Brand damage

In October, Google CEO Sundar Pichai issued a statement in the wake of the Rubin story, saying the company would be taking a much tougher stance when it comes to sexual harassment and misconduct allegations. He said that the company was committed to providing a “safe and inclusive workplace”.

However, in a lawsuit filed at San Mateo Superior Court by Alphabet shareholder James Martin, company shareholders are seeking three new independent directors for the Alphabet board and an end to the dual-class voting structure of the stock – a move that would diminish the power of co-founders Larry Page and Sergey Brin.

The suit – which is the second such suit to be filed this week after two pension funds filed a similar suit in the same court – also calls for unspecified financial damages and for those executives who received payouts to return these payments to the company.

Documents obtained by Martin under a shareholder inspection demand indicate minutes of board committee meetings where the executives’ situations were discussed.

In his suit, Martin plans to show that Google lost hundreds of millions of dollars in damages in terms of payouts to executives and lost productivity due to employees around the world doing a walkout in protest, as well as damages to the company’s brand reputation.

Google office in Singapore. Image: mentatdgt/Depositphotos.com

John Kennedy is an award-winning technology journalist who served as editor of Siliconrepublic.com for 17 years.

editorial@siliconrepublic.com