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Shareholders Sue Google's Parent Company for Alleged Sexual Misconduct Cover-Up

The lawsuit names a total 12 current and former Alphabet directors, including Google chief Sundar Pichai.

New Delhi: Despite “credible” allegations of sexual harassment against Google’s parent company, Alphabet’s senior executive Andy Rubin, a shareholder lawsuit claims the board of directors set up an exit package of $90 million for him.

The lawsuit was filed in California’s Superior Court, and said minutes from the board meeting demonstrate how the directors agreed to accept Rubin’s resignation in exchange for a sizeable severance in order to “keep the matter quiet”. The New York Times reported that these minutes were redacted in the court filing.

In October 2018, a female employee accused Rubin of coercing her into performing oral sex. Once news of the allegation reached Google, it reportedly paid the exit package. It was not clear at that time exactly how much the board of directors knew about the allegations or Google’s decision to make the payment to Rubin.

Also read: Google Gave Android Creator Andy Rubin a $90-Mn Exit Package After Sexual Harassment Allegations

The lawsuit directly accuses the directors for their wrongful conduct which allowed such instances sexual harassment to proliferate and persist in the offices of Google. The lawsuit alleges they were “direct enablers of sexual harassment and discrimination.”

In November last year, news reports of the continued employment of other male executives accused of sexual harassment at Google led to an employee walkout. Subsequently, the company agreed to cease forced arbitration for employees accused of sexual harassment, but did not give into other demands, including employee representation on the board.

Andy Rubin. Credit: Reuters

The lawsuit was brought in by an Alphabet investor, James Martin, who alleged that the company had breached its fiduciary duties by covering up cases of sexual harassment. The lawsuit seeks damages, overall improvement of oversight of sexual harassment, a cessation of nondisclosure agreements for employees and better corporate governance frameworks.

The suit also asks Alphabet to alter its shareholder voting structure, which currently provides the co-founders, Larry Page and Sergey Brin, majority voting rights even though they no longer own the majority of shares.

Also read: Google Changes Sexual Harassment Policies in Response to Protestors

The lawsuit names a total 12 current and former Alphabet directors, including Larry Page, Alphabet’s CEO and Sundar Pichai, Google’s chief executive. The lawsuit also names Amit Singhal, a search executive who, reportedly, also received an exit package after accusations of sexual harassment were levelled against him.The lawyers demanded the money paid to Rubin and Singhal by Alphabet be returned to shareholders.

According to the New York TimesAlphabet’s board is also the target of another lawsuit in San Mateo, California, where the Northern California Pipe Trades Pension Plan and pension fund for local Teamsters group allege a “breach of fiduciary duties, unjust enrichment and corporate waste.”

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