Alphabet settles shareholder lawsuit over executive sexual misconduct

Google parent company Alphabet has settled a shareholder lawsuit over its handling of sexual misconduct. The company has announced policy changes related to the settlement, including a $310 million fund for diversity, equity, and inclusion initiatives. This resolves a complaint that was filed in 2019, following an explosive report that Google offered multimillion-dollar exit packages to executives who were credibly accused of sexual assault or harassment, including former Android head Andy Rubin.

CNBC reported the news earlier today. “This settlement is likely to have lasting, long-term success in bringing about major, transformative changes at Alphabet,” the shareholders’ attorney said in a statement to CNBC. The statement praises the departure of “enablers and perpetrators,” including the January resignation of chief legal officer David Drummond — who was also investigated for inappropriate relationships with women — as well as former Google CEO Eric Schmidt’s departure from Alphabet’s board.

Alphabet had already changed some policies after employees protested, including backing off its forced arbitration rules. Now, Google’s people operations VP Eileen Naughton formally announced five principles apparently developed with input from shareholders and employees. They include committing to a “respectful, safe, and inclusive working environment for all employees and members of our extended workforce” and offering greater transparency around misconduct investigations.

In addition to these principles, Alphabet will set up a new diversity, equity, and inclusion advisory council to oversee changes at the company. It will prohibit severance packages for employees who are the subject of a pending sexual misconduct investigation, following an earlier prohibition for employees who were terminated because of misconduct.