A Google shareholder sued the board of directors and senior management of its parent company Alphabet Inc on Thursday, alleging that they approved immense severance packages to cover up an environment of sexual misconduct, The New York Times reported.
The lawsuit was filed in the California Supreme Court by Alphabet investor James Martin, who said that the company’s top management had breached its duties to investors by covering up harassment claims. The suit named 12 current and former directors of Alphabet, including co-founder Larry Page and Google Chief Executive Officer Sundar Pichai. The suit not only seeks damages but also changes in the company’s share structure and corporate governance.
The lawsuit came after a report published in The New York Times claimed that Android creator Andy Rubin received a $90-million (about Rs 633 crore at current exchange rate) exit package in 2014 despite facing sexual misconduct allegations. It also alleged that Google protected two other unnamed executives accused of sexual misconduct, removing one with a severance package while retaining another.
The minutes from board meetings show that Alphabet’s directors were directly involved in behaviour that harmed the company, Martin’s lawyers Ann Ravel, Louise Renne and Frank Bottini said, according to The Guardian.
“The directors’ wrongful conduct allowed the illegal conduct to proliferate and continue,” the complaint said. “As such, members of Alphabet’s board were knowing and direct enablers of the sexual harassment and discrimination.”
“Google and the board of directors have direct personal liability for covering up the wrongdoing and allowing it to continue for years, thereby significantly harming women employees at Google,” Frank Bottini was quoted as saying. “They would never sue themselves…[so] the law allows a current shareholder to bring a case against the board.”
“There has been substantial evidence of sexual harassment at Google, and yet there hasn’t been the appropriate follow-through,” said Louis Renne. “In fact, quite to the contrary, the perpetrators of the sexual harassment have been awarded handsomely…What Ann and Frank and I are saying is ‘Time’s up.’ Now it’s really time to start doing the right thing.”
The lawsuit claimed that according to the minutes, the payouts for Rubin was approved by board members “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”.
News of Rubin’s payout had sparked protests across all Google offices, with thousands of employees staging walkouts in protest against the company’s treatment of women. In November, days after the walkouts, Google announced a number of changes to its sexual harassment policies, including an end to forced arbitration for individual sexual harassment and sexual assault claims, enabling lawsuits in these matters. However, several other core demands were ignored.