Shareholders Sue Alphabet Board Over Allegations That It Covered Sexual Misconduct Claims

Cornelia Mascio
Gennaio 13, 2019

A Google shareholder sued the board of directors and senior management of its parent company Alphabet Inc on Thursday, alleging that they approved vast severance packages to cover up an environment of sexual misconduct, The New York Times reported.

In another chapter of the tumultuous goings-on within Google, one of Alphabet's shareholders is suing the company, on behalf of itself, over the payouts given to Google executives who were accused of sexual misconduct.

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.

In October, the New York Times reported that Rubin's departure followed an investigation into a claim by a female employee that he had forced her to perform oral sex.

According to the plaintiff, the lawsuits seek to force Google to change its governance and stop future misconducts. Reuters reported that the filings also claim that the internal investigations found that the sexual allegations are credible.

The lawsuit cites non-public evidence, minutes of the meeting Alphabet board meetings from 2014 and 2016, which were obtained via a shareholder inspection demand, where the board members discussed the situation at length.

Google CEO Sundar Pichai was forced to apologize past year to employees over how the company handled sexual misconduct claims. It is stated that while working at Google, Rubin was paying money to women that they "belonged to him". 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.

Another suit, filed on behalf of the Northern California Pipe Trades Pension Plan and Teamsters Local 272 Labor Management Pension Fund, made similar claims.

The suit also proposes several actions to better tackle sexual harassment and discrimination cases. "Andy left Google voluntarily".

The Times report caused widespread anger among Alphabet staff, with thousands of employees staging walkouts at Google offices around the world.

Representatives of Google and John Doerr declined to comment.

One of the suits alleges Google suffered millions of dollars in damages in part from lost productivity when employees walked off the job in protest of the payouts to disgraced executives.

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