Alphabet settles shareholder lawsuit over its handling of sexual harassment claims, agrees to eliminate mandatory arbitration and limit Google's use of NDAs
- Alphabet has reached a settlement with shareholders in a lawsuit alleging sexual misconduct mishandling and cover-up by executives …
CNBCJennifer Elias
Context & Ripple Effects
This settlement closes a lawsuit that began with a shareholder suit against Alphabet's board in January 2019, alleging directors breached fiduciary duty by covering up executive sexual misconduct and approving Andy Rubin's exit payout. The board's defense problem was compounded by [[a:947619|its own outside-law-firm probe of senior execs including Chief Legal Officer David Drummond]].
What changed today is enforcement teeth: Google had already made arbitration optional for individual sexual harassment claims as a voluntary policy concession after the 2018 walkouts, but this settlement makes eliminating mandatory arbitration and limiting NDAs binding commitments owed to shareholders. It also echoes the separate $500M+ compliance-rebuild offer Alphabet later used to settle an antitrust-flavored shareholder suit — a pattern of shareholders extracting structural concessions rather than cash.
First-order effects
Alphabet must convert its voluntary arbitration opt-out into full elimination of mandatory arbitration and restrict NDA use across Google, with the board accountable to shareholders for compliance.
Executives named in the underlying allegations — from the Rubin payout to the Drummond probe — see the reputational chapter formally closed via settlement rather than a court verdict.
Second-order effects
Other large-cap tech boards facing similar derivative suits lose the 'we already reformed voluntarily' defense, since Alphabet conceded binding governance changes after making the same voluntary pledge in 2018.
Litigation funders and institutional investors get a template for monetizing workplace-misconduct claims through fiduciary-duty suits, shifting pressure onto rivals' compensation and exit-package practices.
Third-order effects
If the pattern holds — policy concession under employee pressure, then binding settlement under shareholder pressure — mandatory arbitration and NDAs become structural liabilities that boards retire preemptively across tech, with governance terms set increasingly by investor litigation rather than HR policy.
The trend: Shareholder derivative suits are becoming the mechanism that hardens tech companies' voluntary workplace reforms into enforceable governance commitments.
One more thought about today's Google settlement - The person who has never had to answer for his role in the exit packages for Andy Rubin is Larry Page. He rammed it through the board, handed Rubin $150 million of stock in the middle of an investigation into his behavior 1/x
NEW: Google has settled its shareholder lawsuit. It includes $310 million for diversity workplace initiatives, reforms to board procedures and updated workplace policies https://www.nytimes.com/...
Accountability for this situation has been so slow and so meager. Dai published his story two years ago. https://www.nytimes.com/... https://twitter.com/...
The Google walkout happened ~2 years ago Glad to see Google settlement stopping payouts to abusers, really ending forced arbitration, & limiting NDAs It's small, it's late, & it's a lesson in the need to assess movements' success over years, not days https://www.nytimes.com/...
Baby steps: Google bans severance and stock sale bans during sexual harassment investigations, ends mandatory arbitration, limits NDAs. Commits $310 million for outside diversity, equity and inclusion advisory council. Who they hire will reveal its intent https://www.cnbc.com/...
This. 👇 While the board was terminating him, Rubin simply said “I want to talk to Larry.” Afterward got a golden parachute. Rubin was already toxic, so what leverage did he have to extract $150mn from Larry Page? PS - despite being “gone” Page has voting control over Alphabet htt…
He's been doing this for 20+ years, and warnings circulated about him in whisper networks for that long. No matter how much he swears up and down that he's changed, or that they're “just rumors”, he will make your organization a poisonous place to work. https://twitter.com/...
Reminder that many abusers and harassers have a history and are repeat offenders who are very good at manipulating people into keeping secrets, so when people tell you about them believe early and often. https://twitter.com/...
whoa, I've healed enough that I momentarily blanked on my rapist's name. It's Richard DeVaul (@rdevaul). After resigning from Google & deleting his Twitter after that story, he's back on tech twitter, and is the CTO of a company called Prometheus Fuels, according to his LinkedIn …
Alphabet settles shareholder lawsuit- I am proud to be one of the 4 lead attorneys bringing this case. Settling it on the day RBG lies in state is meaningful. A move forward for diversity, equity and inclusion in #Silicon Valley. https://www.cnbc.com/...
This blog post makes it sound like Google underwent this internal review of its own accord. No. They were exposed in the press and then sued. This is a settlement of a lawsuit. https://blog.google/...
it still provides for reporting of incidents to the board, not to truly independent outsiders. employees must be represented on the board, and there must be truly independent board members to exercise meaningful oversight. https://twitter.com/...
Flashback to the lawsuit accusing Alphabet's board of failing in its duties by approving big payments to execs accused of harassment and saying nothing about it. https://www.bloomberg.com/... https://twitter.com/...
Alphabet settles a shareholder lawsuit that accused the board of mishandling sexual misconduct by its execs — The settlement also eliminates mandatory arbitration and limits Google's use of non-disclosure agreements for employees involved in these cases https://www.cnbc.com/...
NEW: Alphabet has settled a shareholder lawsuit over alleged mishandling of sexual misconduct by execs. The company says it will eliminate mandatory arbitration and limit Google's use of non-disclosure agreements, among other policy changes. https://www.cnbc.com/...