Alphabet board faces lawsuit over sexual misconduct cover-up
The board of Alphabet Inc, the parent company of Google, is the subject of two lawsuits filed earlier this week, with the world's third most valuable company accused of covering up sexual misconduct claims against two former executives.
Both of the lawsuits seek to force Google to change its governance and oversight to stop future workplace conduct issues. They also call for Alphabet directors to pay damages to Alphabet for allegedly breaching their fiduciary duties and engaging in corporate waste.
The allegations stem primarily from large severance payments to Andy Rubin, who led Google's Android mobile operating division until 2014, and Amit Singhal, head of Google's search unit until 2016. Company investigations into both men had found accusations of sexual harassment against them to be credible, according to the lawsuits.
Rubin and Singhal have denied the allegations. Google Chief Executive Sundar Pichai apologized last year to employees for the companies' past handling of sexual misconduct cases and vowed to improve practices.
One of the two lawsuits in San Mateo County Superior Court in California cites minutes from Alphabet board and board committee meetings where the executives' situations were discussed.
Plaintiff James Martin obtained the documents through a “shareholder inspection demand,” according to the lawsuit.
Martin's attorney, Frank Bottini, said his team plans to show that Google suffered hundreds of millions of dollars in damages including payouts made to executives accused of sexual misconduct, lost productivity from employees around the world walking off the job briefly in November to protest the payouts and hits to its brand reputation.
The employee demonstrations followed a New York Times report in October that said Google in 2014 gave a 90 million-U.S. dollar exit package to Rubin, after he allegedly forced a female colleague into performing a sex act on him in a hotel room in 2013.
Ellen Winick Stross, an attorney for Rubin, said on Thursday that Martin's lawsuit, “like much of the recent media coverage, mischaracterizes Andy's departure from Google and sensationalizes claims made about Andy by his ex-wife. Andy left Google voluntarily. Andy denies any misconduct, and we look forward to telling his story in court.”
Employee organizers said they welcomed the lawsuits as they continue to push for further changes, including an employee representative on Alphabet's board.
The lawsuit calls for Alphabet to add at least three independent directors to its board and move to a “one share, one vote” stock structure to increase shareholder oversight of management decisions. Alphabet executives currently hold voting control through shares with 10 votes each.
“We'd like to see ... meaningful change in the tone at the company, the policies, the treatment of women, the reporting of sexual harassment and other issues,” Bottini said.