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Shareholder sues Alphabet board over handling of harassment

An Alphabet shareholder is suing the company's board of directors, claiming it helped cover up allegations o...

Posted: Jan. 11, 2019 11:10 AM
Updated: Jan. 11, 2019 11:10 AM

An Alphabet shareholder is suing the company's board of directors, claiming it helped cover up allegations of sexual misconduct by former Google executives.

The suit was filed by lawyers for shareholder James Martin on Thursday morning in California's San Mateo County Superior Court. The suit alleges that the board "knowingly facilitated sexual harassment" by executives, took part in covering it up by not disclosing the harassment claims and approving multi-million dollar severance packages for the accused.

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Francis Bottini, a lawyer for Martin, told CNN Business that the suit claims to have minutes from Alphabet (GOOG) board meetings shed light on how the company handled the investigations into Android creator Andrew Rubin and former head of Google search Amit Singhal. Those sections of the filing are redacted because of a confidentiality agreement that shareholders have with Alphabet.

Rubin and Singhai did not immediately respond to a request for comment. Rubin's lawyer previously denied the misconduct allegations to CNN Business, saying any relationship he had while at Google was consensual.

The New York Times first revealed details about harassment claims against multiple executives and their exit packages in October. The Information technology news website had previously reported that Google investigated whether Rubin had an inappropriate relationship while at the company.

Martin's lawsuit says that after the board investigated Rubin over sexual harassment claims, it was directly involved with approving his $90 million exit package when Rubin left the company in 2014.

Alphabet board members Larry Page, Sergey Brin, Eric Schmidt, Sundar Pichai and John Doerr are some of the defendants named in the lawsuit. Some people named in the suit are no longer on the board. Rubin and Singhal are also named as defendants.

"Obviously there are some very influential people on the board who we've sued," Bottini told CNN Business. "We think the focus really should be on them because they do bear a liability for this."

Alphabet did not immediately respond to a request for comment.

In the wake of the Times report, thousands of Google employees staged walkouts around the world to protest the company's handling of sexual harassment allegations, pay inequality, and its policy on private arbitration, among other issues.

The suit seeks recovery on behalf of Alphabet for other damages caused by how the harassment allegations were handled. For example, it claims the company suffered economic harm when employees quit in protest over the harassment claims. It asks that Rubin and Singhal to pay back the money they received when they left Alphabet.

Martin "believes that Rubin and Singhal should return the compensation they received. We feel that's unjust compensation in light of that they should have been fired for cause," said Bottini.

The suit is also asking for corporate governance changes. It says Alphabet should nominate at least three new members to its board of directors, and overhaul how sexual harassment is reported and handled at the company, among other changes.

Bottini says he anticipates similar cases being filed by more shareholders in the coming weeks. He says Martin is a longtime investor in Alphabet, since at least 2009, and that he has never worked for the company. He would not say how much stock Martin holds.

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