Google to pay $118 million to thousands of women in gender-bias settlement

Google has agreed to pay $118 million to up to 15,500 women to settle a years-long class-action lawsuit alleging the Mountain View company discriminated against female employees.

Plaintiffs Kelly Ellis, Holly Pease, Kelli Wisuri, and Heidi Lamar had accused the digital-advertising giant, valued at $1.4 trillion, of slotting women into lower salary levels than men, giving women lower-paying jobs, promoting women more slowly and less frequently, and generally paying female employees less than men for similar work.

“As a woman who’s spent her entire career in the tech industry, I’m optimistic that the actions Google has agreed to take as part of this settlement will ensure more equity for women,” Pease, who worked for the company in leadership roles for almost 11 years, said in a statement. “Google, since its founding, has led the tech industry. They also have an opportunity to lead the charge to ensure inclusion and equity for women in tech.”

The lawsuit falls within a constellation of legal actions alleging bias against women in Silicon Valley’s technology industry.

Google in 2020 promised to spend $310 million on diversity, equity and inclusion programs after shareholders sued the company over an alleged pattern of sexual harassment and misconduct against women. Software titan Oracle, which recently moved its headquarters to Austin from Redwood City, is fighting a lawsuit filed in 2017 claiming it paid women less than men in several job categories. Sunnyvale business-networking platform LinkedIn in May agreed to pay $1.8 million in back wages after a federal investigation concluded that it underpaid 686 female workers in engineering, product and marketing jobs. In November, San Francisco image-sharing platform Pinterest agreed to spend $50 million to promote diversity and change its company culture after shareholders claimed in a lawsuit it discriminated against women and people of color.

The Google agreement covers a relatively broad range of jobs — from engineers to salespeople to teachers in the company preschool — and represents a large sum for a gender-bias settlement. But “that’s a tiny, tiny, tiny amount of money for Google,” said UC Berkeley sociology professor Heather Haveman, who studies the tech industry, noting the huge size of Google’s annual revenues — $258 billion last year. Also, Haveman said, the payment was not ordered by a judge, so it does not create a legal precedent.

Still, Haveman said, smaller companies tend to follow the lead of successful big businesses, and Google’s decision to settle could be emulated by firms facing similar legal claims.

The suit, in San Francisco County Superior Court, was filed in 2017. Under the settlement agreement, which still needs court approval after it was announced Friday, an independent industrial-organizational psychologist will probe Google’s practices for assigning job levels at hiring, and a third-party labor economist will review the firm’s internal pay-equity studies “and make recommendations on that process to the extent there are opportunities to more accurately analyze whether employees are paid equitably for comparable work, including with respect to gender equity.”

Google said it was “absolutely committed” to treating employees equally in hiring, pay, and job-category assignments. “For the past nine years we have run a rigorous pay-equity analysis to make sure salaries, bonuses and equity awards are fair,” Google said. “If we find any differences in proposed pay, including between men and women, we make upward adjustments to remove them before new compensation goes into effect. In 2020 alone, we made upward adjustments for 2,352 employees, across nearly every demographic category, totaling $4.4 million.”

Once the settlement is approved, up to 15,500 current and former female employees in 236 job positions since September 2013 are to receive a share of the funds based on a formula that includes duration at Google, job family and job level, performance rating, education and experience. The four named plaintiffs are to receive “service awards” — up to $75,000 for Ellis for initiating the legal action, and up to $50,000 for Pease, Wisuri and Lamar.

The plaintiffs’ success against Google stands in contrast to a setback last week for women suing over claimed pay disparities at Oracle. A San Mateo County Superior Court judge on Friday issued a tentative ruling to strip class-action status from the lawsuit because the 3,000 employees in 125 job categories would make the case unmanageable. Jim Finberg, a lawyer representing the plaintiffs in that case and in the just-settled Google suit, noted that Judge V. Raymond Swope had approved class-action certification in the Oracle case in 2020, and in October rejected Oracle’s motion to remove that status. Finberg said Monday morning he believes Swope’s tentative ruling was inconsistent with his previous decisions on class-action status in the case. Finberg was set to argue at a hearing Monday afternoon that the order should not be finalized.

Oracle, in a court filing late last month, sought to have the case thrown out, in part because the plaintiffs’ analyses purportedly did not identify any individual women paid less than a man in her job code, and the firm allegedly “had no class-wide policy or practice of relying on prior pay to determine starting pay.”