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Google's $118 Million Wake-Up Call: The High Cost of Pay Inequity

Aneta Samkoff
Aneta Samkoff
Google's $118 Million Wake-Up Call: The High Cost of Pay Inequity

As part of a settlement agreement, Google will pay $118 million for wage discrimination against more than 15,500 female employees. Class members involved in the settlement include those eligible for payments and who have specific rights and options in the settlement. Despite historical allegations and previous settlements, the issue of wage inequality at the company continues to spark controversy. Recent legal victories, such as the case of Ulku Rowe , highlight that the legal and reputational costs for companies ignoring pay equity issues are substantial.

  • Google has been accused and found guilty of wage discrimination against women and ethnic minorities three times. The tech giant has paid over $123 million in total compensation.
  • High-profile employee protests, widely covered by the media, combined with the importance of the issue of pay discrimination to consumers, have caused significant reputational damage, indirectly affecting the organization's financial performance.
  • Google's mistakes serve as a warning to companies that disregard pay equity regulations. A series of high-profile lawsuits have led to a dramatic increase in the number of companies conducting regular pay gap audits over the past few years.

In an era of heightened social awareness, the demand for pay equity has led to a series of groundbreaking laws across the states.

The typical legislation, like California’s SB 97 that mandates pay data reporting by race, ethnicity, and sex, sets companies up for unprecedented scrutiny over their compensation practices. At the epicenter of this reckoning stands Google, a tech behemoth grappling with the consequences of multiple pay discrimination lawsuits.

Google's Long History of Pay Discrimination Allegations and Class Action Lawsuit

The allegations of pay disparities at Google are not new. As early as 2017, the U.S. Department of Labor accused the company of systematic pay discrimination against women. A court filing detailed the settlement, revealing Google's agreement to expunge billions of personal records and make more prominent privacy disclosures about Chrome's Incognito option.

Google denied wrongdoing but ultimately agreed to pay $3.8 million to settle the claims, including $2.6 million in back pay to thousands of employees. The court papers filed in federal courts outlined the terms of the settlement and included statements from the plaintiffs' lawyers regarding the resolution. This would be just the beginning of Google’s legal battles over pay equity.

$118 mln Settlement Agreement

In 2021 the class-action lawsuit representing over 15,500 female employees alleged that Google engaged in gender-based pay discrimination. After months of legal wrangling, Google agreed to a staggering $118 million settlement in June 2022. The settlement terms require final approval by a U.S. District Judge, with Google supporting the final approval of the settlement but disagreeing with the plaintiffs' legal and factual characterizations.

As part of the agreement, the tech giant committed to bringing in third-party experts to analyze its pay practices and make recommendations for improvement. While admitting no wrongdoing, the settlement resolves the claims related to injunctive relief but does not resolve the plaintiffs' damages claims, allowing individual users to retain the right to sue for monetary damages.

Ulku Rowe's Fight Against Pay Inequity and Retaliation in Federal Court

That was the end for Google though. The ink has barely dried on the second settlement, the company found itself embroiled in yet third legal battle.

In October 2023, Ulku Rowe, a female executive in Google Cloud, took the company to trial over allegations that she was hired at a lower level and pay than less experienced male colleagues. Rowe further claimed Google denied her promotions and demoted her in retaliation for her complaints. This trial comes as a U.S. judge is set to hear closing arguments in a landmark federal antitrust trial against Google in May.

I was able to bring this lawsuit because of the steps that many, many people took before me.


Ulku Rowe, former executive at Google

A Manhattan jury ultimately found Google guilty of gender discrimination and retaliation against Rowe, awarding her $1.1 million in damages. Though the jury did not find Google violated New York’s pay equity laws, the verdict was still a significant win, validating Rowe’s experiences. Her case marked the first time a pay discrimination suit reached trial against Google since the company ended forced arbitration in response to the historic 2018 employee walkouts.

The Ripple Effects on Dominant Technology Companies: Tarnished Reputation and Employee Discontent

Google’s repeated entanglements with pay discrimination lawsuits have taken a toll on its once-sterling reputation. Media coverage has been extensive and often unflattering, with headlines like Google’s $118 Million Pay Discrimination Settlement: A Wake-Up Call for Tech. This settlement is seen as a historic step in holding dominant technology companies accountable and requiring more honesty in their representation to users.

Customers and employees alike have expressed disappointment and frustration with Google’s handling of these issues. Internally, reports of employee protests, walkouts, and increased attrition have surfaced as disillusioned workers seek more equitable pastures.

The 2018 walkouts, in particular, marked a turning point in employee activism at Google and across the tech industry. Organizers’ demands for an end to forced arbitration paved the way for cases like Rowe’s to see their day in court.

The Path Forward: Transparency, Accountability, and Proactive Reform

Google’s missteps have sparked a broader conversation about pay equity in the tech industry. The federal court overseeing the legal claims has highlighted the importance of transparency and accountability. Other companies are taking notice, conducting internal audits, and implementing more transparent compensation practices. By learning from Google’s mistakes, these organizations can position themselves as leaders in the fight for workplace equity.

As we move forward, it is crucial that companies prioritize pay equity and transparency. The costs of inaction - legal, financial, and reputational - are simply too high. And Google's bad example serves as a warning sign that has been taken seriously by many companies. According to Gartner already in 2022 more than 84% of major organizations did a pay equity audit. We can only expect that others will follow suit, especially given the legal jurisdiction of the Northern District of California.

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