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Dec 1, 2023, 2:32pm EST
tech

Google reaches $27 million settlement in case that sparked employee activism in tech

Reuters/Stephen Lam
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The Scoop

Google has reached a $27 million settlement with employees who accused the tech giant of unfair labor practices, setting a record for the largest agreement of its kind, according to California state court documents that haven’t been previously reported.

The 2016 lawsuit was among the first glimpses of employee activism that swept through the tech industry over the past seven years. It stemmed from the termination of a worker at Google-owned Nest, who was fired for posting complaints about the company’s management on Facebook.

In the years that followed, Google, Facebook, Netflix and others faced employee walkouts, whistleblowers, and public letters, which led to firings, town halls, and revamped policies as tech companies grappled with how to contend with increasingly vocal staff.

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The Google case was filed under California’s Private Attorneys General Act, which permits individuals to sue on behalf of the government for alleged labor code violations. Most of the settlement, which is still subject to court approval, will go to the state, with around 100,000 Google employees getting around $20 to $70 each, depending on how long they’ve worked at the company. (The purpose of PAGA is to punish the companies, rather than compensate employees.)

In terminating the employee, Google said the person had violated the company’s data classification guidelines that prohibited staff from divulging confidential information.

In the complaint to the NLRB and in the lawsuit, the employee alleged that the company’s data classification guidelines were too broad. California labor law requires corporate confidentiality policies to allow employees to speak about labor conditions. Google later revised the guidelines in 2017.

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The settlement comes after a protracted legal fight led by lawyers from Baker Curtis & Schwartz and Outten & Golden.

Along the way, the case raised issues about employee surveillance and the over-use of attorney-client privilege to avoid legal scrutiny and accountability.

“While we strongly believe in the legitimacy of our policies, after nearly eight years of litigation, Google decided that resolution of the matter, without any admission of wrongdoing, is in the best interest of everyone,” a company spokesperson said.

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Reed’s view

The settlement is a reminder of how the world changed, and then changed again, over the last seven years.

When the complaint was first filed with the NLRB, I had been covering Nest closely and broke the news about the case. This was mind-blowing to me at the time, because not talking to reporters had been like a religion at tech companies. Yet this employee who had a coveted job at a major firm was arguing it was his right to speak to journalists.

The case marked a profound change in Silicon Valley culture. As certain tech firms grew into giants, their labor forces were changing. These weren’t startup employees willing to do anything for their employer. Many of them were just regular, white-collar workers and they expected to be treated that way.

Some in corporate America had already learned these lessons after waves of embarrassing HR debacles over the years. Tech companies, on the other hand, went from dorm-room startups to multinational behemoths seemingly overnight, but their work cultures moved slower than the pace of hiring.

This little-noticed NLRB case helped spark a major turning point in the industry. Other employees started to feel more emboldened and were beginning to speak up about work conditions. This coincided with another major turning point: The election of Donald Trump, which happened later that fall.

In early 2017, the atmosphere was ripe for Uber’s Susan Fowler, who happened to represented by the same attorney in the Googel case, to spark a massive conversation about sexual harassment after her allegations of misconduct created an uproar there.

That summer, I published a story in The Information about seven female founders accusing a venture capitalist of sexually harassing them during conversations about funding. Three went on the record.

That story led to a flood of similar allegations of sexual harassment by other men in tech. That fall, I wrote about Google secretly firing Android founder Andy Rubin for alleged sexual misconduct and its chief legal officer having an affair and a child with one of his direct reports. Those stories led to walkouts at Google, which sparked a broader labor movement in tech.

This all reached a crescendo in the leadup to the 2020 presidential election. Employees were actively criticizing their companies on social media, leaking memos and recordings of all-hands meetings that rarely got out before. They were pressuring their companies to take a stand on seemingly every hot button political issue.

But after the election, the pendulum started swinging back the other way. The economic downturn took away some of the leverage employees had.

Part of this is a backlash to what many feel is a sense of entitlement that younger tech workers seem to have. Some employers have simply banned discussion of political issues in the office.

The tech industry is trying to find its equilibrium now and seems to be settling down. That’s a welcome change for many people, no matter which side of the political spectrum they’re on. (The upcoming election will be a test of this equilibrium.)

The lawsuit that marked the beginning of this, despite settling for a record number, is more of a moral victory. But for those paying close attention, it was still consequential and pioneering.

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Room for Disagreement

Google has, over the years, adjusted to the changes in employee culture. The worker who filed this initial labor complaint was actually reinstated and went on to have a good career there.

While a period of turmoil ensued, the company has learned to bend on these issues, giving more leeway to employees on labor issues while still aggressively protecting its intellectual property.

“We are pleased to have reached this agreement as our policies simply do not, and have never, unlawfully limited our employees’ ability to talk about their terms and conditions or report violations of law,” the Google spokesperson said.

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Notable

  • Google went through massive changes in a few years, as is chronicled in this deep dive from Reuters.
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