Google to pay $118M to settle lawsuit alleging it underpaid women

Google has agreed to settle a class-action gender discrimination lawsuit that alleges the multinational tech giant systemically underpaid women in California.

As part of the settlement, Google is set to pay US$118 million to approximately 15,500 workers who say they were paid less than their male counterparts for similar work.

Google has also agreed to bring on an independent third party to oversee its hiring practices and a labour economist to review its annual pay equity studies. The press release announcing the settlement said the plaintiffs believe these measures will help address pay inequity in the company, and also combat unfair “leveling practices.”

When Ellis v. Google LLC was first filed in 2017, it represented only three women — and it alleged discrimination not just on the basis of pay but also “levelling, job channelling and promotions.”

Google has a tiered pay system where employees at higher levels receive higher salaries and bonuses.

Before it was amended, the lawsuit additionally claimed that new women hires were being funnelled into lower levels than men who had the same work experiences, leading to lower wages overall. It was narrowed to pay discrimination only.

The plaintiffs won class-action status in 2021. The case now represents women in 236 job titles who say they were underpaid in the four years leading up to the 2017 complaint being filed.

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That was the same year that Google was also sued by the U.S. Department of Labor over “systemic compensation disparities against women pretty much across the entire workforce,” according to the Financial Times. The lawsuit also claimed that Google discriminated against Asian job applicants.

Google also settled that case, and paid out more than $3.8 million to 5,500 employees and prospective hires.

Holly Pease, a central plaintiff in the lawsuit, spent over a decade working at Google in senior technical roles. She wrote that she was “optimistic that the actions Google has agreed to take as part of this settlement will ensure more equity for women.”

“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,” she added.

The plaintiffs’ co-counsel Kelly Dermody called the settlement “precedent-setting.”

The terms of the settlement still need to be approved by a judge and a preliminary hearing has been set for June 21.

Google has not admitted to wrongdoing in agreeing to this settlement.

“While we strongly believe in the equity of our policies and practices, after nearly five years of litigation, both sides agreed that resolution of the matter, without any admission or findings, was in the best interest of everyone, and we’re very pleased to reach this agreement,” it said in a statement.

The company added that “for the past nine years we have run a rigorous pay equity analysis to make sure salaries, bonuses and equity awards are fair.”