Pinterest announced on Thursday that it has entered into a $50 million bond agreement with the NASDAQ OMX Group Inc. as part of its lawsuits concerning discrimination. The $50 million bond corresponds to $500,000 in shares, which is equivalent to the amount to be paid to plaintiffs after they receive their payment under the settlement, according to regulatory filings.
The California-based visual bookmarking site was sued for discrimination by two former employees in 2016, who accused the site of discriminating against women and minorities and allowing sexist culture to thrive. Both accusers said the company knew of this discriminatory culture, but allowed it to persist.
Nadya Alger, one of the accusers, worked as a UX designer at Pinterest from 2013 until November 2016, when she was fired. Her lawsuit alleged that after joining Pinterest, she was the only woman in a room of 16 developers. Her lawsuit also alleged that a number of Pintered engineers shared personal information about Alger on inappropriate websites, resulting in an unwelcome work environment.
In July 2016, a former male engineer, Daniel Tillinghast, filed a similar lawsuit. His allegations were more serious than Alger’s, because he accused the site of being sexist in its hiring practices and fostering a hostile work environment. While the allegations against Tillinghast stemmed from a short period of time, Alger’s lawsuit contained allegations of years of widespread discrimination at Pinterest.
Alger said she was fired from Pinterest when she told her managers that the sexist culture at the company was a problem. After her termination, she, along with two other female former employees, allegedly came under surveillance by Pinterest’s HR department.
“These were actual civil rights lawsuits,” said Colleen Cullinane, an attorney representing the plaintiffs. “The girls brought them because they felt that they couldn’t, in good conscience, work for a company like Pinterest.”
The suit alleged that because Pinterest did not follow its own guidelines for maintaining a diverse workplace, the company discriminated against Alger and others by failing to ensure that there were no employees who misused Snapchat, used Twitter profiles to engage in “discriminatory behavior” and posting Twitter profiles with a “less than professional” tone.
After five years in business, Pinterest announced earlier this year that it had reached gender parity in its workforce.
Following the settlement, Pinterest has pledged to implement a range of reforms that will address the problem of discrimination within the company, according to human resources head Simon Knowles. The San Francisco-based company will now let new hires participate in all of its training on diversity, so that managers and other managers will be able to see if employees are using social media at work.
Additionally, there will be an implicit-bias training program for Pinterest employees and managers, and a number of measures that will increase diversity at the company.
In addition to Pinterest, several other tech companies have been accused of using discriminatory hiring practices, but unlike Pinterest, these tech companies have denied the allegations and have denied any discrimination. Dropbox was ordered to pay $6.1 million in February 2017, after an employee brought a lawsuit against the company alleging widespread discrimination. Dropbox and two of its former employees dismissed the allegations, saying that the company’s broader culture contributed to the discrimination.
Despite the settlements, it remains to be seen whether Pinterest’s internal reforms will result in a change in the company’s male-dominated culture. While consumer-focused tech companies may have the financial muscle to fight litigation, they might not be able to defend themselves against the dozens of other companies that are making accusations of discrimination.
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“It’s always a balance of resources and legal costs,” said Cullinane. “Part of what we are doing with the settlement is getting the word out to other companies so they do not have a product liability as well as a standing to do this type of thing.”
Other lawsuit survivors including Uber and Breitbart have continued to operate, though they have both settled discrimination lawsuits.
“I feel like litigation is a necessary part of the work as an engineer,” said Paul Martin, a spokesperson for Quebec-based company Opa Anticor. “I also think it provides a much-needed voice for the voiceless and for the badly spoken.”