Alphabet's Google Settles Lawsuit Over Preferential Treatment Of White, Asian Employees, To Pay $28 Million

Google, a subsidiary of Alphabet Inc. GOOGL GOOG, has reached an agreement to settle a class-action lawsuit for $28 million. The lawsuit expressed suspicion that the tech giant gave preferential treatment to white and Asian employees over others.

What Happened: The lawsuit, led by Ana Cantu, claimed that Google paid white and Asian employees more and placed them on higher career paths than other employees.

Judge Charles Adams of the Santa Clara County Superior Court in California gave preliminary approval to the settlement last week, deeming it fair and reasonable, as reported by Reuters.

Cantu stated that Google’s actions breached the California Equal Pay Act. She departed from the company in September 2021. After deducting $7 million for legal fees, the net settlement proceeds amount to $20.4 million.

Google spokesperson Courtenay Mencini confirmed the settlement but maintained that the company disagrees with the allegations. “We continue to disagree with the allegations that we treated anyone differently and remain committed to paying, hiring and leveling all employees fairly," Mencini stated.

The settlement applies to at least 6,632 individuals employed by Google in California from February 15, 2018, to December 31, 2024.

A hearing to review and approve the final settlement has been set for September 11.

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Why It Matters: This settlement follows a series of legal challenges faced by Google. In February, Chegg Inc. CHGG sued Google, alleging that its AI-generated search overviews were unfairly using publishers’ content, reducing site traffic, and threatening the future of online publishing.

This development also comes on the heels of Google’s parent company Alphabet making its largest acquisition yet, purchasing cloud security firm Wiz for $32 billion. This acquisition, aimed at boosting Google Cloud’s security, signifies Alphabet’s commitment to expanding its cloud services amid increasing competition.

The recent settlement, therefore, adds to the growing list of legal and strategic challenges that Google and Alphabet are navigating as they continue to expand and innovate in the tech industry.

On Tuesday, the shares of Alphabet Inc. dropped 2.34% to close at $162.67.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.