Topline
A shareholder has accused Pinterest executives of violating their fiduciary duty by engaging in or ignoring racial and gender discrimination, making it yet another lawsuit this year related to Pinterest’s workplace culture as the firm’s reputation as a “nice” tech company continues to falter.
Chairman, Co-Founder and CEO of Pinterest, Ben Silbermann, speaks in front of the companies logo at ... [+]
Key Facts
The lawsuit alleges Pinterest co-founders Ben Silbermann and Evan Sharp, CFO Todd Morgenfeld, as well as the company’s board “personally engaged in, facilitated or knowingly ignored the discrimination and retaliation against those who spoke up and challenged the Company’s White, male leadership clique.”
The suit was filed by the Employees’ Retirement System of Rhode Island, which has owned Pinterest shares since June, according to Fast Company, and focuses on discrimination claims that have already been made public this year.
The lawsuit calls out CEO Silbermann in particular for intentionally excluding former COO Françoise Brougher from critical activities and board meetings and for failing to address discrimination and retaliation against two Black former employees, Ifeoma Ozoma and Aerica Shimizu Banks.
The complaint accuses members of Pinterest’s board of abdicating their fiduciary duties by “approving compensation to Brougher that underpaid her relative to similarly situated male colleagues” and alleges Morgenfield gave her biased performance reviews based on her gender.
In a statement, a Pinterest spokesperson said “Pinterest’s leadership and Board take their fiduciary duties seriously” and pointed to recent actions the company has taken in response to discrimiantion claims, such as retaining a law firm to conduct a review of its culture, hiring a Global Head of Inclusion and Diversity and adding two Black board members.
Crucial Quote
“I’m glad that [the plaintiff’s lawyers] Cohen Milstein is pursuing this on behalf of the clients but even if it’s successful there still needs to be justice for me and Aerica and the other people who have been harmed by the behavior of Pinterest managers and executives who are still on the job,” Ozoma told Fast Company.
Key Background
Pinterest has cultivated a reputation in Silicon Valley and the media for being a “nice” tech company and has avoided scrutiny like other major social media networks. But as Black Lives Matter protests were sweeping the country over the summer, Ozoma and Banks accused the company of racial bias on Twitter. Two months later, Brougher sued the company for gender discrimination and retaliation, with employees staging a virtual walkout to solidarity with the three women soon after. The Washington Post and Business Insider have since published stories detailing the company’s allegedly toxic environment and discriminatory practices.
Tangent
It’s not unheard of for shareholders to use lawsuits as a way to hold executives accountable. Alphabet, for example, settled a series of shareholder lawsuits in September over the company’s approval of a $90 million exit package for former executive Andy Rubin, despite an investigation finding that a sexual harassment claim made against him was credible.
