Pinterest to undergo corporate diversity reform to settle suit led by RI General Treasurer
Social media platform Pinterest agreed to a series of diversity, equity and inclusion workplace reforms to settle a lawsuit by shareholders lead by the Rhode Island pension system, General Treasurer Seth Magaziner announced.
The reforms are valued at $50 million and resolve shareholder complaints that Pinterest's Board of Directors failed to respond to allegations of discrimination against women and people of color working at the company.
Magaziner, who is running for governor, called the settlement the "first of its kind to embrace diversity goals around a company’s product."
"The proposed settlement calls for sustained efforts by Pinterest that will put diversity, equity, and inclusion (“DEI”) at the forefront of its internal goals and business operations," the proposed settlement filed in federal court Wednesday said. "Additionally, it will resolve this highly contested, complex derivative action while delivering long-term meaningful benefits to Pinterest and its stockholders."
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The terms of the settlement include having Pinterest do regular pay equity assessments, making the platform user experience more inclusive, creating "executive accountability for DEI culture" and releasing former employees who made race or gender discrimination claims from non-disclosure agreements.
Pinterest is a San Francisco-based image-sharing social platform known for digital pinboards.
It's discriminatory practices came under scrutiny after two Black female members of the company's public policy team publicly criticized the treatment of employees.
The Rhode Island pension fund, whose board Magaziner chairs, was the lead plaintiff in the suit and contributed "significant involvement" and "oversight," the settlement said.
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The theory behind the lawsuit is that the settlement terms will ultimately make the company more profitable and raise its stock price, justifying the time and energy state attorneys put into the case.
"We pushed for these sweeping reforms to support Pinterest's employees with a fair and safe workplace, and to strengthen the company's brand and performance by ensuring that the values of inclusiveness are made central to Pinterest's identity," Magaziner said in the news release.
The lawsuit was filed in U.S. District Court in California and involved mediation by a former judge acting as special master.
It came about a year after Pinterest paid $22 million to settle a gender discrimination by its former COO.
The $50 million commitment will reduce "the likelihood that [Pinterest] will face lawsuits, attendant financial or reputational harm regarding such misconduct," the settlement documents said.
panderson@providencejournal.com
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On Twitter: @PatrickAnderso_
This article originally appeared on The Providence Journal: Pinterest to undergo diversity reforms to settle Magaziner led suit
