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Google has reached a $27 million settlement with its California employees who accused the tech giant of unfair labor practices, setting a record for the largest agreement of its kind, according to California state court documents. The settlement covers individuals who worked at Google and Alphabet from Oct. 16, 2015, to Sept. 15, 2023, excluding temporary employees, vendors, or contractors and those of senior vice president positions or higher.

In the December 4 settlement approval order, the trial court granted attorneys’ fees of $9 million to plaintiffs’ counsel Outten & Golden LLP and Baker Curtiz & Schwartz PC. Named plaintiffs John Doe and DeWayne Cassel each will receive $20,000 in incentive awards with $10,000 each to Paola Correa and David Gudeman.

The net $17.66 million settlement will be split with 75% going to the California Labor and Workforce Development Agency and 25% to the class. Each of the 96,939 aggrieved employees receives a fixed payment of $20 and a max payment of $79 depending on pay periods, the plaintiffs said in a supplemental filing. The settlement is effective Feb. 3.

Plaintiffs in this case alleged that Google, Inc. and Alphabet, Inc., and Adecco USA, Inc. require their employees to comply with various confidentiality policies. John Doe, David Gudeman, and Paola Correa, who were current and former Google and Adecco employees, sued Google and Adecco under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.), alleging the employers’ confidentiality policies restricted their employees’ speech in violation of California law.

The trial court sustained defendants’ demurrers without leave to amend, concluding plaintiffs’ claims were preempted by the National Labor Relations Act (NLRA or Act) (29 U.S.C. § 151 et seq.) under San Diego Bldg. Trades Council v. Garmon (1959) 359 U.S. 236, 244-245 (Garmon). In September 2020, the California Court of Appeal reversed the trial court in the published case of Doe v. Google, Inc., 54 Cal. App. 5th 948.  It held that the claims fall within the local interest exception to Garmon preemption and may therefore go forward.

Plaintiffs’ third amended complaint alleged 17 causes of action under PAGA based on defendants’ confidentiality policies. Plaintiffs’ confidentiality claims fall into three subcategories; restraints of competition, whistleblowing, and freedom of speech.

In their competition causes of action plaintiffs alleged that Google’s confidentiality rules violated state statutes by preventing employees from using or disclosing the skills, knowledge, and experience they obtained at Google for purposes of competing with Google. For example, the policies prevented Googlers from disclosing their wages in negotiating a new job with a prospective employer, and from disclosing who else works at Google and under what circumstances such that they might be receptive to an offer from a rival employer.

Plaintiffs’ whistleblowing causes of action alleged that Google’s confidentiality rules prevent employees from disclosing violations of state and federal law, either within Google to their managers or outside Google to private attorneys or government officials. (See Bus. & Prof. Code, §§ 17200 et seq.; Lab. Code, § 1102.5.) They also allege the policies unlawfully prevent employees from disclosing information about unsafe or discriminatory working conditions, or about wage and hour violations.

In their freedom of speech claims, plaintiffs alleged that defendants’ confidentiality rules prevent employees from engaging in lawful conduct during non-work hours and violate state statutes entitling employees to disclose wages, working conditions, and illegal conduct.

The 2016 lawsuit was among the first glimpses of employee activism that swept through the tech industry over the past seven years. It stemmed from the termination of a worker at Google-owned Nest, who was fired for posting complaints about the company’s management on Facebook.

In the years that followed, Google, Facebook, Netflix and others faced employee walkouts, whistleblowers, and public letters, which led to firings, town halls, and revamped policies as tech companies grappled with how to contend with increasingly vocal staff.

The California Labor and Workforce Development Agency submitted comments regarding the proposed settlement agreement in this action in response to the Court’s invitation. The Agency told the court the $27 million settlement in this action “is the largest PAGA-only settlement, and second largest civil penalty recovery, in a PAGA action to date.”

And the agency went on to say “to our knowledge this is the first PAGA case which has obtained remedies of this nature, which clearly further labor law enforcement. And undoubtedly, as Plaintiffs state, ‘knowledge of this $27,000,000 PAGA settlement against Google should serve to deter Alleged Speech Restrictions by other employers.’ “