Snap Inc. Agrees To $15 Million Discrimination Settlement With CA Civil Rights Department

Santa Monica-based Snap Inc., the parent company of the social media platform Snapchat, agreed to pay a $15 million settlement with the California Civil Rights Department on Wednesday over allegations of discrimination against female employees, failure to prevent workplace harassment, and retaliations against female employees.

According to the California Civil Rights Department (CRD), despite massive growth since being founded in 2011 “Snap Inc. failed to put into place measures to ensure that women were paid or promoted equally. Instead, women encountered a glass ceiling and were told to wait their turn, were actively discouraged from applying for promotions, or lost promotion opportunities to less qualified male colleagues. CRD also alleged that women suffered unwelcome sexual advances and other harassing conduct. When women spoke up, they allegedly faced retaliation, including in the form of the denial of professional opportunities, negative performance reviews, and termination.”

These allegations kicked off a three year investigation in 2021, as well as a follow-up suit against the company on behalf of affected workers.

Snap refuted the state’s allegations throughout the investigation and suit. The company gave evidence that the company was fair and inclusive. They also noted that they had zero ongoing complaints over pay equity, discrimination, harassment, or retaliation issues. However, as litigation would cost more than a settlement and could take months or possibly years, Snap decided to settle with the CRD for $15 million on Wednesday.

A $15 million settlement

According to the terms of the agreement, Snap is to do the following:

• Continue its commitment to promoting and strengthening inclusivity in its hiring and retention policies.
• Pay $15 million to cover direct relief to workers and litigation costs. Of the total, approximately $14.5 million is dedicated to compensating workers.
• Retain an independent consultant to evaluate and make recommendations regarding Snap Inc.’s compensation and promotion policies and training materials.
• Ensure that future contracts with staffing agencies require compliance with state protections against workplace discrimination and harassment.
• Recognize its obligation to not discriminate against or harass employees based on sex, as well as comply with all federal and state antidiscrimination laws.
• Contract with a third-party monitor to audit Snap Inc.’s sexual harassment, retaliation, and discrimination compliance and make appropriate recommendations.
• Ensure staff complete training on the prevention of discrimination, retaliation, and sexual harassment in the workplace.
• Provide information to all employees regarding their right to complain of any harassment or discrimination without fear of retaliation.

“In California, we’re proud of the work of our state’s innovators who are a driving force of our nation’s economy,” said CRD Director Kevin Kish in a statement on Wednesday. “This settlement with Snapchat demonstrates a shared commitment to a California where all workers have a fair chance at the American Dream. Women are entitled to equality in every job, in every workplace, and in every industry.”

Snapchat responded in their own statement shortly afterwards. While they maintained that the CRD’s claims were wrong, they nonetheless settled out of court to avoid higher costs and a long litigation period.

“We care deeply about our commitment to maintain a fair and inclusive environment at Snap, and do not believe we have any ongoing systemic pay equity, discrimination, harassment, or retaliation issues against women,” retorted Snap.

While the case is now virtually settled, many warned that the state now had a new settlement precedent to use on future similar cases.

“CRD won by basically saying that a settlement was a quicker and cheaper option,” said legal analyst Kim Stephens to the Globe on Wednesday. “There were many women coming forward with allegations, but at the same time, Snap had proof otherwise. Honestly, the truth was probably somewhere in the middle. But the CRD was willing to drag it out it seems.

“It’s the classic legal playbook. Drag it out so the other side needs to keep paying legal fees for longer. Snap just didn’t want to play that game. Plus, with a settlement, they aren’t saying they are guilty. This was really the best option for the company. The state tied their hands.”

The court is expected to approve the settlement soon.