Pinterest Faces Racial Discrimination Lawsuit

Pinterest is facing a shareholder derivative lawsuit alleging executives ignored a culture of sex-based bias and racial discrimination at the company.

The Employees’ Retirement System of Rhode Island (ERSRI) filed the lawsuit derivatively on behalf of Pinterest Inc. on Monday in federal court. ERSRI manages $8.5 billion in assets for about 60,000 current and retired Rhode Island state employees, Business Insider reported.

“Pinterest’s top executives and members of its Board of Directors (‘Board’) personally engaged in, facilitated or knowingly ignored the discrimination and retaliation against those who spoke up and challenged the Company’s [w]hite, male leadership clique,” the lawsuit says. 

These executives’ actions have damaged Pinterest’s “financial position and its goodwill and reputation among its largely female user base,” which continues to suffer harm.

According to Fast Company, the targets of the lawsuit include Pinterest cofounders Ben Silbermann and Evan Sharp, who allegedly ignored sex-based bias, racial discrimination and retaliation against former chief operating officer Francoise Brougher and Ifeoma Ozoma and Aerica Shimizu Banks, female executives at the company.

Banks and Ozoma, who are both Black, were responsible for certain policies at Pinterest, such as the prohibition of misinformation about health on the platform and the end of promoting former slave plantations as wedding venues, the lawsuit says.

However, the lawsuit states “internally, Pinterest discriminated against these highly accomplished Black women and then retaliated against them for seeking equitable leveling and pay.”

After Pinterest allegedly ignored the women’s “warnings of an imminent doxxing attack” and subjected them and their colleagues to “invasive investigations designed to frame and punish Ozoma and Banks,” the two women left the company May 22, 2020.

On Aug. 11, 2020, two months after the women shared their experiences publicly, Brougher — the company’s top female executive and first COO — filed a lawsuit against Pinterest, alleging both gender discrimination and retaliation.

In her lawsuit, Brougher said she was underpaid compared to “similarly situated male executives” and was intentionally excluded from certain job responsibilities.

Pinterest employees staged a “virtual walkout” on Aug. 14 as a show of solidarity with the women.

“The Individual Defendants … breached their fiduciary duties to the Company by perpetrating or knowingly ignoring the long-standing and systemic culture of discrimination and retaliation at Pinterest,” the lawsuit contends, even when they were presented with evidence of sex-based and racial discrimination.

“Most egregiously,” the lawsuit says, Silbermann “perpetuated and approved of” the sex-based and racial discrimination at Pinterest, “wholly abdicating his fiduciary duties.” He allegedly installed “yes-men” and marginalized women, most notably Brougher, who was excluded from raising money in advance of Pinterest’s initial public offering (IPO). Following the IPO, she was reportedly excluded from board meetings.

“Pinterest’s leadership and Board take their fiduciary duties seriously and are committed to continuing our efforts to help ensure that Pinterest is a place where all of our employees feel included and supported,” a Pinterest spokesperson told Fast Company. “We believe the actions we’ve initiated as well as the ongoing independent review regarding our culture, policies, and practices will help us achieve our goal of building a diverse, equitable and inclusive environment for everyone.”

In addition to demanding a jury trial, ERSRI is seeking broad monetary and non-monetary relief.

The plaintiff is asking for several orders from the Court, including that certain individual defendants “committed corporate waste,” abused control and became unjustly enriched. In addition, they seek an order directing the company to take whatever action is necessary to “end the systemic pattern of race- and gender-based discrimination.”

ERSRI also is seeking an award for “all damages sustained by Pinterest as a result of Individual Defendants’ breaches of fiduciary duties and violations of law;” an award of costs and fees, including attorneys’ and experts’ fees; other damages; and any further relief the Court deems appropriate.

“Absent the relief sought herein,” the Pinterest derivative lawsuit states, “this harm will go unaddressed and the damage to the Company will continue.”

Do you use Pinterest? What do you think of the accusations against the company’s board members? Tell us in the comments below.

The plaintiff is represented by Louise H. Renne, Ruth M. Bond, and Anastasia Bondarchuk of Renne Public Law Group and Julie Goldsmith Reiser, Molly Bowen, Lyzette Wallace, and Laura Posner of Cohen Milstein Sellers & Toll PLLC.

The Pinterest Racial Discrimination Derivative Lawsuit is The Employees’ Retirement System of Rhode Island, et al. v. Benjamin Silbermann, et al., Case No. 3:20-cv-08438, in the U.S. District Court for the Northern District of California, San Francisco Division.

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