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A California federal judge awarded $2.5 million in additional legal fees on Thursday to attorneys monitoring Pinterest's adherence to a settlement agreement that resolved investor claims of race and sex discrimination within the company. U.S. District Judge William Alsup expressed satisfaction with both Pinterest and the investors' legal teams for their efforts to ensure compliance since the settlement was reached.

Pinterest pays $2.5M in legal fees : Monitoring Compliance with Reforms

The fee request, made by the investors' attorneys from Renne Public Law Group and Cohen Milstein Sellers & Toll PLLC, went unchallenged by Pinterest. This latest award comes on top of the $2.5 million in fees Judge Alsup approved in 2022, when he initially signed off on the settlement.

Under the terms of the agreement, Pinterest committed to investing $50 million in corporate reforms over a ten-year period to foster a more inclusive workplace. The settlement followed a shareholder derivative lawsuit filed in November 2020, alleging that Pinterest maintained a "systematic culture, policy and practice of illegal discrimination on the basis of race and sex" since at least 2018.

Pinterest pays $2.5M in legal fees : Positive Progress Noted

During the past two years, the investors' legal team has worked with Pinterest to monitor compliance, submitting biannual reports to the court. In his order, Judge Alsup highlighted the recent reports, which indicated that Pinterest leadership has not only met but in some cases "exceeded expectations" in achieving the goals set by the settlement.

Judge Alsup, who was initially skeptical of the settlement's effectiveness, now acknowledges the progress Pinterest has made. "I'm satisfied with Pinterest's compliance and plaintiffs' monitoring that compliance," he stated.

According to the order, Pinterest's diversity initiatives have already shown results. Women in leadership roles at the company increased from 33% to 40% by June 2023. The company also launched a pilot program to gather information on systemic issues that could hinder a diverse and inclusive environment. Additionally, Pinterest implemented the "Inclusive Product Program," which uses artificial intelligence to ensure diverse representation in content, particularly focusing on body types, shapes, and sizes.

Settlement Background and Judge's Oversight

The original lawsuit came in the wake of allegations by former female employees who claimed they were marginalized, excluded from meetings, and paid less than their male counterparts. The settlement, finalized in 2021, required Pinterest to undergo third-party assessments of its race, gender, and equity practices. These assessments are designed to ensure equitable pay, promotions, and leveling within the company, with progress reported to shareholders.

Judge Alsup had initially expressed concerns that the settlement might be merely "cosmetic," allowing attorneys to collect their fees without meaningful change at Pinterest. To address these concerns, he mandated that legal fees be disbursed in installments, contingent upon ongoing compliance updates.

The company has spent approximately $12.5 million of the $50 million pledged for reforms, according to the latest court filings.

Pinterest's Diversity Initiatives and Leadership Changes

Pinterest’s leadership has undergone significant changes since 2022. Under the leadership of current CEO Bill Ready, who joined that year, the C-suite is now roughly 50% women and 40% people of color. The company also reported that 52% of its overall workforce and 46% of its leadership roles are held by women. To further enhance diversity, Pinterest uses a "Diverse Slates Approach" in its hiring process, ensuring that diverse candidates are considered for open positions.

Encouragement for Continued Collaboration

Judge Alsup concluded his order by urging both parties to continue their collaborative efforts to implement the settlement’s terms over the next eight years.

Pinterest declined to comment on the new fee award, while counsel for the investors did not immediately respond to requests for comment.

The investors are represented by Louise Renne of Renne Public Law Group, along with Julie Goldsmith Reiser and Molly Bowen of Cohen Milstein Sellers & Toll PLLC. Pinterest is represented by Boris Feldman, Doru Gavril, and Elize Lopez of Freshfields US LLP.