The parent company of Snapchat has agreed to pay $15 million to resolve a lawsuit filed by the California Civil Rights Department (CRD), alleging the company discouraged women from applying for promotions and failed to protect them from inappropriate sexual advances. This settlement, detailed in a filing in California state court, marks the end of a three-year agency investigation into Snap Inc.'s workplace practices.

Snapchat to pay $15M to settle discrimination lawsuit : Settlement Details

The CRD and Snap Inc. informed the Los Angeles County Superior Court on Tuesday that they had resolved the discrimination, harassment, and retaliation lawsuit. According to the CRD complaint, Snap's workforce expanded from 250 employees in 2015 to 5,000 in 2022. However, the company failed to ensure equal treatment for women, leading to pay disparities, promotional barriers, sexual harassment, and retaliation against female employees who spoke up.

As part of the settlement, Snap will pay $14.5 million to affected workers and $500,000 for the CRD's legal costs. Additionally, a consent decree requires Snap to hire a consultant to evaluate and recommend improvements to its compensation and promotion policies. The company must also provide at least two hours of training on discrimination in pay and promotions for its California employees and inform them of their rights to report harassment or discrimination without fear of retaliation.

Allegations Against Snap

The CRD alleged that Snapchat fostered a culture where women were paid less than men and offered fewer promotional opportunities, treating them as "second-class citizens." The complaint noted that women were assigned tasks below their abilities, told to "wait their turn" for promotions, and paid less than men in similar roles. Female employees also witnessed male managers promoting their less-qualified friends over female candidates, and hiring panels were dismissive of female applicants, particularly in engineering positions.

The agency also criticized Snap for its ineffective sexual harassment policy and insufficient training for supervisors, managers, and executives on preventing and addressing sexual harassment. This led to male employees and supervisors making unwanted sexual advances and engaging in other inappropriate conduct. When women reported discrimination and harassment, Snap retaliated by denying them professional opportunities, giving negative performance reviews, forcing transfers, or terminating their employment.

Snapchat to pay $15M to settle discrimination lawsuit : Mediation and Agreement

The CRD's investigation, spanning from October 2019 to June 2022, led to mediation with Snap to resolve the claims. If the court approves the consent decree, any woman employed by Snap between January 2014 and the present will receive at least $1,360, with tenure adjustments for those employed for more than six months.

A Snap spokesperson told Law360 that the company disagreed with the CRD's claims but opted to settle based on the cost and impact of litigation and the scope of the CRD's previous settlements. For example, in December, Activision Blizzard agreed to pay $54 million to resolve similar claims.

"For several years now, we have successfully implemented tools and governance to achieve pay equity, and we will keep investing in and implementing policies to ensure team members continue to be valued and paid equitably for their work," the spokesperson said.

Statements from CRD and Legal Representation

CRD Director Kevin Kish stated in a news release that the settlement with Snap Inc. "demonstrates a shared commitment to a California where all workers have a fair chance at the American dream."

"In California, we're proud of the work of our state's innovators who are a driving force of our nation's economy," Kish said. "We're also proud of the strength of our state's civil rights laws, which help ensure every worker is protected against discrimination and has an opportunity to thrive."

The California Civil Rights Department is represented in-house by Jamie Crook, Alexis McKenna, and Rumduol Vuong. Snap Inc. is represented by Catherine Conway and Tiffany Phan of Gibson Dunn & Crutcher LLP and by Adam Levin, Stephen A. Rossi, and Corey Singer of Mitchell Silberberg & Knupp LLP.