GETTING SNAPPY
Snapchat to pay Americans one-time payment from $15m pot – eligibility to claim free cash connected to 10-year period
Snap Inc. will also have to carry out other actions behind closed doors under the terms of the agreement
ELIGIBLE Americans are set to get a one-time payment from Snapchat after the company agreed to a $15 million settlement.
It comes after the company was hit with a lawsuit by the California Civil Rights Department over allegations of discrimination.
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The suit claimed that Snapchat unfairly treated female employees by allegedly failing to prevent sexual harassment at work and retaliating against the victims for complaining.
In agreeing to the settlement, Snapchat Inc. has not admitted to any wrongdoing and has disagreed with the claims made in the lawsuit.
However, a settlement will resolve the claims and bring costly and time-consuming litigation to an end.
"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," the company stated.
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Meanwhile, the California Civil Rights Department celebrated its work in securing the settlement on Wednesday.
"This settlement with Snapchat demonstrates a shared commitment to a California where all workers have a fair chance at the American Dream," Kevin Kish, the director of the state's civil rights agency said.
"Women are entitled to equality in every job, in every workplace, and in every industry."
"In California, we’re proud of the work of our state’s innovators who are a driving force of our nation’s economy," Kish added.
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The majority of the payment pot will go to impacted Snapchat employees, officials said.
These are the women who worked for Snap Inc. in California between 2014 and 2024 who were discriminated against.
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In addition to the multi-million payout, Snap Inc. will also be forced to consult an independent reviewer who will evaluate the company's compensation and promotion policies.
They will also hire an independent, third-party auditor to assess sexual harassment, retaliation, and discrimination compliance.
Under the terms of the settlement, staff will be given training on each of these issues and how to prevent them in the workplace.
Snap will also need to inform employees that they are encouraged to speak out about harassment and discrimination and that they are safe from pushback if they do so.
While the company grew from 250 employees in 2015 to more than 5,000 seven years later, this expansion and growth did not apply to female employees, the lawsuit claimed.
Women "were told to wait their turn, were actively discouraged from applying for promotions, or lost promotion opportunities to less qualified male colleagues," the civil rights department alleged.
What's a class-action settlement?
Class action lawsuits offer groups of people, or 'classes,' a way to band together in court.
These suits are often brought by one or a few people who allege a company or other entity has wronged a large group of people.
When a suit becomes a class action, it extends to all "class members," or people who may have similar complaints to those who filed the suit.
Companies often settle class actions - offering payment to class members who typically waive their right to pursue further legal action by accepting money.
These payout agreements frequently include statements by the defendant denying wrongdoing. Companies tend to settle class actions to avoid the costs of further litigation.
Pollution, discrimination, or false advertising are a few examples of what can land a class action on a company's doorstep.
This was particularly an issue for females holding engineering roles which make up 70% of the company's workforce.
These women allegedly struggled to move on from entry-level positions.
It was also claimed that women who suffered sexual harassment at work faced punishments for speaking out including receiving negative performance reviews and having their contracts terminated.
In addition to this, senior male employees would allegedly promote junior male workers instead of more qualified women, the suit added.
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"Women were told, both implicitly and explicitly, that they were second-class citizens at Snap," the civil rights department claimed.
The $15 million settlement still needs to be approved in a final court hearing where it will be decided how much each eligible female worker will receive.