A group of shareholders is suing Pinterest and its board of directors, alleging that the company violated its fiduciary duty, wasted corporate assets, and abused its control by fostering a systematic culture of racial and gender discrimination that drove out women executives.

Pinterest’s top executives and the board “personally engaged in, facilitated, or knowingly ignored the discrimination and retaliation against those who spoke up and challenged the company’s white, male leadership clique,” according to the suit (PDF). As Pinterest’s user base heavily skews female, being publicly seen as a den of sexism and racism is damaging to the brand and therefore to the shareholders, the suit alleges.

“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 company spokesperson said in a written statement. “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.”

Happy exterior, rotten interior?

The shareholder suit cites several previous public claims of discrimination inside Pinterest, as well as new testimony from a half-dozen additional witnesses.

The first broad public allegations of discrimination inside Pinterest came from Ifeoma Ozoma and Aerica Shimizu Banks earlier this year. Ozoma and Banks, both Black women, worked on Pinterest’s public policy team until they left in late May, alleging that they experienced both rampant race discrimination inside the company and also retaliation for reporting it.

Soon after, The Washington Post interviewed Ozoma, Banks, and five other former Pinterest employees. All told the paper that Pinterest had an environment of little accountability, where “women were pushed out without warning” and top executives were allowed to continue in their roles, facing no consequences, even after multiple complaints were filed against them. More than a dozen former Pinterest employees also spoke to The Verge, Business Insider, and The New York Times around the same time, similarly describing experiences of exclusion and discrimination.

In August, the company’s former chief operating officer, Francoise Brougher, filed a lawsuit against Pinterest alleging that she was forced out of the company in retaliation for complaining about gender-based pay discrimination. “I believe that I was fired for speaking out about the rampant discrimination, hostile work environment, and misogyny that permeates Pinterest,” Brougher said at the time. “It is time to eliminate the ‘boys clubs’ that dominate far too many companies and make room for more women leaders and their ideas.”

Additional witnesses cited in the lawsuit not only backed up the public assertions from Ozoma, Banks, and Brougher but also added their own experiences. Several allege that Black employees were repeatedly promised promotions, roles, and project positions that never materialized or were denied promotions and title changes that would accurately describe work they were already doing. One former employee in the company’s HR division observed race-based pay disparity in offers to recruits, as well as significantly higher turnover among Black and Latino employees across the board.

On top of all the bad behavior, the suit alleges, Pinterest had its own internal legal team conduct the investigations of its own internal legal team rather than securing outside assistance. Investigators unsurprisingly then “intentionally looked the other way” instead of resolving underlying issues, the suit claims.

“Unlawful and hypocritical”

The kind of working environment alleged in the lawsuit would be toxic for any employer, but as the suit notes, discrimination against women and employees of color is particularly galling from Pinterest, specifically.

The face Pinterest presents to users is the very picture of inclusivity. For example, in October, the company explained how it was adding cultural sensitivity to searches for Halloween costume inspiration and made a point to boost search amplification for “underrepresented creators and businesses.”

The company has clearly been trying to demonstrate a turnaround since Brougher filed her suit, pointedly hiring racially diverse women executives for top roles. Since August, Pinterest appointed Andrea Wishom and Salaam Coleman Smith to its board. It also hired Ty McCray as the new head of the company’s diversity and inclusion efforts and Aya Kanai to be head of content.

But that, the suit alleges, is not enough. The plaintiffs seek a court order “directing the company to take necessary actions to end the systemic pattern of race- and gender-based discrimination” inside Pinterest, as well as financial damages.

The suit is similar to suits filed by groups of Alphabet (Google) shareholders in 2019 alleging that the company failed in its fiduciary duty to shareholders when it allowed rampant sexual misconduct inside the company to persist and when it paid executive Andy Rubin millions to leave after credible accusations against him by a female coworker. The company and the shareholders agreed to a settlement in September that set aside about $300 million for future corporate diversity training and initiatives.