While this is a common quip that I find pretty funny, it's not really true. What actually happened was that while updating their code of conduct[0], Google changed it to only say "don't be evil" in one place instead of multiple[1].
Google was also sued by former employees who claim they were fired because they tried to prevent Google from doing evil[2], in accordance with the code of conduct they agreed to. Sadly that lawsuit ended with a secret settlement, so we'll never know what a jury thinks. Since "don't be evil" is still in there I suppose it could come up again.