Goldman Sachs Agrees to $215 Million Settlement to End Gender Discrimination Lawsuit
Goldman Sachs Group, Inc., agreed to a $215 million settlement in a class action lawsuit alleging widespread discrimination against women in pay and promotions. The settlement marks the end of one of the highest-profile lawsuits alleging unequal treatment of women on Wall Street.
In 2010, former executives Cristina Chen-Oster and Shann Orlich sued Goldman Sachs in the U.S. District Court for the Southern District of New York, alleging that the bank denied them equal pay and promotions because of their gender. The lawsuit was joined by nearly 3,000 former and current female associates and vice presidents. The class members alleged Goldman paid similarly situated female vice presidents over twenty percent less than their male counterparts and that twenty-three less female vice presidents were promoted to managing director roles.
Chen-Oster and Orlich maintained that Goldman fostered a culture “hostile” to women, alleging that the bank cultivated a “boy’s club” atmosphere despite several complaints from female employees. For example, Orlich alleged that Goldman implemented a “360-degree” review process that had a disparate impact on female senior manager evaluations and promotions. Chen-Oster alleged that she was sexually assaulted when she attended a Goldman Sachs party for a male employee’s promotion.
The New York federal court repeatedly spurned Goldman’s efforts to dismiss the lawsuit, resulting in almost thirteen years of protracted and highly contested litigation. The court set the case to go to trial, but, after several rounds of mediation, the parties reached a final settlement. Cara Greene, an Outten & Golden partner who worked on the case, commented, “while there has been some improvement in the financial services industry, there is still much to do and we hope that this case will be a catalyst for other companies to reexamine their pay, performance, and promotion policies and the impact it has on women.”
On May 15, U.S. District Judge Analisa Torres issued an order granting preliminary approval of the class action settlement. The settlement represents approximately 78% of potential damages in the case arising from the challenged performance evaluation and promotion processes, and 50% of all potential class damages, according to the class’s legal counsel. In addition to the damages, Goldman also agreed to an independent review and modifications to the evaluation and promotion processes under scrutiny, and Goldman agreed to have a third-party labor economist run a pay equity analysis for compensation cycles from 2023 to 2025.