Goldman Sachs to pay $215mn to settle gender discrimination lawsuit

Goldman Sachs has agreed to pay $215mn to settle a longstanding gender discrimination lawsuit brought by former female employees who said they were consistently underpaid and undervalued by male colleagues.

The two sides agreed to the settlement and will now forgo a trial that had been scheduled for next month in a New York federal court, lawyers for the women confirmed. The funds will be dispersed among approximately 2,800 associates and vice-presidents who participated in the class action, primarily in the investment banking and securities divisions.

About a third of the proceeds are expected to go towards fees for the plaintiffs’ lawyers, according to a person familiar with the details.

As part of the agreement, plaintiffs’ lawyers said Goldman Sachs had also undertaken to hiring an independent expert “to conduct an additional analysis on performance evaluation processes” at the bank, as well as conduct “pay equity studies”.

The original claimants, including former Goldman employees Cristina Chen-Oster and Shanna Orlich, first sued Goldman in 2010 and won the right to lead a class-action lawsuit over sex discrimination in 2018.

They accused Goldman of company-wide policies and practices that led to better pay and promotion prospects for its male employees and alleged that the bank’s review process allowed managers, mostly men, to nominate people who contributed to appraisals of staff, leading to a “tap on the shoulder system”.

“My goal in this case has always been to support strong women on Wall Street,” Allison Gamba, one of the plaintiffs, said following the settlement. “I am proud that the result we achieved here will advance gender equity.”

Adam Klein, a lawyer at Outten & Golden who represented the women, said the settlement “offers meaningful relief to our clients”.

Jacqueline Arthur, global head of human capital management at Goldman, said the bank was “proud of its long record of promoting and advancing women and remains committed to ensuring a diverse and inclusive workplace for all our people”.

The settlement, which was first reported by Bloomberg, concludes a long-running legal case surrounding Goldman, which had underscored the struggle on Wall Street to diversify the finance industry’s workforce.

Last year, another former Goldman employee, Jamie Fiore Higgins, published a memoir of her 17 years at the bank in which she alleged she suffered bullying, discrimination and manipulation.

Goldman’s chief executive David Solomon has talked publicly about trying to diversify the bank’s workforce and published a set of hiring targets in 2019. In the group’s biennial selection process for its elite partner status last year, 29 per cent of the employees selected were women, a record high.

If the New York court overseeing the case approves the settlement, a third-party administrator will allocate settlement amounts “based on an objective formula” to class members, plaintiffs’ lawyers said.