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Goldman Sachs The Group Inc. agreed to pay $215 million to settle a long-running class-action lawsuit accusing the Wall Street giant of systematically demeaning women.
The New York-based bank made the agreement with lawyers representing about 2,800 female associates and vice-presidents, according to a joint statement from the bank and the plaintiffs’ lawyers. Bloomberg News earlier reported on the settlement, of which about a third is expected to be set aside for attorney fees.
Goldman Sachs will engage an independent expert to conduct further analysis of its performance evaluation processes, as well as its process for promotion, within three years, according to the statement.
The upcoming trial, scheduled for next month in New York, will provide a rare public forum for testimony about inequality within the financial industry, where all but one of the six largest US banks are run by men.
The two sides reached an agreement, racing to settle before trial, Bloomberg News reported last week.
The case is closely watched in an industry where there are women long said that complaining about unfair treatment can derail careers. Although the test was to focus on salary and promotion statistics, and a judge said that the question about the atmosphere of the men’s club did not qualify for class treatment, it was prepared to be more than a bag of number. It may have examined some of Goldman’s workplace fabric, thanks in part to testimony from executives.
The settlement is larger than the amount Smith Barney paid decades ago, more than $100 million, to end what became known as the Boom-Boom Room suit, which accused the company of harassment and discrimination. Play Video
The Goldman suit was first brought by Cristina Chen-Oster, a Massachusetts Institute of Technology graduate who joined in 1997 and sold convertible bonds. He filed a discrimination COMPLAINT in July 2005 with the US Equal Employment Opportunity Commission, then sued in 2010. Goldman fought – successfully, in some cases – to send some women’s cases to arbitration, a more secretive system.
But mandatory arbitration agreements are not the only tools in the corporate arsenal. Nondisclosure agreements and settlements have long been used on Wall Street and beyond to obscure claims of misconduct and unfair treatment.
Over the years, Goldman and its peers have pledged to diversify their ranks, recognizing that they need to do better. Although last year’s Goldman associate class was 29% women, it is considered Goldman’s most inclusive group of promotions.
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