Goldman Sachs Group Inc has agreed to pay US$215 million to put an end to a long-running class-action lawsuit that accused the Wall Street giant of systemically underpaying women.
The New York-based bank struck the deal with lawyers representing about 2,800 female associates and vice presidents,a joint statement from the bank and the plaintiffs’ lawyers said.
Bloomberg News earlier reported on the settlement, of which about one-third is expected to be set aside for attorney fees.
Photo: Reuters
Goldman Sachs is to engage an independent expert to conduct an additional analysis on performance evaluation processes, as well as its process for promotion, for three years, the statement said.
The trial, scheduled for next month in New York, would have provided a rare public forum for testimony about inequality inside the financial industry, where all but one of the six biggest US banks have only ever been run by men.
The case was closely watched in an industry where women have long said that complaining of unfair treatment can derail careers.
Although the trial was to focus on the statistics of pay and promotion, and a judge had said the question of a boys’ club atmosphere did not qualify for class treatment, it was poised to be more than a mere grab bag of numbers. It would likely have examined some of the fabric of Goldman’s workplace, thanks in part to testimony from executives.
The Goldman suit was first brought by Cristina Chen-Oster, a Massachusetts Institute of Technology graduate who joined in 1997 and sold convertible bonds. She 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 in the case to arbitration, a more secretive system.
However, 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 keep claims of bad behavior and unfair treatment out of the spotlight.
For years, Goldman and its peers have pledged to diversify their ranks, saying that they need to do better.
Alhough Goldman’s partner class last year was 29 percent women, it counted as Goldman’s most inclusive group of promotions yet.
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