Goldman Sachs has agreed to pay $215 million to settle a long-running class-action lawsuit that claimed the bank systematically underpaid and under-promoted women — avoiding a potentially headline-grabbing trial that had been slated for next month.
The Wall Street giant struck the deal with lawyers representing 2,800 current and former female associates and vice presidents working in the investment banking, investment management or securities divisions, according to a press release late Monday.
The settlement revealed that the “plaintiffs believe their claims are meritorious, (but) they also recognize the significant legal and procedural obstacles they would face in establishing liability.”
“If settlement has any purpose at all, it is to avoid a trial on the merits because of the uncertainty of the outcome,” the court documents read.
As part of the settlement, $71 million of the payment is to be set aside for legal fees. The rest will be divided among the women — which comes to about $47,000 per person — involved in the suit, who all worked at the investment bank sometime in the last 21 years.
For the next three years, Goldman Sachs also agreed to hire “an independent expert (that) will conduct additional pay equity studies,” the release said. In addition, the investment bank “will investigate and where appropriate address any gender pay gaps.”
The ongoing agreement will also require Goldman to “enhance select commutations to vice presidents regarding career development and promotion criteria.”
A trial was originally set for June in New York — 13 years after the class-action suit was first filed.
“This is a historic settlement for women on Wall Street, and we are very proud of our clients for their courage and tenacity in seeing this through almost 13 years of litigation,” Kelly Dermody, the plaintiffs’ counsel, told The Post.
The class-action suit was first brought by Cristina Chen-Oster, who was onboarded at Goldman in 1997 and sold convertible bonds. She filed a discrimination complaint in July 2005 with the US Equal Employment Opportunity Commission before suing in 2010 alongside two other plaintiffs: Lisa Parisi, a former managing director at Goldman, and Shanna Orlich, an associate.
When filing the initial suit, the women cited employee figures for evidence — that women made up 29% of vice presidents and 17% of managing directors.
Meanwhile, Goldman’s most recent partner and managing director promotions included the highest percentages of women in the history of the firm. The 2022 class of partners and managing directors is now 29% women.
“Goldman Sachs is proud of its long record of promoting and advancing women and remains committed to ensuring a diverse and inclusive workplace for all our people. After more than a decade of vigorous litigation, both parties have agreed to resolve this matter. We will continue to focus on our people, our clients and our business,” said Jacqueline Arthur, Goldman’s global head of human capital management, said in a press release.
Cara Greene of Outten & Golden LLP represented the plaintiffs and told The Post she “hopes this case will be a catalyst for other companies to reexamine their pay, performance and promotion policies and the impact it has on women.”
This story originally appeared on NYPost
