Bloomberg Law
May 12, 2023, 9:15 AM

Goldman’s Sex-Bias Deal Is ‘Milestone’ for Women on Wall Street

Khorri Atkinson
Khorri Atkinson
Senior Labor & Employment Reporter

A Goldman Sachs Group Inc. deal to pay $215 million to settle one of the biggest sex discrimination cases on Wall Street marks a monumental development that advocates say has the potential to usher in more gender equality in the financial industry.

The settlement is a victory for more than 2,800 female associates and vice-presidents who accused the financial service giant of systematically paying women less than their equally ranked male counterparts and denying them opportunities to move up from junior to senior roles.

The deal staves off a trial that was scheduled to begin next month. And courtroom proceedings would’ve likely coughed up damaging information about Goldman’s employee evaluation and promotion processes, employment law scholars told Bloomberg Law.

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In addition to damages, Goldman agreed under the settlement to allow an independent expert to investigate its evaluation and promotion practices, and conduct a pay-equity review for the next three year-end compensation cycles—wins the plaintiffs weren’t guaranteed at trial.

The agreement, which is before a federal judge in Manhattan for review and approval, could create a ripple effect on Wall Street, where all but one of the six biggest US banks is run by men and issues of gender discrimination and inequality have proliferated for decades, attorneys said.

“This is a huge milestone in addressing systemic gender inequality in the financial industry and bringing accountability,” said Zoe Salzman, a partner at Emery Celli Brinckerhoff Abady Ward & Maazel LLP.

“Hopefully, this is a real signal of willingness by the industry to tackle this issue in a more meaningful way and finally address it,” she said.

But the victory didn’t come without cost.

“It’s definitely a win for women on Wall Street. But it’s a really expensive, very hard-fought win,” said Elizabeth Tippett, a professor at the University of Oregon School of Law, who pointed out that the case has been in federal court for almost 13 years.

“It’s not going to be easy to replicate. If you look at the twist and turns of this case, the plaintiffs’ attorneys overcame so many procedural hurdles around certifying the case, obtaining discovery” and their ability to plead certain claims, Tippett said.

“This case, to me, seems like an exception rather than a rule because the amount of resources to keep this lawsuit going is truly astronomical.”

Arbitration Hurdles

The dispute dates back to July 2005 when Cristina Chen-Oster, who joined the bank in 1997 and sold convertible bonds, filed a discrimination complaint with the US Equal Employment Opportunity Commission.

The commission closed the case in 2010, releasing Chen-Oster to sue on her own in federal court along with two other female Goldman employees, all of whom sought to represent a class of thousands of women at the bank.

Goldman fought to require more than 1,000 women seeking to join the class to arbitrate their claims and to keep under wraps the names of some senior bank executives who were mentioned in internal complaints.

The settlement also grants relief to current and former employees who were either forced to opt out of the class or arbitrate their claims.

A representative for Goldman Sachs declined to comment beyond a statement the company issued at the time of the settlement. “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,” Jacqueline Arthur, Goldman’s global head of human capital management, said at the time.

The company’s most recent partner and managing director promotions included the “highest percentages of women in the history of the firm,” Goldman said: the 2022 partner class was 29% women and the 2021 managing director class was 30% women.

Representatives for the plaintiffs didn’t respond to requests for comment.

Linda D. Friedman, founding partner of Stowell & Friedman Ltd., has brought several high-profile class-action lawsuits against financial firms since the 1990s. She said the Goldman case is “a perfect example” of how mandatory arbitration agreements make it difficult for workers to speak out about workplace issues and have their day in court.

Arbitration gives employers a “get out of jail free card,” Friedman said.

One of corporate America’s most powerful arsenals for warding off workplace discrimination claims, arbitration allows companies to remove the leverage that class-action status provides and force workers to resolve their grievances one-on-one in private.

Critics have long argued that this undercuts the justice system because it tends to favor companies. Arbitrators also are often retired judges or White men who don’t reflect the diversity of the workforce.

Congressional Action Needed

President Joe Biden last year signed bills into law ending forced arbitration for sexual harassment and assault cases, and voiding the use of some confidentiality agreements in employment contracts that prevent victims from speaking publicly about similar workplace misconduct issues.

But Friedman said lawmakers should take further action to curtail the use of mandatory arbitration in other work-related disputes not covered by the law, because Wall Street continues to lag behind the rest of corporate America in relying on this procedural tool.

“If a company doesn’t believe it has any accountability, it’s going to operate in a way that’s advantageous to the majority group on Wall Street, which is men,” she said. “If they had not had those mandatory arbitration agreements, the reckoning would’ve taken place a lot sooner.”

The Goldman case proves that litigation also “is not the most effective way” to curb discrimination and inequality in the workplace, Tippett said.

“Is every plaintiff going to survive all those procedural challenges?” she asked. “And what kind of plaintiff firm has all the resources to litigate a case for 13 years?”

Disparate Impact

The case also serves as a wake-up call for employers to regularly review their compensation, evaluation, and promotion practices to determine if they have a discriminatory impact on protected classes of workers, attorneys said.

“This is a good example that you can’t take comfort from the fact that their system didn’t overtly or explicitly discriminate,” Salzman said.

“With the systems and criteria they put in place, and the very unchecked discretion managers had and deployed, this case established that there was a discriminatory impact on women,” she said.

“It’s a very good lesson for” employers to “be mindful that a policy doesn’t have to be overtly discriminatory to have a discriminatory impact,” she said.

To contact the reporter on this story: Khorri Atkinson in Washington at

To contact the editor responsible for this story: Laura D. Francis at; Rebekah Mintzer at

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