Goldman Sachs has agreed to pay about $215mn to settle a longstanding gender discrimination lawsuit brought by former female employees who said they were consistently underpaid and undervalued by male colleagues, according to a person familiar with the matter.
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. The funds will be dispersed among more than 2,700 participants in the class action, while about a third of the proceeds is expected to go towards fees for the plaintiffs’ lawyers.
The original claimants, former Goldman employees Cristina Chen-Oster and Shanna Orlich, first sued Goldman in 2010. In 2018 they won the right to lead a class-action lawsuit over sex discrimination.
The plaintiffs had accused Goldman of company-wide policies and practices that led to better pay and promotion prospects for its male employees.
The plaintiffs alleged the bank “systematically [favoured] male professionals at the expense of their female counterparts” and that “at nearly all levels of its management ranks, [Goldman Sachs] paid its female professionals less than similarly situated male professionals, even though they hold equivalent positions and perform the same or substantially similar work with similar or in some cases superior results”.
They added that women were “excluded from promotion opportunities” partly because the bank’s review process allowed managers, mostly men, to nominate the people who contributed to appraisals of staff, leading to “a tap on the shoulder system”.
Goldman declined to comment while lawyers for the plaintiffs did not immediately respond to a request for comment.
The settlement, which was first reported by Bloomberg, will bring to an end the 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 in 2019 published a set of hiring targets. In the group’s biennial selection process for its elite partner status, 29 per cent of the employees selected were women, a record high.