Goldman Sachs has agreed to pay $215 million to settle a case concerning about 2,800 current and former female employees who accused the Wall Street bank of systematically underpaying and under-promoting women.
The case was first brought in 2010 as a class action by Cristina Chen-Oster, a former Goldman vice president who worked at the bank between 1997 and 2005, and other women. It asserted that the bank had systematically discriminated against women in pay, performance evaluations, and promotion. The bank has denied those allegations. But going to trial, which was scheduled for next month following 13 years of litigation, would have meant a full public airing of the women’s claims, and exposed Goldman Sachs executives to potentially uncomfortable questions.
“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,” said Jacqueline Arthur, head of human capital management at Goldman Sachs, in a May 8 press release.
Who will benefit from Goldman’s gender payout?
The payment will cover legal fees, and then be divided between a cohort of women working in certain positions at the bank over the last 21 years. It covers most women who worked as associates or vice presidents in the investment banking, investment management, or securities divisions of Goldman Sachs in New York between July 2002 and March 2023, or elsewhere in the US from September 2004. (Check here if you are covered.)
The women named in the case—Cristina Chen-Oster, Shanna Orlich, Allison Gamba, and Mary De Luis—said that they were seeking to highlight systemic discrimination against women across the US banking sector. “It’s our duty and our right to shine a light,” Chen-Oster told Bloomberg back in 2018, at which point she had already been personally fighting Goldman for 13 years.
“My goal in this case has always been to support strong women on Wall Street,” said co-plaintiff Allison Gamba in yesterday’s press release. “I am proud that the result we achieved here will advance gender equity.”
More details would have emerged had the case come to trial. As it is, the bank can avoid explicitly commenting on whether the three main allegations it brought were true, namely:
- At nearly all levels of its professional ranks, Goldman Sachs has paid its female professionals less than similarly situated male professionals, even though they hold equivalent positions and perform the same or substantially similar work;
- Goldman Sachs maintains policies and practices for promoting its vice presidents that result in the disproportionate promotion of men over equally or more qualified women. As a result, female vice presidents have been systematically denied promotion opportunities that are routinely afforded to their male counterparts.
- Goldman Sachs’ systems for evaluating employees’ performance lack key safeguards to ensure fairness and proper implementation, resulting in the systematic undervaluation of female employees’ performance.
The case had also sought to include the claim that Goldman had a “boys’ club” culture that adversely affected women, Bloomberg reported, but the court ruled the claim to be unsuitable for a class action because it would require the individual investigation of particular incidents.
As part of the settlement, the bank has agreed to bring in independent experts to review its pay, promotion, and evaluation practices, for the next three years.
In the UK, where it is mandatory for companies with over 250 employees to disclose their gender pay gap, Goldman Sachs reported women in some divisions were paid about half as much as men. The disparity is in part due to female employees working in less senior roles, the bank said.