NEW YORK - Goldman Sachs Group has agreed to pay US$215 million (S$285 million) to put an end to a long-running class-action lawsuit that accused the Wall Street giant of systemically underpaying women.
The banking giant struck the deal with lawyers representing about 2,800 female associates and vice-presidents, according to a joint statement from the bank and the plaintiffs’ lawyers. Bloomberg News earlier reported on the settlement, of which about a third is expected to be set aside for attorney fees.
Goldman will engage an independent expert to conduct an additional analysis on performance evaluation processes, as well as its process for promotion, for three years, according to the statement.
The upcoming 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 two sides had been finalising a deal, racing to settle before trial, Bloomberg News reported last week.
The case was closely watched in an industry where women have long said that complaining of unfair treatment can derail careers. Though the trial was to focus on the statistics of pay and promotion, and a judge had said the question of a boys’ club atmosphere didn’t 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 settlement is bigger than the sum that Smith Barney paid decades ago, more than US$100 million, to end what was known as the Boom-Boom Room suit, which had accused the firm of harassment and discrimination.
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.
But mandatory arbitration agreements aren’t 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 behaviour and unfair treatment out of the spotlight.
For years, Goldman and its peers have pledged to diversify their ranks, acknowledging that they need to do better. Even though Goldman’s partner class last year was 29 per cent women, it counted as Goldman’s most inclusive group of promotions yet. BLOOMBERG