Goldman Sachs To Pay $215 Million to Settle Equal Pay Lawsuit

To settle a long-running class-action lawsuit alleging that the Wall Street behemoth routinely underpaid women, Goldman Sachs Group Inc. has agreed to pay $215 million.

According to a joint statement from the bank and the plaintiffs' lawyers, the New York-based bank settled with attorneys representing approximately 2,800 female associates and vice presidents. It is estimated that solicitors will get about a third.

All but one of the six largest US banks has always been led by men, and the impending trial in New York next month would have provided a rare public venue for testimony about inequity inside the financial industry.

According to a report from last week by Bloomberg News, the parties were working feverishly to settle to avoid going to trial. 

In a field where women have long claimed that speaking up about discrimination may be detrimental to their careers, this case drew a lot of attention. Despite the judge's ruling that the issue of a boys' club attitude didn't warrant special treatment, the trial was shaping up to be more than just a collection of numbers about salary and promotions. The testimony of Goldman's executives would have allowed the investigation to delve into the culture of the company.

Over a decade ago, Smith Barney spent over $100 million to resolve a discrimination and harassment case known as the Boom-Boom Room litigation, but this payment is significantly larger.

Trials guarantee interest, but also potential danger. Despite their belief that their claims have substance, the women's lawyers acknowledged in court documents that they faced "significant" legal and administrative hurdles.

According to the statement, Goldman Sachs will hire an outside expert to investigate its performance review and promotion procedures in greater detail. 

Cristina Chen-Oster, a 1997 MIT hire and convertible bond salesperson, filed the original lawsuit against Goldman. In July 2005, she complained of discrimination to the US Equal Employment Opportunity Commission, and in 2010, she filed a lawsuit. Goldman fought and was sometimes successful in getting the matter sent to arbitration, a more private system.

There are other options available to businesses besides obligatory arbitration agreements. Wall Street and other industries have long relied on nondisclosure agreements and settlements to keep allegations of wrongdoing and unfair treatment out of the public eye.

Goldman is "proud of its long record of promoting and advancing women and remains committed to ensuring a diverse and inclusive workplace," according to Jacqueline Arthur, the company's head of human resources.

Goldman and other financial institutions have been promising to diversify their workforces for years. With 29 per cent female representation, Goldman's 2018 partner class was the firm's most diverse to date. 

Jamie Fiore Higgins, a former managing director at Goldman who published a memoir about her career last year titled "Bully Market," discussed the settlement with her twin girls on the way to middle school on Tuesday morning. “This is progress, right?” one daughter asked, Higgins recalled afterwards. “Yeah, there’s progress,” Higgins answered. “But the progress is too slow.”