Goldman Sachs Settles Gender Discrimination Suit

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Facts

  • Goldman Sachs announced Monday it has agreed to pay $215M to settle a class action lawsuit alleging widespread bias against women in pay and promotions, pending approval by a New York judge.1
  • The class action lawsuit — which began in 2010 and represents nearly 3K current and former associates and vice presidents — was scheduled to go to trial next month in federal court.2
  • The plaintiffs claim that Goldman Sachs maintained company-wide policies that discriminated against women when it came to pay and career advancement, such as managers mostly nominating men to be part of employee appraisals, allegedly creating a culture of favoritism toward male employees.2
  • The settlement will also see Goldman Sachs undertake a three-year independent review of its performance and promotion procedures to address alleged gender inequalities, as well as an analysis of any potential gender pay gaps at the bank.3
  • The case began as an Equal Employment Opportunity Commission complaint brought by Cristina Chen-Oster in 2005 before more plaintiffs joined the suit in 2010.4
  • Jacqueline Arthur, Goldman Sachs’ head of HR, said the company is "proud of its long record of promoting and advancing women and remains committed to ensuring a diverse and inclusive workplace,” with women making up 29% of its 2022 class of partners and managing directors.4

Sources: 1CNN, 2FT, 3Associated Press, and 4New York Post.

Narratives

  • Narrative A, as provided by Fortune. This settlement is a sign that the old boys’ club culture in finance is over, and there is a path for victims of gender discrimination to have their grievances heard. Hopefully, going forward there will be better working conditions for women at Goldman Sachs and all Wall Street firms.
  • Narrative B, as provided by Observer (NY). Although this settlement is encouraging, it reinforces Wall Street's culture of secrecy, as companies would rather privately arbitrate or settle their cases than have the lurid details of their misdoings brought before a court for the world to see. We might not witness real change until we’ve seen a landmark trial.
  • Narrative C, as provided by Knowledge at Wharton. While any type of discrimination should be stamped out, this settlement isn't an admission of guilt. And, despite claims to the contrary, forcing women into executive positions solely to fill a quota actually does more harm than good. Women, like men, should be hired for their experiences and accomplishments rather than their gender.