(Bloomberg) — Goldman Sachs Group Inc. has agreed to pay $215 million to put an end to a long-running class-action lawsuit that accused the Wall Street giant of systemically underpaying women.
The New York-based bank 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. About a third is expected to be set aside for attorney fees.
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 finalizing 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 $100 million, to end what was known as the Boom-Boom Room suit, which had accused the firm of harassment and discrimination.
Trials promise attention but also uncertainty. Lawyers for the women wrote in court records that some legal and procedural obstacles in their way were “significant,” even as they said they believed their claims have merit.
Goldman Sachs will engage an independent expert to conduct additional analysis on how it evaluates performance and its process for promotion, according to the statement.
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 behavior and unfair treatment out of the spotlight.
Goldman is “proud of its long record of promoting and advancing women and remains committed to ensuring a diverse and inclusive workplace,” Jacqueline Arthur, its head of human resources, said in a statement.
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% women, it counted as Goldman’s most inclusive group of promotions yet.
Jamie Fiore Higgins, a former Goldman managing director who wrote a memoir about her career last year called “Bully Market,” talked to her twin daughters Tuesday morning about the settlement as they drove to middle school. “This is progress, right?” one daughter asked, Higgins recalled afterwards. “Yeah, there’s progress,” Higgins answered. “But the progress is too slow.”