Over 17 long years — starting long before the #MeToo movement galvanized the nation — one of the most powerful banks in the country has been able to keep the lid on many embarrassing details of a high-profile gender discrimination case. A day of reckoning could be on the horizon, though, with a recent agreement between Goldman Sachs and a group of women suing the firm in that case to unseal their allegations of harassment and discrimination.

The names of the accused at the powerful investment bank will be blacked out and replaced with corporate titles, according to the agreement the two sides filed in June, but the details of their alleged actions will be unveiled for the first time. For a flavor of what’s been under wraps, consider a section of the women’s 2014 request for class certification entitled “Goldman Condones the Sexualization of Women and an Uncorrected Culture of Sexual Assault and Harassment.” Today, those words are followed by 23 black lines of redacted text. If the court approves the parties’ agreement and the two sides file the documents, the details will be disclosed for all to see as early as two weeks after the court approval.

These days, it would be “extraordinarily unusual” to see this level of detail about allegations against a Wall Street firm, said Linda D. Friedman, a lawyer whose Chicago firm brought high-profile class-action lawsuits against brokerage firms beginning in the 1990s. Wall Street was an early adopter of mandatory arbitration agreements that cut off employees’ access to the courts, she said, giving it a longer history of silencing complaints than most industries. And since a 2018 Supreme Court decision, companies have additionally been able to forbid employees from joining together in class-action lawsuits that can provide “a body of evidence that would not exist in arbitration,” she said. It is the rare case against a Wall Street firm that gets this far.

The case began back in 2005, when former Goldman Sachs Vice President Cristina Chen-Oster filed a charge with the U.S. Equal Employment Opportunity Commission on behalf of herself and other women at the bank. She claimed she received less pay than men at her level, got bad reviews after she reported a sexual assault by a senior salesperson and that she stopped getting meaningful work assignments when she returned from maternity leave.

The EEOC looked into the charges but closed the case in 2010, which released Chen-Oster to file a case on her own. Along with two other women, she filed a lawsuit in federal court three months after the EEOC closed its case. The plaintiffs sought status as a class that would represent thousands of women at Goldman.

How to Keep Discrimination Complaints Under Wraps

From the earliest days of gender discrimination complaints against Wall Street firms in the 1990s, defendant companies have shared a priority focus: Do whatever is necessary to keep complaints — and complainants — quiet. Banks and securities firms met this goal in large part by implementing, sometimes by way of sneaky tactics, policies that obligated employees to give up their right to court.

Morgan Stanley took court rights away from thousands of its employees by way of what looked to some workers like a routine company email. In 2015, the firm was looking to force employees into a new dispute resolution policy. So over the course of several months, it sent out batches of emails offering a choice to either opt out or accept the new policy that precluded use of the courts. Only 1% of the 15,656 employees who received the first batch of emails opted out.

But three months later, when the firm dispatched its second batch to 21,076 employees, opt-outs soared to 27.8%. What changed? A trade publication had published a story that explained the dire ramifications of failing to opt out, and many employees rushed to preserve their rights to access the courts.

Arbitration has been a powerful strategy for Wall Street firms looking to quash harassment claims and protect men. In 2018, when I studied 30 years of sexual harassment and hostile environment decisions by arbitrators at the Financial Industry Regulatory Authority, which runs Wall Street’s private judicial system, I found only 17 cases in which women won — 18% of all cases. Among a smattering of 14 harassment cases brought by men, though, 29% were winners.

This is an unbelievably long time to have to wait for justice. You have to question what we mean by justice at this point.”

~ Joan C. Williams, founding director, Center for WorkLife Law at UC Hastings College of the Law

Goldman is facing some potentially bad PR once those documents are released, but it could have been worse. The plaintiffs
had pushed to reveal the identities of two “high-ranking alleged sexual harassers” whose names appeared in six places in their highly redacted request for class certification. On June 9, the court ruled that the two names will not be released. After the ruling, the two sides wrote to the court with suggestions on how they would proceed with redactions before the documents are filed publicly.

That’s a lost opportunity, said Marybeth Cremin, a stockbroker who was lead plaintiff in a historic gender discrimination case against Merrill Lynch that was settled in the 1990s. “Releasing those names would have sent a message to everyone on Wall Street that there is no more hiding and that the old boys can’t protect each other anymore.”

That the Goldman case has even gotten to this point is something of a miracle. Over the 17 years that have elapsed since Chen-Oster filed her EEOC charge, Goldman has employed seven law firms — the women have two — to fight Chen-Oster and the other plaintiffs at every step.

Goldman has battled to keep documents secret, persuaded the court to eliminate more than 1,000 women from the class and tried several times to convince the court that the women had no business being certified to pursue a class action lawsuit in the first place. (Goldman made its most recent such request in March; the court has yet to rule on the motion). It even had the impudence to argue — without success — that a statistical report meant to illustrate pay disparities between men and women should exclude the compensation data of mostly male “outliers” who pulled in the biggest salaries.

The uneven legal power and long duration of the case makes it a stark example of the grueling challenges that women face when they fight back against unequal treatment at work, said Joan C. Williams, founding director of the Center for WorkLife Law at the University of California, Hastings College of the Law. “This is an unbelievably long time to have to wait for justice,” she said. “You have to question what we mean by justice at this point.”

Corporate defendants can benefit greatly when a case goes on for so long, said Nancy Erika Smith, the New Jersey employment lawyer who represented former Fox News anchor Gretchen Carlson in her sexual harassment lawsuit against the late CEO of the network, Roger Ailes. “It’s helpful to drag it out,” she said. “You lose class members when they die, go to other firms, get fired or get sick. Destroying the class is the whole point.”

If you are treating women as sex objects, it doesn’t take a big leap to say you are probably not paying them as humans.”

~ Nancy Erika Smith, employment lawyer

Notwithstanding the potentially unsavory details that will emerge if the unredacted files are made public, a potential trial would focus on discrimination in Goldman’s compensation, promotion and employee evaluation systems — not sexual harassment. The court
said in 2018 that the women’s so-called boys’ club allegations of sexual assault, sexual harassment, stereotyping, impunity for misconduct and retaliation would require “individualized inquiries” that did not qualify for class treatment.

That doesn’t necessarily mean that the plaintiffs wouldn’t be able to tell a jury about alleged harassment, assaults or misogynistic language used at Goldman, said Smith: “If you are treating women as sex objects, it doesn’t take a big leap to say you are probably not paying them as humans.”

Goldman spokeswoman Maeve DuVally said in a written statement that the bank is proud of its record of promoting and supporting women, adding that the firm “has been recognized for transparency as we advance the effort within the financial services industry.”

By some measures, Goldman has indeed boosted women both on and off its payroll. The firm won’t sign on to take a company public unless it has two diverse directors — one of which must be a woman. It has committed $10 billion to address gender and racial biases faced by Black women. And, late last year, it announced that the 643 people who would be promoted to managing director as of January 1, 2022, represented its “most diverse class in our history.” A record 30% of that class were women — about in line with competitor Morgan Stanley’s numbers this year, according to Financial News. By Wall Street standards, a managing director slate that is one-third women is something to brag about, even in a world where women make up 49.58% of the population.

Michelle A. Lamy, a lawyer representing the plaintiffs, said the women “look forward to challenging the sufficiency of Goldman Sachs’ diversity and inclusion programs at trial.”

Pay Up and Change Your Culture. It’s Easy”

Goldman’s efforts to address diversity — effective or not — stand in stark contrast to the aggressive role it has played in fighting current and former female executives at the firm. By now, defense law firms know exactly what policies need to be in place at their clients’ firms to identify and minimize bias, William T. Bielby, a sociologist who gives expert testimony in discrimination trials, told Capital & Main. Yet those same law firms take no prisoners when employees blame powerful companies for failing in their diversity efforts, he said. Cremin, the former Merrill broker, said the duration, cost and tone of the litigation suggests Goldman isn’t committed to change. “Pay up and change your culture,” she said. “It’s easy.”

Goldman’s DuVally said that “creating and maintaining best-in-class programs that support women at the firm is not at odds with vigorously defending against a lawsuit that we consider without merit.”

For all Goldman’s hype about diversity, it’s instructive to hear how clueless the firm’s C-suiters can be about its equality efforts. During a deposition in late 2020, Gary Cohn, Goldman’s former president and chief operating officer, was asked if he had ever been part of the Management Committee’s Diversity Working Group. He stammered a bit. “I don’t — I actually — I don’t remember,” he said. Had he served on any firmwide diversity committees? “I don’t know if I technically served on the committees or not, but I may have.”

Last spring, Goldman was pushed by shareholders to investigate its arbitration policy and determine how its use of a private justice system impacted employees. In December, Goldman reported that while there had been concerns that arbitration may “allow harassment and discrimination to go unseen and unaddressed,” its review found that those concerns simply didn’t apply to Goldman. The law firm that represented Jeffrey Epstein and Roman Polanski in their sexual assault cases conducted the investigation, assisted by a scholar who is on the panels of two arbitration providers.

The Goldman Sachs women relegated to arbitration face a system that, by accident or by design, tends to produce better results for men.

In 2020, more than a year before it concluded the arbitration review, Goldman
persuaded the court in the Chen-Oster case to force more than 1,000 women out of the class and into closed-door arbitration. The approximately 1,800 women who remain in the public class action are able, of course, to speak freely about the litigation process that’s been winding through the federal court system for more than a decade — that’s how court works. It’s doubtful that the Goldman women stuck in arbitration will be permitted to do the same, though DuVally did not respond to questions about possible restrictions.

The Goldman women relegated to arbitration face a system that, by accident or by design, tends to produce better results for men. During my research into three decades of FINRA sexual harassment cases, the biggest award I found went to a female stockbroker who said she’d been harassed by a male broker; she got $3.5 million in damages plus $418,262 for legal fees. Though the arbitrators found the man liable for sexual harassment, his public records with FINRA include no mention of it.

Compare that to arbitrators’ response in a recent case in which a hedge fund executive said he’d been defamed when his firm said publicly that he’d engaged in sexual misconduct. On June 29, a highly sympathetic panel said the man had not committed sexual misconduct and awarded him $52 million. A FINRA spokesperson said in an email that, among cases between members of the securities industry, it was the biggest FINRA award ever.

It’s encouraging that the Goldman women have gotten this far with their fight in a public forum, said Friedman, the Chicago lawyer. But with Goldman again challenging the court’s decision to certify the class, the years-long battle could extend further with no trial in sight. Even the agreement to release the unflattering documents could be in peril should a settlement be struck that’s contingent on keeping everything sealed. That would be a big win for Goldman, said Friedman: “It would prevent the public and the victims from learning about the full extent of the gender hostility at the firm.”

This commentary is also posted on Capital & Main

BC Guest Commentator Susan Antilla is an award-winning investigative journalist and author who has written about employment discrimination and investor fraud for publications including The New York Times, The Nation, Bloomberg and The Intercept.

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