Three former female employees at Goldman Sachssued the investment bank on Wednesday, contending that the firm discriminates systematically against women.
Source: goldmansachs.com
Goldman Sachs
The women claim that Goldman intentionally pays its male employees more than their female counterparts, and promotes them more frequently.
A persistent pattern of bias has resulted in women being underrepresented in the firm’s management ranks, the complaint said.
“The number of women in management positions at Goldman dwindles as the level of management rises,” the complaint said, citing Goldman data that showed that women made up 29 percent of the firm’s vice presidents, 17 percent of its managing directors and 14 percent of its partners.
Lucas van Praag, a Goldman spokesman, said, “We believe this suit is without merit. People are critical to our business, and we make extraordinary efforts to recruit, develop and retain outstanding women professionals.”
The complaint, filed in United States District Court in Manhattan, is the latest in a stream of lawsuits filed over the last decade accusing Wall Street firms of denying women the kind of pay packages and job opportunities granted to men. Other suits have claimed harassment in overwhelmingly male offices and trading floors.
In 2004, Morgan Stanley paid $54 million to settle accusations that it had denied rises and promotions to women, paid them less than men, excluded them from company events and subjected them to lewd behavior. The firm denied any wrongdoing as part of that settlement.
Most recently, three investment advisers who worked at Bank of America Merrill Lynch accused the bank of gender bias in a suit filed in federal court in Brooklyn in March. Bank of America has denied the accusations.
The same law firms that represented women in the complaint against Goldman Sachs are representing the plaintiffs in the Bank of America suit. The complaint against Goldman, which seeks class-action status, is notable because two of the plaintiffs held executive posts.
Their accusations highlight a delicate topic on Wall Street: the lack of women executives at the top. Currently, the most prominent include Sallie Krawchek, the head of global wealth and investment management at Bank of America; and Heidi Miller, head of international operations at JPMorgan Chase.
But a number of prominent female executives, including Erin Callan, the former chief financial officer of Lehman Brothers, and Zoe Cruz, a former co-president of Morgan Stanley, were ousted by their firms in the fallout from the financial crisis.
For Goldman, the lawsuit comes at a time when the firm, among the most prestigious and profitable on Wall Street, has taken a public relations beating. This summer, the firm agreed to pay $550 million to settle civil securities fraud charges related to the sale of subprime mortgage securities.
The firm has also come under fire for returning to profitability far more quickly than its competitors — a criticism that Goldman executives find puzzling.
The three plaintiffs in the Goldman lawsuit are H. Cristina Chen-Oster, who worked in the firm’s equities division from 1997 to 2005 and was promoted to vice president; Lisa Parisi, who worked in the asset management group from 2001 to 2008 and was promoted to managing director; and Shanna Orlich, who worked in the firm’s fixed-income unit from 2007 to 2008 as an associate.
The most detailed accusations come from Ms. Chen-Oster, who worked mostly in sales on Goldman’s convertible-bond desk. Ms. Chen-Oster claims in an affidavit that shortly after she joined Goldman in 1997, a celebration for a recently promoted male colleague took place at Scores, a New York strip club, and all the employees were encouraged to join.
The lawsuit contends that at the end of the night, a married male colleague escorted her to her boyfriend’s apartment building and in the hallway lobby pinned her against the wall, kissing and groping her.
That episode, which the male colleague reported to his supervisor the next morning, led to Ms. Chen-Oster’s experiencing “increased hostility and marginalization at the firm,” according to the complaint. The filing details Ms. Chen-Oster’s compensation throughout her tenure.
In her second year at the firm, Goldman paid her $475,000, a number she claims was significantly less than that of her male peers. By 2000, a year in which the stock market peaked, Goldman paid her $800,000, a figure she contends was at least 50 percent less than that paid to male counterparts.
Ms. Chen-Oster resigned from Goldman and now works as a managing director at Deutsche Bank.
Ms. Orlich, another plaintiff, portrays a male-dominated trading-floor culture centered on golf and other physical pursuits. Ms. Orlich, who received business and law degrees from Columbia, says in an affidavit that Goldman’s management would challenge one of her male colleagues, a former member of the Navy Seals, to do push-up contests and “other displays of masculinity.”
She claims to have never been invited to frequent golf outings, even though she was a varsity player in high school. A Goldman managing director also hired scantily clad female escorts wearing Santa hats to attend a holiday party, Ms. Orlich claims.
A portion of the complaint takes aim at Goldman’s widely known 360-degree reviews, evaluations of employees that involve feedback from a boss, subordinates and peers, that have become a model management tool for other corporations.
The plaintiffs contend that managers’ favoritism toward male employees skews the review process, disproportionately placing men in the top quartile of performance.
Janet Hanson, who was an executive at Goldman Sachs for 14 years and the founder of 85 Broads, a professional women’s networking organization named after the address of the firm’s former headquarters, says that this lawsuit belies the experience of most Goldman women professionals.
“For every woman at Goldman Sachs who feels she has been treated unfairly, I will find a thousand who don’t feel that way,” said Ms. Hanson. “Unfortunately, the people muzzled in a situation like this are the women who work there but can’t talk to the press, but if you asked them if they loved their jobs and are treated equally, the vast, vast majority would say yes.”