Posted on 16 Sep 2010
On Wednesday three former female employees at Goldman Sachs filed a lawsuit against the firm claiming that it discriminates systematically against women.
The employees contend that the investment bank intentionally pays its male employees more than their female counterparts, and promotes them more frequently. The complaint said that a persistent pattern of bias has resulted in women being underrepresented in the firm's management ranks.
"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.