Dive Brief:

• Goldman Sachs has agreed to pay $215 million to settle a long-standing gender discrimination lawsuit brought by former and current employees alleging the Wall Street giant consistently underpaid women, the company announced Monday.
• The settlement will include 2,800 women associates and vice presidents who participated in the class action, primarily belonging to the investment banking, investment management and securities division, from July 2002 to March 2023.
• For the next three years, Goldman will have an independent expert analyze performance evaluation processes and promotions from vice president to managing director levels. An independent expert will also perform pay equity studies to check any gender pay gaps, the company said in a statement.

Dive Insight:

While the case gives a peek into the prevalent inequality inside the financial industry, the two parties last week held talks to resolve the lawsuit before a trial was set to begin June 7 in the Southern District of New York.

The court will schedule a date for preliminary settlement approval, and, if approved, will have a third-party administrator issue notice to the class members. If the court gives the final approval, the third-party administrator will disburse the settlement amounts, the statement noted.

One-third of the settlement amount is expected to be set aside for attorney fees, Bloomberg reported earlier. 

The settlement also said Goldman would improve certain communications to employees in the vice president positions regarding career development and promotion criteria.

The lawsuit, first filed in 2010, alleged that the New York City-based bank discriminated against women regarding compensation, promotion, business opportunities and performance evaluations. The complaint argued that women were paid less than their male counterparts in the same rank, and they got fewer opportunities to move up.

“As one of the original plaintiffs, I have been proud to support this case without hesitation over the last nearly thirteen years and believe this settlement will help the women I had in mind when I filed the case,” Shanna Orlich said in a statement.

Last year, Jamie Fiore Higgins, a former Goldman employee, wrote about being bullied, discriminated against and manipulated in a memoir describing her 17-year journey at the bank.

The plaintiffs in the Goldman case — Cristina Chen-Oster, Allison Gamba, Mary De Luis and Orlich also claimed a boy’s club environment inside the company, which the court said would require individual inquiry and cannot be categorized under a class action.

Goldman has long pledged to diversify its ranks. Last year’s new partner class was 29% women, the highest proportion yet for the bank, according to Bloomberg.

“Goldman Sachs is proud of its long record of promoting and advancing women and remains committed to ensuring a diverse and inclusive workplace for all our people,” Jacqueline Arthur, Goldman’s global head of human capital management, said in a statement. “After more than a decade of vigorous litigation, both parties have agreed to resolve this matter. We will continue to focus on our people, our clients and our business."