Ex-Employees Sue Goldman Sachs, Claim Sex Bias

NEW YORK - APRIL 16: Stock prices whiz by on a ticker near the Goldman Sachs booth on the floor of the New York Stock Exchange April 16, 2010 in New York, New York. Goldman Sachs was charged with fraud by the Securities and Exchange Commission over its marketing of a subprime mortgage product, sending its stock price sharply lower. (Photo by Chris Hondros/Getty Images)
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Three women who formerly worked for Goldman Sachs & Co. are suing the big Wall Street firm for what they say is rampant gender discrimination that unfairly favors men in pay and promotions.

The lawsuit filed Wednesday alleges that Goldman has violated federal and New York City laws by engaging in a systematic "pattern and practice" of discrimination against female professionals at the firm. They are asking a federal judge to certify the case as a class-action suit on behalf of the firm's women employees.

The three a former vice president, a managing director and an associate also are seeking damages from Goldman for emotional distress and humiliation they say they've suffered and for lost income. And they want the firm to put in new policies for pay and promotion decisions.

"We believe this suit is without merit," Goldman spokesman Lucas van Praag in New York said in a statement. "People are critical to our business, and we make extraordinary efforts to recruit, develop and retain outstanding women professionals."

The suit was filed in U.S. District Court in New York. It was the latest in a series of such cases brought in recent years against major Wall Street firms, where a high-octane, often male-dominated culture has sparked complaints from women of discrimination as well as sexual harassment.

Goldman Sachs, with some 34,000 employees, is one of the most powerful and influential firms on Wall Street. The employees' suit cites 2009 company figures showing that women represented 29 percent of Goldman's vice presidents and 17 percent of its managing directors. Figures from 2008 had women representing only 14 percent of the firm's partners, the complaint said. Goldman isn't disputing the numbers.

Goldman is renowned for the exceptional talent it draws, astronomical compensation for top executives and unique, driven culture that is said to breed fierce loyalty. Treasury secretaries and other top administration officials have come to Washington from the firm.

The firm has been under harsh public scrutiny after the Securities and Exchange Commission filed civil fraud charges against it for allegedly misleading buyers of complex mortgage-related investments in 2007. Goldman settled the charges in mid-July by agreeing to pay $550 million the biggest penalty against a Wall Street firm in the SEC's history.

The three women filing the suit are H. Cristina Chen-Oster, who was a vice president for eight years in Goldman's convertible bonds department; Lisa Parisi, a vice president and later a managing director for a total of seven years in the firm's asset management division; and Shanna Orlich, who worked as an associate in the capital structure franchise trading group for a year.

They say in their suit that as a result of Goldman's discriminatory policies and practices, female employees have been paid less and promoted less often than their male colleagues with equivalent experience and abilities.

"The violations of its female employees' rights are systemic, are based upon companywide policies and practices, and are the result of unchecked gender bias that pervades Goldman Sachs' corporate culture," the suit alleges. "They have not been isolated or exceptional incidents, but rather the regular and predictable result of Goldman Sachs' companywide policies and practices."

Among other things, the former employees maintain, the firm gives its managers the vast majority of whom are men wide discretion to assign responsibilities and opportunities to their subordinates. The most promising assignments, fostering career advancement and better pay, most frequently go to men, they contend.

Among similar lawsuits in recent years, a federal judge approved in October 2007 a $46 million settlement of a class-action suit brought by a group of women alleging gender discrimination by Morgan Stanley. Six women initially sued; the suit was expanded to cover a class of around 3,000 women who worked at Morgan Stanley between August 2003 and June 2007.