Goldman Sachs, perhaps the most powerful investment bank and financial management firm on the planet, was accused of being a “boys' club” with a corporate culture “hostile to women” Tuesday, as two former female employees already suing the company sought to expand their case to include a host of other women.
The women, a former vice president and a company associate, sued Goldman in 2010, accusing Wall Street’s most respected financial company of paying female employees much less than their their male counterparts, and giving them fewer opportunities to move up.
But on Tuesday, after four years of gathering additional evidence, the women asked a federal judge to certify their complaints as a class-action lawsuit. “Goldman also perpetuates a gender-biased culture that sexualizes women and undermines their success,” according to Tuesday’s filing. If granted, the class action could open the case to perhaps thousands of former Goldman female executives and employees.
"This is a normal and anticipated procedural step for any proposed class action lawsuit and does not change the case's lack of merit," said David Wells, a spokesman for Goldman Sachs, in a statement.
The request to expand the suit shines a spotlight once again on decades of complaints by women who say Wall Street’s aggressive, male-dominated competitive culture keeps them out of the power loops, even as the markets continue to reap record-smashing profits in the aftermath of the Great Recession.
The allegations, which include statements from several former employees, paint a picture all-too-common on Wall Street since the 1990s, when there was a flurry of sex-discrimination lawsuits. Tuesday’s filing describes a Goldman work culture that routinely conducts business in strip clubs, excludes women from client golf outings, and condones the “sexualization of women” with an “uncorrected culture of sexual assault and harassment.”
In 2007, Morgan Stanley, another Wall Street giant, agreed to pay nearly $50 million to former female brokers who accused the bank of discrimination, a payout that came less than three years after Morgan had already agreed to pay $54 million to settle a similar sex-discrimination suit in 2004.
And in a notorious case known as the “boom-boom room suit” in 1996, 1,900 women sued Smith Barney over the sleazy, booze and sex parties the Wall Street firm hosted in the basement of one of its New York branches. The company paid $150 million to settle the case.
“You thought it was all over when the women at Smith Barney sued in the 1990s after the disgrace of 'The Boom-Boom Room?' " wrote Susan Antilla at TheStreet, a financial media company in New York. “Well, you thought wrong.”
According to the filing, Goldman paid female VPs 21 percent less than male VPs, and promoted 23 percent fewer women than men to managing directors – even when the women brought in more money to the firm, the suit alleges.
Last October, a federal judge ordered Goldman to turn over internal complaints from female employees and any other relevant personnel-related information about company policies. The company objected, calling it a “fishing expedition” at the time. The records it turned over showed 133 separate complaints, however.
Beyond the much-discussed pay gap, which has become an issue more broadly in this year’s midterm elections, former female employees at Goldman describe a relentlessly hostile environment – and even sexual assault – at the high-powered global investment firm.
“I was afraid to report the assault to management due to fear that I would be retaliated against for speaking up,” said H. Cristina Chen-Oster, the former Goldman vice president who brought the initial suit. “I finally reported the assault because I felt uncomfortable working with the man who had assaulted me and wanted to work in another office.
“More than 20 times, I heard male traders at Goldman Sachs say the female associates and vice presidents were hired for sales for their attractiveness and not their intelligence, and these women were ‘bimbos,’ ” said Denise Shelley, a former Goldman vice president, in a court filing. “I remember a particular instance when Goldman Sachs hired a woman, a beauty pageant winner, and the whole trading floor was laughing about her under the assumption that she was not very intelligent. I believe she was an Ivy League graduate.”
Goldman rejects the accusations, however. In 2010, the company also said the case had no merit, responding to the initial lawsuit this way: “People are critical to our business, and we make extraordinary efforts to recruit, develop and retain outstanding women professionals.”