Goldman Sachs Denies Boys’ Club Claims in Bid to Quash Class

Jul 28, 2014 6:29 pm ET

(Updates with Goldman Sachs claims in sixth paragraph.)

July 28 (Bloomberg) -- Goldman Sachs Group Inc. denied gender bias in compensation and tolerating a “boys’ club” atmosphere of excessive drinking and strip-club trips as it sought to quash a bid to unite female associates and vice presidents in a class action for discrimination.

Goldman Sachs rejected claims by former employees Cristina Chen-Oster and Shanna Orlich, opposing their court request to expand a lawsuit to represent more than 2,300 current and former female associates and vice presidents who worked at Goldman Sachs in the past decade.

“To be clear: Goldman Sachs does not tolerate discrimination of any kind,” the firm said in papers filed July 25 in Manhattan federal court.

Chen-Oster and Orlich, who sued in 2010, claim they have expert statistical analyses that showed a pattern of discrimination against women in earnings and promotions. They alleged that the bank tolerated a work environment where women are treated as “second-class employees.”

About 36 percent of professionals employed by New York- based Goldman Sachs are women, the firm said on its website, citing August 2013 figures. Women constitute 23 percent of officials and managers, and 21 percent of executive and senior officials and managers, the firm said.

The former Goldman Sachs employees cited their own percentages in court filings. They claimed female vice presidents earned 21 percent less than men, and female associates made 8 percent less. About 23 percent fewer female vice presidents were promoted to managing director relative to their male counterparts, they said in their complaint.

Goldman Sachs asked U.S. District Judge Analisa Torres to rule that Chen-Oster and Orlich should pursue their claims individually, rather than as representatives of all female Goldmans Sachs associates and vice presidents. Plaintiffs have more leverage in class actions because they can pool legal resources, more easily forcing a settlement.

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The bank argued that the women haven’t shown a general policy of discrimination or evidence that women were affected negatively as a class. Their allegations are individual claims that don’t apply to the other women, Goldman Sachs said.

The bank also specifically denied many of the allegations in the complaint, including claims that male employees took clients to strip clubs.

The firm said it prohibits employees from business outings involving “sexually oriented entertainment, such as entertainment at topless bars or lap-dancing bars.”

Goldman Sachs also submitted statements from female employees who said they haven’t been discriminated against or subject to harassment.

The firm said it has conducted diversity training programs for 20 years.

“I have never never heard anyone even mention the possibility of going to a strip club,” Samantha Davidson, an extended managing director, said in a written declaration. “I do not feel excluded from social events, such as events with clients and informal get-togethers after work with co-workers, including golf events.”

The case is Chen-Oster v. Goldman Sachs & Co., 10-cv-06950, U.S. District Court, Southern District of New York (Manhattan).

--With assistance from Michael J. Moore in New York.