U.S. Court hears arguments on sex discrimination at Goldman Sachs

Wed Oct 22, 2014 5:32pm EDT
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By Mica Rosenberg

NEW YORK (Reuters) - Goldman Sachs Group on Wednesday attacked expert evidence offered by attorneys for former female employees in a U.S. federal sex discrimination lawsuit, arguing there was no pattern of gender-based pay and promotion disparities at the bank.

In the first day of arguments in a case launched in 2010, a lawyer for two former Goldman employees said the Wall Street giant displayed a "consistent" pattern of sexual bias, while the bank's attorney said such accusations were "baseless."

Cristina Chen-Oster, a former vice president at the firm, and Shanna Orlich, a former associate, together have accused Goldman of fostering a "boys' club" atmosphere where work-related events were held at strip clubs.

The women are seeking class certification and monetary damages for claims that Goldman consistently under-paid women executives and gave them lower performance-review marks.

"The pattern is consistent and clear," said plaintiffs' attorney Kelly Dermody at the court hearing in the Southern District of New York in downtown Manhattan.

She cited a statistical analysis done by Henry Farber, a Princeton University economics professor, which found that female vice presidents at Goldman on average earned salaries 21 percent below their male counterparts, while women associates earned 8 percent less. Farber's research, commissioned by the plaintiffs, also claimed to show gender discrimination in evaluations and promotions.

Goldman Sachs' attorney Robert Giuffra took issue with Farber's findings and called the accusations "baseless" and "unfair." He told Magistrate Judge James Francis the numbers presented by the plaintiffs "reflect a really flawed, overly simplistic model."

Goldman contends Farber and the plaintiffs are conflating the company's investment bank, investment management and securities divisions, even though each unit has many sub-divisions with widely different responsibilities and salaries.   Continued...

A Goldman Sachs sign is seen above the floor of the New York Stock Exchange shortly after the opening bell in the Manhattan borough of New York January 24, 2014.  REUTERS/Lucas Jackson