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Magistrate Balks at Class Status in Goldman Case

MANHATTAN (CN) - While calling it a "close case," a federal magistrate recommended that a district judge deny class action certification to a lawsuit accusing Goldman Sachs of operating as a "boy's club."

H. Cristina Chen-Oster, who spent eight years as a Goldman vice president, led a class action in 2010, alleging that one of her male colleagues "pinned her up against a wall, kissed and groped her" without her consent.

Her co-plaintiff Shanna Orlich spent roughly two years at the bank, where, she said, her manager hired female escorts "wearing short black skirts, strapless tops, and Santa hats" for a holiday party.

Citing an estimate by their statistical expert, they claimed that their experiences reflected those of more than 1,700 women at the company facing discrimination in the form of wage gaps, glass ceilings and a chauvinistic corporate culture.

In a 46-page report on Tuesday, U.S. Magistrate Judge James Francis IV did not clear Goldman of these bias accusations, but he argued that proving the allegations would take case-by-case analysis inappropriate for a class action.

"Take a hypothetical business unit with four vice presidents, all women, who, according to the plaintiffs' statistical analysis, are each paid less than similarly situated male vice presidents," his report states. "This could reflect their manager's adherence to discriminatory performance measures. But quite plausibly, the budget for this business unit might simply be constrained as a result of the unit's poor financial performance in the prior year; the women would appear to be victims of discrimination even in the absence of any biased decision making."

The plaintiffs' statistician, Princeton University Professor Henry Farber, believed that these discrepancies could been blamed on discriminatory evaluations known as "360 reviews" and "manager quartiling," which allegedly skewed against women.

But Francis favored the analysis of Goldman's expert, Howard Baptist University professor Michael Ward, who suggested that "any causal relationship between those policies and apparent gender discrepancies is a complex issue, subject to individualized proof," according to the report.

The magistrate remained neutral on the subject of Goldman's corporate culture.

"Of course, in any large organization, there will be some, perhaps many, instances of discriminatory conduct, whether by supervisors or by co-workers, and Goldman Sachs has presented evidence that it takes steps to counteract instances of gender bias," he wrote. "But this is not the stage at which to decide whether there is in fact a pattern of pervasive discrimination at Goldman Sachs. It is enough for purposes of assessing commonality that the plaintiffs have submitted significant evidence in support of their claims."

The magistrate's recommendation will now head to U.S. District Judge Analisa Torres, who will conduct her own review.

Goldman's spokesman Michael DuVally said in a statement: "We are pleased that the court concluded that this case is not appropriate for class action treatment."

Chen-Oster's lawyer did not immediately respond to a request for comment.

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