US firm to pay Sh29bn to settle gender bias suit
The headquarters of investment banking and securities firm Goldman Sachs in lower Manhattan, New York, on June 22, 2012.
What you need to know:
- The funds will be shared among about 2,800 female associates and vice-presidents who participated in the class action.
- Each complainant will get about $50,000, making the settlement one of the largest payouts in a female discrimination suit.
- The initial suit by three former employees cited gender bias in pay, performance reviews and promotions.
Goldman Sachs, one of the largest investment banking institutions in the United States, has agreed to pay $215 million (about Sh29.4 billion) to settle a longstanding gender discrimination lawsuit filed by its former female employees.
In a joint statement released by the Wall Street giant and the plaintiffs on Monday, both sides agreed to forgo a trial that was scheduled for next month, in favour of an out-of-court-settlement.
The funds will be shared among about 2,800 female associates and vice-presidents who participated in the class action. Each complainant will walk away with about $50,000 (Sh6,825,000), making the settlement one of the largest payouts in a female discrimination lawsuit.
The initial suit, filed in 2010 by three former Goldman Sachs employees, cited gender discrimination against female associates through salary, performance reviews and promotions. Eight years later, it was granted class-action status after 2,800 women joined the suit as qualifying class members.
Besides settling the suit, Goldman Sachs agreed to engage an independent expert to analyse performance evaluation processes for promotion of vice president to managing director and address any gender pay gaps in the financial institution.
Advancing equality
Also in a statement, two of the original plaintiffs described the settlement as an advancement of gender equality for women who work on Wall Street.
“As one of the original plaintiffs, I have been proud to support this case without hesitation over the last nearly 13 years and believe this settlement will help the women I had in mind when I filed the case,” said Shanna Orlich.
Goldman Sachs is not the first corporate giant to pay out a gender discrimination suit in the recent past.
Last year, Google agreed to a $118 million (about Sh16.1 billion) to pay out over its gender pay gap dispute. In the case, 15,500 former women employees accused the tech giant of paying men more for doing the same job.
They also claimed that women were routinely locked into lower career tracks, leading to lower pay and bonuses.
Google is certainly not alone. Gender expert Alexandra Sufit, a founding member of Chief, a private network for the most powerful women executives globally, termed the Goldman Sach settlement a mere drop in the ocean of what is happening in corporate giants.
“If the goal here is to close the gender pay gap, then asking for salary history from a group that has traditionally been underpaid is likely to replicate the issue.
"Women are negotiating, so when they do, let them. While hiring managers may pat themselves on the back for striking a ‘good deal’, they are simply reinforcing existing gaps.
"And, finally, list that salary. If you intend to pay fairly, irrespective of gender, race or any other characteristic, then there should be nothing to hide,’’ Ms Sufit wrote on her LinkedIn.
