On September 16, 2010, three women who were previously employed at Goldman Sachs filed a lawsuit against the company in the U.S. District Court for the Southern District of New York. Represented by private counsel, the plaintiffs alleged that Goldman Sachs engaged in a pattern of gender discrimination in violation of state law and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Specifically, they alleged that the company discriminated against them through its evaluation, compensation, and promotion policies. The plaintiffs sought injunctive and declaratory relief on behalf of a class of female financial-services employees of Goldman Sachs who were at the Associate, Vice President, and Managing Director corporate level.

On November 22, 2010, Goldman Sachs filed a motion to stay the claims of one of the three plaintiffs and compel arbitration on the grounds that her claims were subject to an arbitration clause that she signed as part of her employment agreement. The Court (Magistrate Judge James C. Francis IV) denied the motion on April 28, 2011, concluding that, "because an arbitration clause may not be enforced if it precludes the vindication of substantive rights, and because a pattern or practice claim under Title VII can only be brought in the context of a class action, [the plaintiff]'s Title VII claim cannot be committed to arbitration . . . ." Chen-Oster v. Goldman, Sachs & Co., 785 F. Supp. 2d 394, 398 (S.D.N.Y. 2011) rev'd sub nom. Parisi v. Goldman, Sachs & Co., 710 F.3d 483 (2nd Cir. 2013). However, on March 21, 2013, the U.S. Court of Appeals for the Second Circuit (before Judges Barrington D. Parker, Reena Raggi, and Gerard E. Lynch) reversed the District Court's ruling. Parisi v. Goldman, Sachs & Co., 710 F.3d 483, 488 (2nd Cir. 2013). The Second Circuit rejected the view that a preclusion of a pattern-or-practice claim amounts to a deprivation of the plaintiff's substantive rights since "pattern-or-practice simply refers to a method of proof and does not constitute a freestanding cause of action." Id. at 487 (internal quotation marks omitted).

On October 15, 2012, the case was reassigned to Judge Jesse M. Furman. Judge Analisa Torres replaced Judge Furman on May 24, 2013.

The parties proceeded to the issue of class certification. Both sides moved to exclude portions of the other's expert testimony for failure to meet the standards in Rule 702 of the Federal Rules of Evidence and Daubert v. Merrell Dow Pharmaceuticals. In a March 3, 2015 order, Mag. Judge Francis noted that courts disagree on whether to apply Daubert to motions for class certification. While noting that a full investigation into expert qualifications during class certification would be "premature," Mag. Judge Francis concluded that precedent applying Daubert to class certification was "more persuasive." After a review of the challenged experts' methods, Mag. Judge Francis excluded defendant's matched pairs analysis and report on the financial services industry in general and declared evidence from plaintiff's "rebuttal expert" to be inappropriate so early in the proceedings.

On the same day, Mag. Judge Francis issued a report on plaintiff's motion for certification of a class of female associates and vice presidents who worked in Goldman Sachs' Investment Banking, Investment Management, and/or Securities Divisions in the United States under Federal Rule of Civil Procedure 23, parts (b)(2) (for injunctive relief) and (b)(3) (for damages). Relying on Judge Sand's prior, reluctant ruling in this case that injunctive relief is not available to plaintiffs no longer employed by defendant (877 F. Supp. 2d 113, 121), Mag. Judge Francis recommended that plaintiff's (b)(2) motion be denied. Mag. Judge Francis also advised against certifying under (b)(3) because "countless individualized factors" prevented common claims from predominating in the case. Nevertheless, Mag. Judge Francis remarked that this "is a close case" and hinted that injunctive relief should not have been foreclosed.

Mag. Judge Francis declined plaintiff's invitation to reconsider the report advising against class certification in an August 3, 2015 order. However, Mag. Judge Francis did grant permissive intervention of two additional plaintiffs whose claims "present the same core legal and factual issues" as those of the existing plaintiffs. Plaintiffs filed their second amended complaint on the same day, adding the two intervenors as plaintiffs and removing the plaintiff consigned to arbitration.

One June 6, 2016, Judge Torres denied defendant's appeal of Mag. Judge Francis' order allowing intervention, finding no clear error in Mag. Judge Francis' decision that intervention was timely and non-prejudicial. In addition, Judge Torres declined to treat the motion to intervene as dispositive, which would have triggered a heightened standard of review.

Defendants moved for dismissal of intervenors' claims on the grounds that they, as former employees, did not have standing to obtain an injunction. In an April 12, 2017 opinion, Judge Torres rejected Judge Sand's expansive reading of Wal-Mart Stores, Inc. v. Dukes that favored defendant's position. Instead, Judge Torres ruled that former employees may seek injunctive and declaratory relief. In particular, Judge Torres decided that one intervenor had standing because she was employed on the date she intervened, and the other intervenor's claims were not moot because she might be eligible for reinstatement. Shortly thereafter, plaintiffs filed a supplemental amended complaint alleging retaliation by defendants as a result of the lawsuit.

Meanwhile, the court certified defendants' interlocutory appeal on the propriety of intervention on June 14, 2017. The Second Circuit denied the petition for leave to appeal on August 29, 2017. Defendants did obtain an order allowing them to file documents with "sensitive business information" relating to salaries under seal on July 28, 2017.

Judge Torres' decision that plaintiffs could seek injunctive relief removed the basis of Mag. Judge Francis' recommendation against class certification. Consequently, Judge Torres re-opened the question of whether (b)(2) class certification would be appropriate in an August 30, 2017 order.

Mag. Judge Francis was replaced by Mag. Judge Lehrburger on October 31, 2017.

In a March 30, 2018 opinion, Judge Torres rejected the parties' objections to Mag. Judge Francis' decisions on expert testimony. Judge Torres deferred judgment on (b)(2) certification due to the delays caused by the numerous conflicting decisions on its applicability thus far in the litigation. In addition, Judge Torres denied (b)(3) certification on plaintiff's claims of a "boy's club" culture since "individualized proof" would "overwhelm" common issues. However, Judge Torres granted (b)(3) certification on plaintiff's other disparate impact and disparate treatment claims. Defendants asked the Second Circuit to review (b)(3) certification, and Mag. Judge Lehrburger denied defendant's motion to stay proceedings pending the appeal in an April 16, 2018 order.

On July 24, 2018, Mag. Judge Lehrburger ordered defendants to produce class contact information "without delay," largely adopting defendants' wording of the opt-out form.

The Second Circuit dismissed defendants' appeal of (b)(3) certification as "unwarranted" on September 4, 2018. Shortly thereafter, plaintiffs submitted a letter to the court withdrawing their motion for (b)(2) certification. They noted that injunctive relief would be available to a (b)(3) class, expressed concern that the lawsuit had "gone off the tracks" with respect to the class certification issue (defendants had requested en banc review of (b)(3) certification), and expressed a desire to proceed quickly to the merits. In response, the court dismissed all pending motions relating to (b)(2) certification on October 3, 2018.

The case is ongoing as of December 6, 2018.

Jordan Rossen - 02/20/2014
Timothy Leake - 12/06/2018


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