Chen-Oster v. Goldman, Sachs & Co. LLC.

Background

The plaintiffs brought employment-discrimination claims against Goldman Sachs & Co. and The Goldman Sachs Group, Inc. The court had certified a class of approximately 3,320 present and former Goldman Sachs Associates and Vice-Presidents. Goldman later sought to compel individual arbitration for class members who had signed agreements containing arbitration clauses.

In March 2020, the court granted that request for approximately 1,150 class members, called the Fully Excluded Members, and conditionally granted it for approximately 690 class members who had signed Equity Award Agreements, called the Conditionally Excluded Members. The conditionally excluded members could opt out of arbitration and remain in the class after receiving notice. District Judge Analisa Torres later overruled the parties’ objections and adopted the arbitration decision in full.

The plaintiffs then asked the court to apply equitable tolling. Equitable tolling is a court-ordered pause in a legal deadline when a claimant acted diligently but an extraordinary circumstance prevented timely action. The plaintiffs argued that the affected class members might not know they had been excluded or conditionally excluded and needed time to obtain legal advice and decide whether to pursue individual arbitration. Goldman argued that the court lacked authority to toll deadlines for members who had been compelled to arbitrate and that the plaintiffs had not shown diligence or extraordinary circumstances.

Authority to Decide the Tolling Request

Judge Lehrburger held that a magistrate judge could decide the tolling request. The court explained that the request was not dispositive because it was not deciding whether any individual claim was already barred by the statute of limitations. Instead, it was deciding whether to prospectively pause the deadline for class members who had been compelled to arbitrate but had not received formal notice of their changed status.

The court also held that it had authority to toll the deadline for both groups. The Conditionally Excluded Members remained in the class unless they opted out of arbitration, so the court clearly had authority over their status. Although the Fully Excluded Members were no longer class members, the court concluded that it could use its equitable powers to protect them from prejudice caused by the change in their status. The court distinguished cases involving individual plaintiffs compelled to arbitrate because those plaintiffs had immediate, firsthand knowledge of the ruling. The affected class members here had not yet been notified.

The court stated that it was not deciding whether the members’ claims were time-barred or whether an arbitrator would ultimately apply equitable tolling. It was instead taking a prospective measure to prevent prejudice. If an affected member did not file for arbitration during the tolling period, an arbitrator could later decide whether further tolling applied.

Equitable-Tolling Requirements

The court found both requirements for equitable tolling satisfied. First, it found reasonable diligence. Judge Torres overruled the parties’ objections to the arbitration decision on September 15, 2021, and the plaintiffs sought tolling 16 days later, on October 1. The court also rejected Goldman’s argument that the relevant date was the March 2020 arbitration decision. It noted that an earlier stay had stated that arbitration deadlines were stayed while Judge Torres considered the parties’ objections.

The court further found that the affected members themselves could not fairly be faulted for delay because they had not been notified that they were excluded from the class or needed to pursue arbitration to preserve their claims. The court also rejected the argument that class counsel should have advised them in November 2018, before Goldman had moved to compel arbitration and before the court had decided the issue.

Second, the court found extraordinary circumstances. The members’ claims had been paused while the class action proceeded, and the members had been actual class members since certification in 2018. They had received notice indicating that they would remain in the class if they did not opt out, but they had not received formal notice that their status had changed and that the statute of limitations had begun running again. The court concluded that they needed time to consult counsel, assess their options, and take action in a large and complex case.

Ruling

The court rejected the plaintiffs’ request to toll the deadline until 90 days after resolution of Phase I of the class litigation, finding that request too indefinite. It also noted that it was uncertain whether a Phase I trial would occur because Goldman had pending motions for summary judgment and to decertify the class.

The court instead adopted the plaintiffs’ alternative request for an eight-month fixed period. In the conclusion, the court stated that the equitable-tolling motion was “granted in part and denied in part” and that the statute of limitations for the Excluded Members to file arbitration claims was tolled for 240 days after entry of the order. The Conditionally Excluded Members nevertheless still had to exercise their 45-day option to opt out of arbitration if they wished to remain in the class.