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

Background

The order concerns a class action brought on behalf of female associates and vice presidents in revenue-producing positions at Goldman Sachs in the Investment Banking, Investment Management, or Securities divisions, or successor groupings, in the United States. The litigation lasted nearly 13 years and involved contested proceedings concerning performance evaluations, promotions, compensation, and related gender-discrimination claims.

The parties submitted a settlement agreement dated May 8, 2023. The court had preliminarily approved the settlement on May 15, 2023, and held a fairness hearing on November 7, 2023. Approximately 2,845 people were class members. Sixteen sought exclusion from the settlement, and one class member objected.

Settlement Approval

Applying Federal Rule of Civil Procedure 23(e), which requires court approval of class settlements, the court found that the settlement was procedurally and substantively fair, reasonable, adequate, and not the product of improper cooperation. The court considered the litigation’s complexity, the discovery and work already completed, the strengths and weaknesses of the claims, the views of experienced counsel, the risks of continuing toward trial, the settlement response, and the adequacy of notice.

The court overruled the objection because it sought to expand the class to include women in non-revenue-producing roles. The court stated that those roles were never part of the litigation or proposed class, were not included in the settlement negotiations, and are not affected by the settlement. The settlement does not release claims brought by women in those roles.

The court finally approved the settlement. For three years after it becomes effective, the programmatic relief includes validation studies of performance-evaluation and promotion processes; continued or revised practices concerning 360 reviews, performance criteria, promotion criteria, structured interviews, feedback, and monitoring for unexplained gender differences; and annual pay-equity analyses of base pay, bonus pay, and equity awards for 2023, 2024, and 2025. Goldman Sachs must take appropriate steps to address a gender pay gap if it cannot identify a non-gender-based explanation for that gap.

The settlement also provides a total of $215,000,000, including payments to class members, service awards, attorneys’ fees and litigation expenses, settlement-administration costs, and specified taxes. Participating class members are to receive settlement checks under the plan of allocation. The order provides procedures for reminders, address searches, replacement checks, a possible second distribution, and payment of remaining funds to the National Women’s Law Center and Equal Rights Advocates under the settlement’s stated terms.

Release and Dismissal

When the settlement becomes effective, class members who did not opt out will release specified known and unknown claims against the defendants. The released claims include claims based on Goldman Sachs’s 360 reviews, manager quartiling, promotion from vice president to managing director, compensation procedures, alleged intentional discrimination in evaluation and promotion practices, and corporate culture to the extent related to compensation, evaluation, and promotion decisions. The release covers remedies including back pay, front pay, damages, equitable relief, punitive damages, and attorneys’ fees.

The order excludes the settlement representatives’ individual non-class claims and class members’ claims concerning accounts held by Goldman Sachs, including custodial accounts or vested retirement benefits. The class claims, including those of the settlement representatives, will be voluntarily dismissed with prejudice when the settlement becomes effective. The action will also be automatically dismissed with prejudice at that time, except for the court’s continuing jurisdiction to oversee implementation.

Fees, Costs, and Service Awards

The court awarded Class Counsel one-third of the settlement, or $71,665,000, in attorneys’ fees, plus $6,684,806.15 in out-of-pocket litigation costs. It found the award reasonable after considering the time and labor required, the litigation’s magnitude and complexity, the risks, counsel’s quality of representation, the fee in relation to the settlement, and public-policy considerations.

The court also approved $250,000 service awards for each named plaintiff and settlement class representative: H. Cristina Chen-Oster, Shanna Orlich, Allison Gamba, and Mary De Luis. The court found that the named plaintiffs had spent significant time assisting the litigation and Class Counsel and had undertaken professional risks on behalf of the class.

Disposition

Judge Torres approved the settlement, attorneys’ fees and costs, and service awards; overruled the objection; ordered the class claims and action dismissed with prejudice when the settlement becomes effective; directed the parties to comply with the settlement agreement; retained jurisdiction over implementation for one year; terminated the identified motions; and directed the Clerk of Court to close the case.