Legal hassles keep mounting for Goldman Sachs (GS - Free Report) with yet another suit over its discriminatory pay practices to be filed soon. Per Reuters, allegations for practicing pay discrimination against the bank’s female workforce will be filed as a group in a class-action lawsuit.
The plaintiffs, including around 2,300 female employees of Goldman, got the U.S. District Judge Analisa Torres’ permission in Manhattan for filing the suit. Plaintiffs accused Goldman of restricting their career path through discrimination.
Female employees and vice presidents, who have worked in Goldman's investment banking, investment management and securities divisions since September 2004, as well as workers in New York City since July 2002, alleged that the bank paid them less as compared with men, as well as misrepresented their performance reviews and promotion options.
Previously, in September 2010, Goldman was accused by two women for discrimination and maintaining a "boys' club atmosphere". However, the judge permitted for pursuing discrimination claims only.
Per the judge, the plaintiffs provided "significant proof of discriminatory disparate treatment" at Goldman. Precisely, a report documented average pay of female vice presidents and associates were 21% and 8% lesser than their male colleagues, respectively.
Further, plaintiffs have proof representing that Goldman was "aware of gender disparities and gender bias," but did not adjust its policies.
"We obviously are very, very pleased," Kelly Dermody, the lawyer for the plaintiffs, said in a telephonic interview. "This case is eight years old, and sometimes it's worth the wait," added Dermody.
Meanwhile, Goldman’s spokesperson was unavailable for comments.
Legal headwinds have been mounting for banks. These firms continue to face several cases and probes regarding their business conduct preceding the financial crisis. Though the banks have resolved many litigation issues over the past years, rising legal hassles keep dragging the companies' financials downward.
Goldman’s performance over the past six months reflects investors’ disappointment. Shares of this Wall Street bank have gained 4.7%, significantly underperforming the industry’s rally of 12.6%.
Currently, Goldman carries a Zacks Rank #3 (Hold).
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