Goldman Sachs has agreed to pay $215 million to settle a class-action lawsuit over the systematic underpayment of female employees.
The investment banking giant reached deals with lawyers representing around 2,800 female colleagues and vice presidents.
The upcoming trial in New York, which was set for next month, would have provided a rare public forum for testimony regarding inequality inside the financial sector.
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The case was closely watched in an industry where women used to fear that complaining about unfair treatment might jeopardize their careers.
Though the trial was meant to focus on pay and promotion statistics, it was also set to probe some of the fabric of Goldman’s workplace, owing partly to testimony from executives.
For years, the Wall Street giant has committed to diversifying its ranks, admitting that it needs to improve.
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Although Goldman’s partner class was 29 percent female last year, it was the most diverse set of promotions yet.
Cristina Chen-Oster, a Massachusetts Institute of Technology graduate who joined in 1997 and marketed convertible bonds, was the first to file the claim.
She filed a discrimination complaint with the US Equal Employment Opportunity Commission in July 2005 and sued in 2010.
Goldman resisted and was successful in some cases in sending some women in the case to arbitration, a more secretive system.
It will hire an independent specialist to analyze further its ways of assessing performance and its promotion process.
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The deal exceeds the more than $100 million paid by Smith Barney decades ago to settle the Boom-Boom Room suit, which accused the company of harassment and discrimination.
Lawyers for the women said in court records that some legal and procedural hurdles were “significant,” even if they thought their statements have substance.
Nondisclosure agreements and settlements have long been used on Wall Street and beyond to keep allegations of wrongdoing and unfair treatment out of the public eye.
Jacqueline Arthur, head of human resources at Goldman, said the firm is “proud of its long record of promoting and advancing women and remains committed to ensuring a diverse and inclusive workplace.”
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