In a 49-page opinion issued last week, Judge Analisa Torres of the United States District Court for the Southern District of New York granted class certification to a group of women alleging that Goldman Sachs systemically and pervasively discriminated against female professional employees in violation of Title VII and the New York City Human Rights Law.

Plaintiffs claim they were discriminated against in pay, promotions, and performance reviews, and that Goldman Sachs: (1) employs facially neutral policies that disparately impact women; (2) knows of the policies’ disparate impact on women; and (3) maintains a “boy’s club” culture that discriminates against women. Chen-Oster v. Goldman Sachs & Co., March 30, 2018.  The class includes female associates and vice presidents who have worked in Goldman’s investment banking, investment management, and securities divisions since September 2004 (and employees in New York City since July 2002).  It is estimated that more than 2,000 plaintiffs are included in the class.

Goldman Sachs attempted to defeat class certification by arguing, among other things, that plaintiffs were required to show that its challenged policies concerning compensation and promotion were applied uniformly, but which plaintiffs could not do because the challenged processes were applied by managers in highly individualized ways.

In a fairly unusual move, Judge Torres overruled the magistrate judge’s recommendation to deny certification.

On their disparate impact claim, the court agreed that plaintiffs must show that Goldman Sachs used a “common mode of exercising discretion,” but held that this “common mode” did not mean that having flexibility in compensation and promotional decisions rendered class certification inappropriate. The court maintained that to interpret “common mode” in such a way would divest all discretion from lower-level managers, and render the meaning of “common mode of exercising discretion” self-contradictory.

The court distinguished the facts before it from that of the plaintiffs in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), where there was an absence of common job evaluation procedures.  There, the employees were subject to a wide variety of policies that differed.  In the Goldman Sachs case, however, it was undisputed that each class member was subjected to the challenged “360 review and quartiling processes,” and that all promotions from the vice president position were subject to a uniform process.

On plaintiffs’ disparate treatment claim, Goldman Sachs’ argument that class members lacked significant proof that the common modes were discriminatory also proved unsuccessful. The court concluded that plaintiffs had provided “significant proof of discriminatory disparate treatment,” relying on, among other things, plaintiffs’ expert report which asserted that female vice presidents and associates were on average paid 21 percent and 8 percent less than their male counterparts, respectively.

In one win for Goldman Sachs, the court declined to certify the claim that it maintained a “boys club” culture. Although the court found that establishing this claim could require generalized proof, certification was nevertheless inappropriate because Goldman Sachs’ rebuttal evidence would require individualized inquiries into each particular incident of sexual assault, sexual harassment, stereotyping, impunity of make misconduct, and retaliation.