Chen-Oster v. Goldman Sachs

In 2023, Outten & Golden and its co-counsel secured one of the largest gender discrimination settlements in U.S. history.

Chen-Oster v. Goldman Sachs was filed in 2010. The case, which accused Goldman Sachs of maintaining a sexist culture where women earned lower pay and received fewer opportunities for raises and promotions, spanned 13 years.

At the center of the lawsuit was Goldman’s biased performance review process. The bank used a “360-degree” review model, in which an employee’s supervisors, coworkers, and subordinates would review their performance each year and rate them on a scale of 1-5.

Those ratings would then be used to place employees into “quartiles,” which determined their eligibility for promotions and raises. The lawsuit claimed spots in the top quartile were limited and most often went to men.

Women were also vastly underrepresented among the bank’s upper management, which further contributed to biased promotion decisions, according to the lawsuit.

On the surface, 360 reviews and quartiling were seemingly neutral processes. But statistical analysis showed these subjective processes systematically favored male employees, causing women to receive lower pay, smaller raises, and fewer business opportunities. These disparities violated federal and city laws, including Title VII of the Civil Rights Act of 1964 and the New York City Human Rights Law, the lawsuit alleged.

As part of the settlement, Goldman Sachs agreed to pay $215 million to the class and update its 360 evaluations and quartiling processes. In addition, Goldman Sachs agreed to work with independent consultants to improve its evaluation processes and conduct pay equity audits for three years. It also pledged to better communicate with its employees about how they could earn a promotion.