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Goldman Sachs Can't Ax 2 Ex-VPs' Claims In Gender Bias Row

Law360—Vin Gurrieri

Goldman Sachs was unable to convince a New York federal judge Wednesday to cut claims by two former female vice presidents out of a proposed gender bias class action, with the judge saying the women can pursue reinstatement even though they didn't make any allegations that the bank improperly fired them. 

U.S. District Judge Analisa Torres, who took over the case in May 2013, ruled rejected a motion by Goldman Sachs & Co. to dismiss named plaintiffs Mary De Luis and Allison Gamba from a class action that accuses the company engaging in firmwide, systematic discrimination against female employees. Both women had been allowed to intervene in the suit last year.

Judge Torres in part rejected Goldman Sachs' argument that both women lacked standing to act as class representatives to seek an injunction on behalf of existing workers included in the proposed class, and that neither could seek to be reinstated since they didn’t make a claim for unlawful termination.

"The court cannot identify any such requirement," Judge Torres said. "Reinstatement is, of course, most commonly employed to remedy unlawful discharge. However, the courts in this circuit have granted reinstatement for a variety of other circumstances."

Initially filed in 2010 by named plaintiffs H. Cristina Chen-Oster, Lisa Parisi and Shanna Orlich, the suit claimed that Goldman Sachs systematically disfavored female employees and denied them both equal compensation and equal opportunities for advancement in violation of Title VII and the New York City Human Rights Law.

In 2012, U.S. District Judge Leonard Sand ruled that the original named plaintiffs lacked standing to seek an injunction, removing all claims for injunctive and declaratory relief from the suit. That ruling led the plaintiffs to add De Luis and Gamba to the case. Judge Torres, who took over the case in May 2013, granted their request to intervene in 2016.

Gamba had worked for Goldman Sachs for 13 years beginning in 2001. After only two years, she was promoted to vice president, but was never promoted again even though she was eligible to advance to managing director as soon as 2005, according to court documents. Her tenure at the company came to an end in mid-2014 when the company divested itself of the department in which Gamba worked.

De Luis, meanwhile, claimed that Goldman Sachs refused to transfer her from the Dallas office where she worked to an office in Miami after the relocation of her significant other without having to settle for a demotion. That denial, she claimed, was retribution for her participation in the instant case.

Like Gamba, De Luis also claimed that she had been paid less than her similarly situated male colleagues. Both women are seeking reinstatement.

Goldman Sachs later asked the court to eliminate their claims for injunctive and declaratory relief, citing the U.S. Supreme Court’s 2011 decision in Wal-Mart Stores Inc. v. Dukes, in which the court held that people no longer working at the store don’t have standing to seek injunctive or declaratory relief against its employment practices. The high court ruling had formed the basis for Judge Sand’s ruling several years earlier.

But in Wednesday's ruling, Judge Torres said Judge Sand read Dukes too broadly, noting that other judges in the Southern District of New York have disagreed with his conclusion in cases that involve the same passage from Dukes.

"The court now finds that Judge Sand's determination that that Dukes categorically foreclosed former employees from seeking injunctive and declaratory relief is clearly erroneous, and that cogent and compelling reasons exist that require this court to exercise its discretionary power to revisit [his] ruling," Judge Torres said. "The court, therefore, joins the chorus of opinions in this district that hold that a former employee seeking reinstatement has standing to seek injunctive and declaratory relief."

Judge Torres, noting that De Luis was still a Goldman Sachs employee when she first sought to intervene in the case, said De Luis had standing at that time to seek injunctive and declaratory relief and rejected Goldman Sachs' argument that those claims became moot when she resigned. 

"To prove that De Luis' claim is moot, defendants must satisfy a 'heavy' burden, which they have not, to show that it would be 'impossible' to grant De Luis reinstatement," Judge Torres said.

As part of the ruling, Judge Torres also allowed the plaintiffs to file a supplemental complaint, which addresses De Luis' departure from the company and itself could support her being reinstated.

In regard to Gamba, Judge Torres turned aside Goldman Sachs' contention that her reinstatement isn't possible because the division she worked in is no longer part of the company. The judge pointed out that Gamba had sought reinstatement to her "rightful position" that she was denied because of the company’s allegedly discriminatory practices and not necessarily to the actual position she once held.

"Drawing all inferences in her favor, it is premature to foreclose the possibility that Gamba may be entitled to reinstatement at Goldman Sachs," Judge Torres said. "Similarly, the court cannot find that reinstatement is 'impossible' and thus cannot find Gamba’s claims to be moot."

Counsel for both parties were not immediately available for comment Friday.

The plaintiffs are represented by Adam T. Klein, Cara E. Greene and Paul W. Mollica of Outten & Golden LLP and Kelly M. Dermody, Anne B. Shaver, Rachel Geman and Tiseme G. Zegeye of Lieff Cabraser Heimann & Bernstein LLP.