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Judge Won't Send Goldman Sex Bias Action To Arbitration

Law360 - Abigail Rubenstein

A New York federal judge on Monday nixed Goldman Sachs & Co.'s bid to force arbitration in a putative class action accusing the financial giant of sex discrimination, accepting a magistrate judge's ruling.

U.S. District Judge Leonard B. Sand denied Goldman's motion to stay the proposed class action and compel arbitration of plaintiff Lisa Parisi's individual claims because her employment agreement with the financial firm included an arbitration clause.

Parisi, along with Christina Chen-Oster and Shanna Orlich, filed the case against Goldman in September 2010, alleging the investment firm paid female employees less than their male co-workers and gave them fewer promotions, and that it engaged in a slew of discriminatory practices that were “part and parcel of an outdated corporate culture.”

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The company claimed that Judge Francis’ refusal to enforce the arbitration agreement was contrary to federal law in light of the U.S. Supreme Court's ruling in AT&T v. Concepcion, in which the high court held that that the Federal Arbitration Act preempts state laws invalidating class action arbitration waivers.

Judge Sand's order denying Goldman's motion to compel arbitration did not provide the judge's reasoning, but the magistrate judge had ruled that the agreement was unenforceable because it would have prevented Parisi from bringing pattern or practice claims on a classwide basis.

“It's a terrific decision,” said Adam T. Klein of Outten & Golden LLP, who represents the plaintiffs. “It affirms our client's right to proceed on a class action basis in federal court.”