On The Case

Goldman Sachs asks for appellate help in sex discrimination class action

(Reuters) - After failing to bounce reinstatement claims by women alleging sex discrimination, Goldman Sachs has asked the 2nd U.S. Circuit Court of Appeals to step in. On Monday, the bank’s lawyers at Sullivan & Cromwell filed a request for interlocutory appeal, arguing that the 2nd Circuit should consider two novel questions stirred up in a long-running class action by women who claim they were underpaid, unfairly evaluated and ultimately lost or left their jobs because Goldman treated women differently than men.

Goldman contends that U.S. District Judge Analisa Torres of Manhattan disregarded a U.S. Supreme Court directive in 2011’s Wal-Mart v. Dukes when she ruled that women who no longer work at Goldman can sue to change the bank’s employment procedures.

According to Goldman, the 9th and 11th Circuits have both said former employees don’t have standing to pursue injunctions against their ex-employers and trial courts within the 2nd Circuit have split on the question.

The bank also asked the 2nd Circuit to consider whether former employees who have not claimed they were fired can demand reinstatement. According to Goldman’s brief, none of the four women named in the class action – which seeks backpay, reinstatement and injunctive relief – has alleged she was wrongfully terminated. Two resigned. One lost her job after the 2008 financial crisis and another left when Goldman sold her entire unit. The bank said in its brief to the 2nd Circuit that, contrary to Judge Torres’ ruling in its case, five federal appellate circuits have held former employees “must have a valid claim for unlawful discharge to seek reinstatement.”

The 2nd Circuit rarely grants interlocutory, or mid-case, appeals but even Judge Torres, in a June 14 order certifying the standing and reinstatement issues Goldman raised, agreed that there is “substantial disagreement” and “conflicting authority” on the questions. Lieff Cabraser Heimann & Bernstein and Outten & Golden, which represent the women suing Goldman, opposed Judge Torres’ certification of the issues. According to Adam Klein of Outten, the plaintiffs also intend to ask the 2nd Circuit to deny Goldman’s request for review. “We do not think that the 2nd Circuit should review issues on a piecemeal basis,” he said in an email.

The Goldman gender discrimination case dates back to 2010, when former Goldman executives Cristina Chen-Oster and Shanna Orlich filed a complaint alleging the bank denied them equal pay and promotions because of their gender. In 2012, after the Supreme Court’s Wal-Mart ruling, U.S. District Judge Leonard Sand, who was then overseeing the case, dismissed the women’s injunctive claims, holding that they didn’t have standing. In 2015, U.S. Magistrate Judge James Francis recommended against certifying an injunction class, relying on Judge Sand’s 2012 decision.

Two new plaintiffs, Allison Gamba and Mary de Luis, then joined the case. Gamba worked for Goldman until 2014, when her business unit was sold. De Luis resigned in 2016 when Goldman denied her request for a transfer. Goldman moved to dismiss the new plaintiffs’ class claims for injunctive and declaratory relief under Judge Sand’s 2012 decision that former employees didn’t have standing.

Judge Torres denied the motion in her ruling last April, holding that Judge Sand’s 2012 decision was clearly erroneous. Torres agreed with several other trial judges in the 2nd Circuit that the Supreme Court’s discussion in Wal-Mart of the standing of former employees was non-binding dicta. She also said former employees have standing to seek a change in employment policies when they want to regain their old jobs. (I should point out that although Goldman argues none of the women claim to have been wrongfully fired, all of them assert they lost their jobs because Goldman’s allegedly discriminatory policies restricted their opportunities within the bank.)

The trial judge has not yet decided whether to certify injunctive or damages classes. She has called for briefing on the issue of money damages while Goldman pursues its interlocutory appeal.

Plaintiffs’ brief opposing the appeal is due in July. Class lawyer Klein declined to comment additionally.