Last year, as we’ve reported, the defense lawyers lost a bid to force one of the three named plaintiffs into individual arbitration. Then they failed to block the plaintiffs lawyers from taking discovery about Goldman’s allegedly discriminatory policies across all divisions of the bank. And on Tuesday, Manhattan federal district court judge Leonard Sand rejected Goldman’s arguments that one of the named plaintiffs was barred from bringing class claims because she failed to assert class allegations in an earlier complaint before the Equal Employment Opportunity Commission.
“This is the most heavily litigated complaint at the pleading stage that I’ve probably ever faced in an employment case,” said Kelly Dermody of Lieff Cabraser Heimann & Bernstein, who represents the plaintiffs along with Adam Klein of Outten & Golden.
In September 2010 Outten & Golden and Lieff Cabraser filed the suit with great fanfare on behalf of three named plaintiffs, alleging that Goldman systematically discriminated against female professional employees and favored male associates, vice presidents, and managing directors in pay and promotions. Goldman’s lawyers quickly moved to stay class claims and compel individual arbitration with one of the named plaintiffs, Lisa Parisi, based on a clause in her employment agreement. A magistrate judge twice rejected those efforts, and Judge Sand upheld his decision, despite the defense lawyers’ insistence that the U.S. Supreme Court’s ruling last year in AT&T Mobility v. Concepcion required Parisi to arbitrate her claims. (Goldman filed an interlocutory appeal of Judge Sand’s ruling to the U.S. Court of Appeals for the Second Circuit.)
Tuesday’s decision by Judge Sand came in response to a separate defense Goldman raised against one of the plaintiffs, H. Cristina Chen-Oster, a former vice president in Goldman’s equities division. Plaintiffs can only sue in federal court under Title VII after bringing discrimination claims to the EEOC. Goldman’s lawyers, led by S&C’s Theodore Rogers Jr. and Paul Hastings’s Barbara Brown, sought to strike Chen-Oster’s class allegations on the grounds that she “raised exclusively individual claims in her administrative complaint” before the EEOC.
Federal magistrate judge James Francis IV recommended to deny Goldman’s motion to strike Chen-Oster’s class claims in September, finding that she’d properly raised allegations of class-wide discrimination and exhausted her administrative remedies before the EEOC. On Tuesday, Judge Sand agreed. “[N]o case presented to this Court–nor, we add, identified by this Court after an exhaustive inquiry–supports Defendants’ interpretation that a plaintiff must, as a threshold requirement to a later class action, allege facts in her EEOC charge about herself and about other co-workers,” the judge wrote. The decision is not immediately appealable.
So far, so good for the plaintiffs. But there’s another defense challenge to the plaintiffs’ standing to bring class claims that hasn’t been ruled on yet. And it’s a biggie. In July Goldman moved to strike all class claims in the case on the grounds that they failed the tightened requirements for class certification put forward by the U.S. Supreme Court last year in Wal-Mart v. Dukes. The plaintiffs claims are “quintessentially individualized,” Goldman asserted. The motion was referred to magistrate judge Francis, who hasn’t yet issued a recommendation.
Lieff Cabraser’s Dermody told us she’s confident the plaintiffs will survive the Dukes challenge and ultimately win certification of a class of “several hundred to a few thousand” women. Unlike in the Dukes case, she said, her clients allege a common system–Goldman’s performance management system–through which the claimed discrimination took place. Dermody also said she expected the court to find Goldman’s arguments premature, since the plaintiffs haven’t even come close to completing discovery and haven’t moved for class certification. “We believe its a huge overreach,” she said.
Goldman counsel Rogers of Sullivan & Cromwell declined to comment. Paul Hastings’s Brown didn’t respond to a message seeking comment.