Goldman Sachs was granted an interlocutory appeal to the U.S. Court of Appeals for the Second Circuit Wednesday, a move that sends questions over former Goldman employees’ standing in a long-running gender bias suit to the higher court for review.
Southern District Judge Analisa Torres said in her opinion that precedent on whether former employees seeking injunctive or declaratory relief lack standing, and whether a former employee who didn’t claim to be fired unlawfully can be reinstated under Title VII federal employment protections required review.
The suit against Goldman was filed in September 2010 by three female former employees seeking class action. They claimed they were discriminated against and faced retaliatory actions at the firm. In April 2015, two additional plaintiffs, Allison Gamba and Mary De Luis, moved to join the case. Gamba likewise no longer worked for Goldman at the time, while De Luis left the firm in the spring of 2016.
The case is Chen-Oster v. Goldman, Sachs & Co., 10-cv-06950.
Goldman’s team of attorneys, led by Sullivan & Cromwell partner Robert Giuffra Jr., fought from the beginning to keep Gamba and De Luis from joining the suit, claiming they lack standing. Their argument relies on a previous opinion in the case, issued by former Southern District Judge Leonard Sand in 2012. Sand held that under the U.S. Supreme Court’s Wal-Mart Stores v. Dukes, 131 S. Ct. 2541 (2011), former employees lack standing for injunctive and declaratory relief.
Torres, who took over the case from Magistrate Judge James Francis in May 2013, oversaw a series of motions that led to a request by the plaintiffs to reconsider Sand’s ruling. Torres overturned Sand’s ruling in April 2016, finding that the court “too broadly” read the Wal-Mart decision, which Torres said related to groups of employees not having standing. Other district judges held similar interpretations, she noted, pointing to a number of opinions arguing that Wal-Mart didn’t apply a blanket preclusion of injunctive relief for former employees.
Sand’s “erroneous” ruling faced “cogent and compelling reasons” that required the court to “exercise its discretionary power,” joining a “chorus of opinions” in the district that agreed Wal-Mart held that former employees seeking reinstatement have standing to seek injunctive and declaratory relief, Torres wrote.
On April 25, Goldman Sachs’ attorneys filed a motion asking the circuit to settle two questions raised by the conflicting decisions regarding Wal-Mart. First, whether former employees have standing in general, and second, whether a plaintiff who doesn’t allege unlawful discharge, but who separated from the company, may seek reinstatement.
“Defendants are not aware of any other court that has permitted former employees who have not alleged unlawful or constructive discharge to seek reinstatement,” Goldman’s attorneys wrote in a brief. “The principal decision this Court cited as support for the position that employees can seek reinstatement after voluntary resignation did not involve a resignation.”
Torres granted the motion, seeking clarity from the appellate court on both issues, and agreed that the reinstatement issues under Title VII, the split opinions on former employee standing between the Second Circuit and others such as the Ninth and Eleventh, and the material advancement issue in the case itself all warranted review.
Mollen said in an email that Goldman Sachs has requested that neither he nor Rogers comment on the court’s opinion.
Lieff Cabraser Heimann & Bernstein partner Rachel Geman, an attorney for the plaintiffs, said her side felt Torres’ opinion “got it correct the first time,” and that it represented a consensus within the circuit, and one they believe is growing in other circuits as well.
“Obviously the Second Circuit will take a look at it and, in the meantime, the case goes on,” Geman said.
Outten & Golden associate Christopher McNerney, the other lead attorney for the plaintiffs, could not be reached for comment.