Goldman Sachs has agreed to settle a pay discrimination lawsuit with 2,887 female employees and former employees by paying $215 million into a settlement fund. The company also must retain an outside firm to validate its performance evaluation and promotion processes, modify its evaluation and promotion process, and conduct yearly pay equity analyses for three years.
The plaintiffs had alleged discrimination in pay, promotions, and other employment terms. They challenged Goldman’s 360 Review process, which involved numerical ratings and qualitative comments by eight to twelve evaluators, including subordinates, managers, peers, and internal clients. They also challenged an evaluation process called “quartiling,” in which managers assigned employees to a quartile ranking based on their performance relative to other employees. The plaintiffs asserted that these practices led to both intentional disparate treatment and disparate impact pay discrimination in violation of Title VII of the Civil Rights Act of 1964.