As if it needed another PR hit, Goldman Sachs (NYSE: GS) has been sued by three former employees--two executives and one associate--for gender discrimination that denied women pay and career advancement opportunities. The lawsuit--here's the complaint courtesy of the WSJ--seeks class-action status on behalf of all female managing directors, vice presidents and associates over the last six years. This follows the Mommy Track suit filed by an executive who alleges discriminatory treatment after she had two kids. 

The latest suit was brought by Cristina Chen-Oster, a former vice president in convertible bonds; Lisa Parisi, a former managing director in asset management, and Shanna Orlich, a former associate in trading. The issue sadly is the old boom-boom room culture--it still thrives--as well as policies governing advancement and promotion. 

In the complaint, Chen-Oster relates an incident in 1997, at a dinner for an employee who had been promoted. Part of the festivities took place at Scores, a strip club. Later, a married male associate insisted "that he escort her to her boyfriend's apartment building a few blocks away. In the hallway outside the apartment, the male colleague surprised Chen-Oster by pinning her against a wall, kissing and groping her and attempting to engage in a sexual act with her." She complained but says that shortly thereafter she experienced "hostility and marginalization." 

It is a travesty that any female had experienced something of that nature. That it happened in 1997 doesn't lessen the sting. The company, as have many on Wall Street, will no longer tolerate this sort of behavior. My guess is that if it happened today, the accoster would be fired. While this behavior will be less tolerated, it's not hard to imagine women missing out on golf outing opportunities and the like. 

The more far-reaching charges are the ones that explore the issue of systematic discrimination. 

The complaint charges that the performance system discriminates against women, allowing for unacceptable subjectivity and bias. Regarding compensation, the complaint takes aim at the "Black Box," that is opaque to employees. Another charge: Goldman gives its managers, the vast majority of whom are men, "unchecked discretion" to assign accounts and responsibilities and to decide who gets administrative support and training. The complaint notes women are underrepresented in management, accounting for 14 percent of partners, 17 percent of managing directors and 29 percent of vice presidents. 

This has happened against a backdrop of fewer women on Wall Street in general. This is something the industry rally needs to address. - Jim