Goldman Sachs advisor claims race discrimination in lawsuit
Rebecca Allen, a 32-year-old wealth manager at Goldman Sachs, sued the bank and one of its managers, claiming she was discriminated against because she is black and Jewish.
A vice president in the private wealth-management division, Allen says in the lawsuit filed Wednesday in federal district court in Manhattan that while her performance at the bank has been exemplary, she was denied opportunities that directly affected her pay, earning potential and the possibilities of promotions in the future.
In her complaint, Allen says Goldman Sachs's few black employees are marginalized and treated differently when it comes to pay, promotions and opportunities to develop relationships with clients and earn commissions. She says she has never been given the chance to "steer" a customer who comes to the bank unsolicited ― one of the ways private wealth-management employees can add to their business.
Goldman's employees, like those elsewhere on Wall Street, are mostly white and mostly male. The percentage of black executives in the company's U.S. workforce dipped to 2.6% in 2016 from 3% in 2012, the year Allen joined the firm, according to data compiled by Bloomberg. While that's higher than the broader group of investment banks and securities dealers, it's below the level of the overall U.S. workforce.
Leslie Shribman, a spokeswoman for the bank, said the suit is without merit.
"Our success depends on our ability to maintain a diverse employee base and we are focused on recruiting, retaining and promoting diverse professionals at all levels," Shribman said, adding that she was speaking on behalf of the firm and for Christina Minnis, the partner named in the complaint.
The lack of racial diversity on Goldman's board and management team sends a message to employees of color that their skills, expertise and thoughts aren't valued, according to Allen's lawyers, Douglas Wigdor and Michael Willemin.
"The bank has prohibited her from covering certain clients because of the color of her skin," the lawyers said in an email. "This discriminatory mentality starts at the top."
Allen said in the complaint that she has been assigned fewer and less valuable clients than her male colleagues and hasn't received proper credit for her work. In one instance, she said a client was taken away from her "for explicitly racist reasons." She said she had spent three years courting the client, only to be removed from the relationship in November 2016 without explanation by Minnis, a partner in the investment banking division.
Allen’s direct supervisor, Corey Jassem, told her Minnis made numerous racist and anti-Semitic comments suggesting that Allen was removed because she is black and Jewish, according to the lawsuit. Jassem later said Minnis had only made anti-Semitic comments and not other racist remarks and told Allen she was “hypersensitive,” according to the complaint.
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Racial discrimination is even harder to prove in court than gender discrimination, said Cliff Palefsky, a civil rights lawyer at McGuinn Hillsman & Palefsky in San Francisco. Allen would need to show she's not getting the same opportunities as her white colleagues even though she's qualified.
"You're trying to prove someone's state of mind," Palefsky said. "A lot of decisions are not made for a single reason."
How financial advisers are matched with clients is particularly fraught. Managers may send certain accounts to white colleagues over minority employees because they're trying to predict the client's preference, he said. "It's a recipe for discrimination," Palefsky said.
Other banks have faced similar accusations of discrimination in account distribution. Merrill Lynch paid $160 million to a class of black brokers in 2013 and denied any wrongdoing. Wells Fargo settled a class action for $35.5 million earlier this year but didn't agree with the proposed class's claims. MetLife agreed last month to pay $32.5 million in a race discrimination case to about 700 black financial-service representatives without admitting liability.
Allen's lawyers said they hope the suit will encourage other black employees at Goldman to step forward so "we can expose what is really happening behind the closed doors."