Goldman Sachs Loses Sex-Bias Case

NEW YORK - Wall Street's century-old masculine culture suffered a rare and potentially damaging legal blow as a federal jury ruled that Goldman Sachs & Co. had discriminated against a female former vice president.

A jury of five women and four men found yesterday that Goldman, one of the premier investment banks in the world, had wrongfully denied Joanne Flynn promotions, fired her and given her inadequate severance pay because she was a woman.

U.S. District Court Judge Kimba Wood, who presided over what she called "a very close case," heard arguments late yesterday on a Goldman motion to overturn the verdict, and then put off her decision until next week. If she rules against Goldman, the jury is expected to hear evidence on Flynn's request for more than $2 million in damages.

The large Wall Street firms have until now avoided major sex-discrimination verdicts even though only a few of their partners and managing directors - usually less than 10 percent - are women.

Many women have been barred from suing their employers by employment dispute arbitration agreements required of most financial traders. Those firms that have gone to court have often quietly settled their cases.

"A jury was finally able to see how the Street works," said Steven Hyman, one of Flynn's attorneys.

Flynn, 40, who started her own consulting firm after being fired in 1989, spent 20 hours on the stand defending herself against Goldman charges that she had not been a "team player" and had resented her female boss.

She said she was delighted with the verdict. "I have been told by many of my friends in the industry that Wall Street is watching this very carefully," she said. "Hopefully, the industry will become a lot more self-critical."

Although only six of Goldman's 161 partners are female, the bank's officials have said they are aggressively hiring and promoting women. Twenty-two percent of Goldman associates and 21 percent of its vice presidents are now women.

"We are very disappointed that the jury has chosen to view as discrimination what was nothing more than the story of an employee who lost her job through her own conduct," a Goldman spokesman said. "Joanne Flynn was unable to get along with the woman who achieved a position Ms. Flynn wanted, and who became Flynn's boss. That is why Joanne Flynn left Goldman Sachs."