Court Holds Class Plaintiff’s Claims Not Subject To Arbitration

Court Holds Class Plaintiff’s Claims Not Subject To Arbitration

July 7, 2011 – Lieff Cabraser serves with the firm Outten & Golden as Co-Lead Counsel for plaintiffs in a gender discrimination class action lawsuit against Goldman Sachs. The complaint alleges that Goldman Sachs has engaged in systemic and pervasive discrimination against its female professional employees in violation of Title VII of the Civil Rights Act of 1964 and the New York City Human Rights Law.

On April 28, 2011, U.S. District Court Judge James C. Francis IV denied defendants’ motion to stay the case and compel arbitration of the claims of one of the named plaintiffs, Lisa Parisi, who allegedly had entered into an employment agreement with an arbitration clause silent as to class actions. The Court found:

“Ms. Parisi’s individual claims are subject to an arbitration clause signed as part of her employment agreement, and, pursuant to that agreement, Goldman Sachs cannot be required to arbitrate on a class basis. However, because an arbitration clause may not be enforced if it precludes the vindication of substantive rights, and because a pattern or practice claim under Title VII can only be brought in the context of a class action, Ms. Parisi’s Title VII claim cannot be committed to arbitration lest she be deprived of her substantive rights.”

The Court’s order was issued one day after the U.S. Supreme Court opinion in AT&T Mobility LLC v. Concepcion, 563 U.S. __, 131 S. Ct. 1740 (2011) which held that the Federal Arbitration Act (FAA) superseded a state law per se prohibition of a class action waiver in a consumer arbitration agreement. On the basis of Concepcion, Goldman Sachs moved for reconsideration of the order denying its motion to compel arbitration.

On July 7, 2011, the Court denied the motion for reconsideration, observing that:

“In this case, the plaintiff would be foreclosed from bringing her pattern or practice claim not only by the practicality of economic pressures limiting the value of her claim compared with the cost of prosecuting it, but also by the actuality of federal case law interpreting Title VII. To the extent that she has a substantive right under Title VII to bring a pattern or practice claim rather than an individual disparate impact claim, she would be precluded from enforcing that right by the arbitration clause in her employment contract.”

The parties are now continuing the process of discovery in preparation for the class certification briefing phase. No trial date has been set by the Court.