Another Open Letter: Lawyer Suing Goldman Sachs Calls For End to Arbitration Requirements

Posted November 12th, 2020.

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The former in-house attorney at Goldman Sachs has alleged that she was fired for trying to provide information to internal investigators in an investigation of the legal department.

By Dan Clark

A tug-of-war over where to litigate a former Goldman Sachs in-house lawyer’s lawsuit against the company has become another instance of lawyers calling for an end to arbitration agreements with their employers.

In an open letter to Goldman Sachs, a former in-house attorney at the firm, who also is suing the company, called on her former employer to end its practice of mandatory arbitration and allow another attorney who settled sexual harassment claims to break her nondisclosure agreement.

In a Thursday post titled “Women Are Being Silenced at Goldman Sachs,” Marla Crawford asked her former employer to release her and all other employees from confidential arbitration and nondisclosure agreements. Such open letters have been published by other clients of Wigdor Law in New York, which is representing Crawford in her complaint against the banking giant.

In October, Crawford filed a complaint against her former employer in New York state court, alleging that she was fired from the company after trying to tell internal investigators about an inappropriate relationship between the head of litigation, Darrell Cafasso, and a junior attorney, only identified as Jane Doe. The junior attorney allegedly settled out of court with Goldman Sachs and signed a nondisclosure agreement.

Goldman Sachs’ attorney, Roberta Kaplan, a partner at Kaplan Hecker & Fink in New York, removed the case to the U.S. District Court for the Southern District of New York and filed a motion to compel arbitration.

In her post, Crawford said, “This is the most draconian form of forum shopping—one which thrusts otherwise public court proceedings behind closed doors before an inherently unfair forum highly likely to be biased in favor of Goldman.”

In an email to Law.com, a representative for Goldman Sachs responded: “Employees choose whether they will enter into an arbitration agreement in exchange for shares of stock at Goldman Sachs, and Ms. Crawford, a seasoned lawyer who understands the terms of this agreement, chose to do so in this case.”

Kaplan, who serves as the lead attorney representing Goldman Sachs, Cafasso and the firm’s general counsel, Karen Seymour, did not immediately respond to a request for comment on Thursday.

Additionally, on Thursday, Crawford’s attorneys, David Gottlieb and Douglas Wigdor, dismissed the suit in federal court and refiled in the New York Supreme Court.

“Forcing victims of discrimination and harassment to arbitrate claims in a secretive forum is wrong. Period. Ms. Kaplan surely knows this as co-founder of the Time’s Up Legal Defense Fund, which is why it is so disappointing that she would agree to take such an anti-#MeToo position on Goldman’s behalf,” Wigdor and Gottlieb said in a joint statement on Thursday.

In the wake of the #MeToo movement, many companies have banned the use of mandatory arbitration policies for victims of sexual harassment. In the open letter, Crawford mentioned that several organizations, including Wells Fargo, Uber, Google, Facebook, Lyft, Slack, Airbnb, Skadden Arps Slate Meagher & Flom, Sidley Austin, Kirkland & Ellis and Orrick Herrington & Sutcliffe, have banned forced arbitration.

“Arbitration agreements are largely detrimental to employees and may often act to shield employer misconduct from scrutiny and accountability,” said Andrew Melzer, a partner at Sanford Heisler Sharp in New York who is not involved in the Goldman Sachs case. “This is particularly pronounced in the context of sexual harassment. Many employers have recently disavowed the use of mandatory arbitration agreements, which we view as a welcomed trend.”

Kalpana Kotagal, a partner at Cohen Milstein Sellers & Toll in Washington, D.C., who is also not involved in the case, said NDAs and mandatory arbitration are primarily used for “masking or concealing settlements that relate to sexual harassment.”

“The biggest challenge to them is the way they can be used to mask patterns of harassment and relatedly other types of discrimination and can be used to protect high-powered perpetrators,” Kotagal said.

However, victims can get one important benefit from an NDA, she noted. Keeping the dispute from becoming public can allow them to protect their identity and move on with their life, Kotagal said.

Still, she said putting sexual harassment claims into arbitration takes the public eye away from those claims.

“That combination of taking things out of court and also wrapping in a prohibition on pursuing a class action has two layers of inhibiting victims from knowing about each other, from coming forward together and from litigating their claims together in a way that might lead to greater scrutiny of the company’s practices,” Kotagal said.

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