Goldman Sachs faces $1.1m lawsuit over alleged "dysfunctional" work environment

Goldman Sachs faces $1.1m lawsuit over alleged "dysfunctional" work environment

Goldman Sachs (NYSE: GS ) is facing legal action from a former executive, Ian Dodd, who is suing the bank for approximately $1.1 million, alleging a "dysfunctional" work environment that led to mental health issues. The suit was filed in the High Court of London on Wednesday, September 6, 2023.

Dodd, who worked as the head of global recruiting at GS International from November 2018 until his departure in 2021, alleges a "culture of bullying" and "culture of divisiveness" at the bank. He claims he was made to "work excessive hours," which often resulted in him "sobbing through meetings."

The former executive also states he fell ill in 2019 before leaving in 2021, although the documents do not specify whether his illness was physical or mental. Goldman Sachs has denied these allegations, stating that Dodd was "provided with appropriate reasonable advice and support" and that the bank was unaware of his illness.

"We believe these claims are completely without merit," Goldman Sachs said in a statement to the Financial Times.

Dodd's allegations also include claims that comments such as “take that as your first punch in the face” or references to staff members receiving a “slap” or “punch” were condoned at Goldman Sachs. The bank has denied all these accusations and filed a detailed defense at the High Court.

In its defense document, Goldman Sachs argues that any pressure Dodd felt was self-generated: “If he did work excessive hours, this was not because it was required or expected of him,” it stated. The bank also denied it “knew or ought to have known that the Claimant was becoming unwell.”

The lawsuit comes amid increased scrutiny of Goldman Sachs's working environment. In August, reports surfaced that Goldman Sachs was tightening its in-office mandate and ensuring employees were coming into the office five days a week, despite efforts to lengthen summer holidays and vacations by working remotely.

This lawsuit follows a difficult Q2 2023 for Goldman Sachs, which saw the bank suffer a profit loss of more than 58%, marking its worst quarterly loss since 2020. As of Wednesday afternoon, Goldman Sachs shares were down just under 1.7% year-over-year.

This isn't the first time Goldman Sachs has faced allegations of a demanding workplace culture. In 2021, junior bankers reportedly requested to work just 80 hours a week after a survey highlighted how intense expectations were leading to mental health issues among staff.

A case management hearing for Dodd's lawsuit has been scheduled for December.

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