One of three plaintiffs in a putative class action gender discrimination lawsuit against Goldman Sachs & Co., who had signed an arbitration agreement, must go through arbitration, and cannot pursue her case in court, the 2nd U.S. Circuit Court of Appeals has ruled.

When Lisa Parisi joined New York-based Goldman Sachs in 2003, she signed an agreement to bring all “employment-related matters” to arbitration, the appeals court ruled Thursday in Lisa Parisi, Shanna Erlich, H. Christina Chen-Oster v. Goldman Sachs & Co., the Goldman Sachs Group.

However, a lower court had agreed with Ms. Parisi, who was terminated in November 2008, that individual arbitration would preclude her from exercising her right under Title VII of the Civil Rights Act of 1964 to argue there was a pattern or practice of discrimination at Goldman Sachs.

“Parisi recognizes that nongovernment plaintiffs can use the partner-or-practice method only in class actions and argues that she is therefore entitled to pursue a class action in court.” But “private plaintiffs do not have a right to bring a pattern-or-practice claim of discrimination,” the three-judge appeals panel ruled unanimously.

“Ultimately, Parisi must prove to the arbitrators that Goldman Sachs discriminated against her on the basis of sex in violation of Title VII,” the panel ruled. “Consequently, we have little difficulty in concluding, as Goldman Sachs concedes, that in proving her statutory claims, Parisi may offer to the arbitrators evidence of discriminatory patterns, practices or policies at Goldman Sachs that she contends affected her,” the court ruled in remanding the case to the district court.

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Joseph Baumgarten, a partner with law firm Proskauer Rose L.L.P. in New York, which was not involved in the case, said the ruling is significant.

Over the past decade or so, “more and more employers have moved toward alternative dispute resolution mechanisms and policies that preclude class claims, and the problem has been that there's been some uncertainty in the law concerning the extent to which that is going to be enforceable.”

For the 2nd Circuit, the ruling “gives some clarity to the question of what forum we are going to be in, so that an employer can have greater confidence going forward that 'if we implement this kind of policy, it will be enforced,'” Mr. Baumgarten said. “Ultimately, we can expect that the Supreme Court may have to weigh in” on this issue.