The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
Diane Offereins, )
)
Plaintiff, )
) Case No. 24-CV-8032
v. )
) Honorable Joan B. Gottschall
Discover Financial Services, )
)
Defendant. )
MEMORANDUM OPINION AND ORDER
Defendant Discover Financial Services (“Discover”) moves under Federal Rule of Civil
Procedure 12(b)(6) to dismiss plaintiff Diane Offereins’ six‐count complaint for failure to state a
claim upon which relief can be granted. For the reasons discussed herein, the motion is denied.
I. Rule 12(b)(6) Standard
Discover’s Rule 12(b)(6) motion tests the complaint’s sufficiency under federal pleading
standards, not the merits of the case. See Skinner v. Switzer, 562 U.S. 521, 529‒30 (2011)
(citations omitted). Rule 8(a)(2) requires a complaint to set forth “a short and plain statement of
the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To survive a
Rule 12(b)(6) motion, a complaint must “state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)). A complaint satisfies this standard when its factual allegations “raise a right to
relief above the speculative level.” Twombly, 550 U.S. at 555 (citations omitted).
On a Rule 12(b)(6) motion, the court must “accept all well-pleaded facts from the
[complaint] as true and view them in the light most favorable to the plaintiff.” Demkovich v.
St. Andrew the Apostle Parish, Calumet City, 3 F.4th 968, 973 n.2 (7th Cir. 2021) (en banc)
(citing White v. United Airlines, Inc., 987 F.3d 616, 620 (7th Cir. 2021)). This principle “is
inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 555).
II. The Complaint
The court recites the complaint’s allegations in accordance with the Rule 12(b)(6)
standard—without vouching for the veracity of the complaint’s allegations. Offereins, a woman,
began her career with Discover in 1998 as its Chief Information Officer and served as the head of
Discover’s Global Payments Network from 2009 until her retirement in 2023. See Compl.
¶¶ 23–29, Dkt. No. 1. A trade publication, American Banker, named Offereins one of the most
powerful women in finance in each of those fifteen years. Compl. ¶ 35. When she announced
her retirement in March 2023, Discover issued a press release applauding her many
accomplishments, stating that she “helped lead Discover’s transition to an independent, publicly
traded company in 2007 and its acquisition of PULSE and Diners Club International.” Compl.
¶ 33 (quoting press release; no citation provided). Discover’s payments business also created an
annual award given to its partner of the year and named the award in Offereins’ honor. Compl.
¶ 36.
A. Discover’s Incentive Compensation Plan
This litigation concerns certain incentives under Discover’s Amended and Restated 2014
Omnibus Incentive Plan (“the plan”) administered by the Compensation and Leadership
Committee of Discover’s board of directors (“the committee”). See Compl. ¶¶ 37–38. Like
other Discover executives, approximately sixty percent of Offereins’ compensation came in the
form of stock incentives under the plan. See Compl. ¶ 80.
The plan authorized the committee, in its sole discretion, to select employees for awards
for Performance Stock Units (PSUs) and Restricted Stock Units (RSUs). Compl. ¶ 38. An RSU
gives the employee the right, under specified conditions, to receive a specified number of shares
of Discover’s common stock. Compl. ¶¶ 38–39. PSUs are a subspecies of RSU based on a
multiplier tied to Discover’s performance on specified benchmarks. See Compl. ¶ 39.
The committee awarded Offereins RSUs and PSUs in 2021, 2022, and 2023. See Compl.
¶¶ 40–44. The certificates accompanying these RSUs and PSUs included, among other clauses,
a “Risk Review” provision. See Compl. ¶¶ 45–47. According to the language of the Risk
Review provision of the Award Certificates, the Company has two levels of discretion in
deciding to cancel equity awards. “First, the Chief Risk Officer must ‘determine whether [the
employee] engaged in any willful or reckless violation of the Company’s risk policies.’ After
that determination is made, ‘then the Company may determine that all or a portion of [the
employee’s RSUs/PSUs] will be forfeited.’ ” Compl. ¶ 47 (alterations and emphasis in the
complaint) (quoting language and alleging that all certificates contained materially similar
language).
B. Credit Card Misclassification Investigation and Cancellation of Incentive Compensation
During the first quarter of 2023, Discover launched an investigation, dubbed “Project
Simple,” into misclassification of certain credit cards issued to individuals as commercial cards.
See Compl. ¶ 51–52. Merchants paid outsized fees for the misclassified cards. Compl. ¶ 52.
Discover received “substantial external pressure” regarding the misclassification issue. Id.
Offereins did not oversee the portion of Discover’s business that issued the misclassified credit
cards; she was responsible for the portion of Discover’s business that processed payments.
Compl. ¶ 53. The misclassification “was well-known to Discover’s senior management for many
years,” and although Offereins “made proactive efforts to address the [misclassification] issue,”
doing so “was clearly beyond the scope of her duties on the payments network side, as it was
Discover’s card issuance business that made decisions on how to categorize newly-issued cards.”
Compl. ¶ 54–55.
Offereins “cooperated fully” with the investigation. Compl. ¶ 61. Within a month after
she retired, Offereins sat for a three-hour interview with Discover’s outside counsel on July 9,
2023. Compl. ¶ 51. Offereins heard nothing further from Discover about the interview, the
investigation’s outcome, or the impact it would have on her compensation. See Compl. ¶ 61.
On January 2, 2024, one day before her first set of RSUs and PSUs was scheduled to
vest, Offereins received a letter from Discover informing her that an investigative hold had been
placed on all of her unvested RSUs and PSUs. See Compl. ¶¶ 50, 63–67. The letter referred to
the ongoing investigation of the misclassification issue and invoked the Risk Review provision.
Compl. ¶ 64. Offereins heard nothing more about the review from Discover until she received a
letter dated January 31, 2024. Compl. ¶¶ 66–67. The letter stated that all of Offereins’
outstanding awards were forfeited because “A risk review was conducted in connection with the
Company’s card misclassification matter, and the Chief Risk Officer concluded that [Offereins]
engaged in willful or reckless violation of the Company’s risk policies.” Compl. ¶¶ 66.
“Discover provided no evidence or explanation to support the Chief Risk Officer’s
determination that Ms. Offereins engaged in any ‘willful or reckless violation of the Company’s
risk policies.’ Nor did the Company explain [another committee]’s subsequent decision to cease
all of Ms. Offereins’ unvested equity.” Compl. ¶ 67; see also Compl. ¶¶ 68 –69. Offereins
alleges that Discover “perverted the risk review process” because she “was an easy target for the
risk review: she had recently retired and could not quit in protest or otherwise fight back against
a baseless determination that she had acted willfully or recklessly.” Compl. ¶¶ 71, 76; see
Compl. ¶¶ 70–76. She estimates that, in all, Discover effectively deprived her of compensation
worth more than $7 million. See Compl. ¶¶ 77–79; Resp. to Mot. to Dismiss 1, Dkt. No. 30
(estimating current value as more than $8 million).
C. Differential Discipline and Claims for Relief
The complaint identifies four male executives, all younger than Offereins, whom
Discover allegedly treated more favorably, despite their greater responsibility for the credit card
misclassification at the heart of Project Simple. See Compl. ¶¶ 81–89. First, Discover’s board
forced its then-Chief Executive Officer (CEO) Roger Hochschild to resign in August 2023. See
Compl. ¶¶ 81. But Discover denied Hochschild only one year of incentive compensation and
employed him until the end of 2023 as an advisor to the chair of its board. See Compl. ¶¶ 81–82
(certain allegations made on information and belief). The second younger male executive is Dan
Capozzi, who served as Executive President for U.S. Cards beginning in 2020. Compl. ¶ 53. In
that role, Capozzi and his predecessor oversaw the issuance of U.S. credit cards and, according
to the complaint, bore responsibility for misclassifying cards. See Compl. ¶¶ 53–54. Capozzi
“did not lose any equity awards as a result of the Project Simple investigation, based on a review
of Discover’s most recent comprehensive proxy filing.” Compl. ¶¶ 85. Discover disciplined
Capozzi by reducing his $1.5 million cash bonus in 2023 to $150,000. Compl. ¶ 87.
In addition, Offereins pleads as follows:
88. Mr. Hochschild and Mr. Capozzi are far from alone. As mentioned
previously, the Company asked Mr. Eichfeld, the Chief Human Resources
Officer, to leave within the last year. Mr. Eichfeld was given a severance
package that allowed him to leave with all of his equity and an additional
two years of pay. And Carlos Minetti, the President of Discover’s
Consumer Banking division until 2023, was given the same exit package as
Mr. Eichfeld, despite a long‐running government investigation into
Discover’s student loan business (overseen by Mr. Minetti).
89. It is no coincidence that Ms. Offereins—on information and belief both
the only woman and only retired executive committee member to lose
equity as a result of Project Simple—lost by far the largest percentage of
her equity of any adversely affected employee. There is no
non-discriminatory explanation for Ms. Offereins experiencing a larger
proportional cancellation of her equity compensation than Mr. Hochschild
and Mr. Capozzi.
Compl. ¶¶ 88–89.
Offereins, who was sixty-six years old when she filed her complaint, brings claims of age
and gender discrimination under Title VII of the Civil Rights Act of 1964, as amended
(“Title VII”), 42 U.S.C. § 2000e et seq.; the Age Discrimination in Employment Act of 1976, as
amended (“ADEA”), 29 U.S.C. §§ 621 et seq.; the Equal Pay Act of 1963 (“EPA”), 29 U.S.C.
§ 206; and the Illinois Human Rights Act, (“IHRA”),775 Ill. Comp. Stat. 5/101 et seq. Count I of
the complaint asserts a breach of contract claim. Specifically, Offereins pleads that Discover
breached the implied covenant of good faith and fair dealing when it denied her unvested
incentives and bonuses. See Compl. ¶¶ 90–102.
III. Analysis
Discover makes four arguments for dismissal. See Mem. Supp. Mot. to Dismiss 1–2,
Dkt. No. 22. Discover first contends that the complaint fails to state a plausible claim of sex
discrimination under Title VII and the IHRA because Offereins does not plausibly allege that
“her loss of equity was in any way tied to gender animus.” Id. at 2. Discover advances an
analogous argument concerning Offereins’ claim of age discrimination. See id. Second,
Discover contends that Supreme Court precedent forecloses Offereins’ attempt to use retirement
eligibility as a proxy for age discrimination in violation of the ADEA. See id. Third, Discover
maintains that the EPA guarantee of “equal pay for equal work” does not encompass Offereins’
claim of discrimination in awarding stock incentive compensation. See id. And fourth, Discover
seeks dismissal of Offereins’ breach of contract claim because the RSU and PSU certificates in
question reserved to Discover sole discretion to determine whether to award RSUs and PSUs.
Id. at 4. The court considers each argument in turn.
A. Sex Discrimination Claims
Under Title VII of the Civil Rights Act of 1964, an employer may not “fail or refuse to
hire or to discharge any individual, or otherwise to discriminate against any individual with
respect to his compensation, terms, conditions, or privileges of employment, because of such
individual's race, color, religion, sex, or national origin.” 42 U.S.C. § 2000e‑2(a)(1). The ADEA
employs similar language to prohibit an employer from discriminating against an employee or
job applicant “because of [the] individual's age.” 29 U.S.C. § 623(a)(1). Stated plainly, these
statutes target “practices that ‘treat a person worse’ because of sex or other protected trait.”
Muldrow v. City of St. Louis, 601 U.S. 346, 353 (2024) (citation modified) (quoting Bostock v.
Clayton Cnty., 590 U.S. 644, 658 (2020)); see Arnold v. United Airlines, Inc., 142 F.4th 460,
470 & n.22 (7th Cir. 2025).
The IHRA’s purposes are similar to, and broader than, Title VII and the ADEA. See
Blount v. Stroud, 904 N.E.2d 1, 6–7 (Ill. 2009). “The [IHRA], adopted in 1979, is intended to
secure for all individuals in Illinois freedom from unlawful discrimination in connection with
employment, real estate transactions, access to financial credit, and availability of public
accommodations.” Id. at 6 (quotation omitted). “Illinois courts apply the federal Title VII
framework to IHRA claims.” Volling v. Kurtz Paramedic Servs., Inc., 840 F.3d 378, 383 (7th Cir.
2016) (citing Rabé v. United Air Lines, Inc., 971 F. Supp. 2d 807, 821 (N.D. Ill. 2013)); see
Taylor v. CDW Logistics, Inc., 2015 IL App (2d) 140282‑U, ¶ 67. The parties here identify no
differences between the IHRA on one hand and Title VII and the ADEA on the other affecting
Offereins’ claims. Accordingly, her Title VII, ADEA, and IHRA claims will be analyzed
together.
Both sides reference the McDonnell-Douglas burden-shifting framework in their briefing,
and both cite cases applying the framework. The McDonnell-Douglas framework, named for
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), provides one avenue by which
evidence may be organized, presented, and analyzed at summary judgment (ordinarily after
discovery) in employment discrimination and retaliation cases. See generally Arnold, 142 F.4th
at 469–70; Ortiz v. Werner Enters., Inc., 834 F.3d 760 (7th Cir. 2016). Under the
McDonnell-Douglas framework:
[T]he plaintiff first must make out a prima facie case of discrimination by
demonstrating that (1) she is a member of the protected class . . . ; (2) she
performed her job to her employer's legitimate expectations; (3) she
suffered an adverse employment action; and (4) one or more similarly
situated individuals outside her protected class received better treatment.
Arnold, 142 F.4th at 469–70 (citing Brooks v. Avancez, 39 F.4th 424, 434 (7th Cir. 2022)). If the
plaintiff makes out a prima facie case, the burden shifts at step two to the employer to “articulate
a legitimate, nondiscriminatory reason for the adverse employment action.” Id. at 470 (quoting
Tyburski v. City of Chicago, 964 F.3d 590, 598 (7th Cir. 2020)). Last, the third
McDonnell-Douglas step shifts the burden back to the plaintiff to “demonstrate that the
defendant's proffered reason is pretextual.” Id. (quotation omitted).
Discover argues that Offereins has “pleaded herself out of court” because two of the male
executives referenced in her complaint are not similarly situated to her. Discover relies for
support on cases applying the McDonnell-Douglas framework and considering proposed
comparators who were similarly situated to the plaintiff. See Mem. Supp. Mot. to Dismiss 10–
12, Dkt. No. 22. These arguments fail first because they do not mention the executive
comparators in ¶ 88 of the complaint and second because Discover fails meaningfully to engage
with the federal notice pleading standard. See id. It is unnecessary to compare and contrast
Offereins with the male executives mentioned in her complaint at the pleading stage because
even the more demanding pleading requirements under Iqbal and Twombly do not require a
plaintiff to identify specific comparators in a complaint. See Hess v. Garcia, 72 F.4th 753, 761
(7th Cir. 2023) (quoting Geinosky v. City of Chicago, 675 F.3d 743, 748 n.3 (7th Cir. 2012)); see
generally Swierkiewicz v. Sorema N.A., 534 U.S. 506, 510–13 (2002) (explaining that a plaintiff
need not plead a prima facie case in her complaint).
“A plaintiff need not allege all of the elements of a prima facie case of discrimination.”
Parker v. Ill. Hum. Rts. Comm'n, 2013 WL 5799125, at *4 (N.D. Ill. Oct. 25, 2013)
(Gottschall, J.) (citing Tamayo v. Blagojevich, 526 F.3d 1074, 1084 (7th Cir. 2008)). Instead, “a
plaintiff must advance plausible allegations that she experienced discrimination because of her
protected characteristics” at the pleading stage. Kaminski v. Elite Staffing, Inc., 23 F.4th 774,
776 (7th Cir. 2022) (citing Graham v. Bd. of Educ., 8 F.4th 625, 627 (7th Cir. 2021)). By way of
illustration, the plaintiff in Kaminski pleaded in her complaint at “a high level of generality” that
her former employer terminated her because of her age, sex, and national origin. Id. Quoting its
decision in Doe v. Columbia College Chicago, 933 F.3d 849, 855 (7th Cir. 2019), the Seventh
Circuit explained that such high-level allegations do not, without more, cross the plausibility
threshold: “a plaintiff asserting a discrimination claim ‘cannot rely on . . . generalized allegations
alone, however, but must combine them with facts particular to his case to survive a motion to
dismiss.’ ” Id.; see Kaminski, 23 F.4th at 776–77; Parker, 2013 WL 5799125, at *4.
Offereins’ complaint goes beyond the formulaic recitation of the elements of a
discrimination claim held to be insufficient in cases like Kaminski. Offereins alleges that
Discover singled her out and disciplined her more harshly than younger men who bore more
responsibility for the card misclassification matter. See Compl. ¶¶ 51–89. Case-specific facts
are alleged that, when viewed favorably to Offereins, tie Discover’s disparate treatment to her
sex. Specifically, Offereins plausibly pleads that Discover viewed her as a convenient scapegoat
because, as a woman who had reached retirement age, Discover believed that it was considerably
harder for her to “fight back” than it would have been for her younger, male colleagues. Compl.
¶ 71. Nor do, as Discover contends, the complaint’s allegations that Discover praised Offereins’
accomplishments as a pathbreaking businesswoman when she retired render an inference of
discrimination implausible. See Compl. ¶¶ 33–34. Viewed favorably to Offereins, these
allegations modestly bolster her discrimination claims inasmuch as they can be viewed as
Discover’s tacit acknowledgment of the hurdles women in the finance industry continue to face.
See Compl. ¶¶ 33–35. Considering the complaint’s allegations in their totality, Offereins states
plausible claims for intentional discrimination made actionable by Title VII and the IHRA.
B. Age Discrimination Claim: Retirement Eligibility as Proxy for Age
Citing Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993), Discover argues that the
complaint fails to state a claim of age discrimination because Offereins relies on her retirement
status as a proxy for prohibited age discrimination. Mem. Supp. Mot. to Dismiss 12–13, Dkt.
No. 22. “Congress enacted the ADEA in 1967 to ‘promote employment of older persons based
on their ability rather than age; to prohibit arbitrary age discrimination in employment; and to
help employers and workers find ways of meeting problems arising from the impact of age on
employment.’ ” Carson v. Lake Cnty., Ind., 865 F.3d 526, 532 (7th Cir. 2017) (citation modified)
(quoting 29 U.S.C. § 621(b)). The ADEA’s anti-discrimination provision reads:
It shall be unlawful for an employer--
(1) to fail or refuse to hire or to discharge any individual or otherwise
discriminate against any individual with respect to his compensation, terms,
conditions, or privileges of employment, because of such individual's age;
(2) to limit, segregate, or classify his employees in any way which would
deprive or tend to deprive any individual of employment opportunities or
otherwise adversely affect his status as an employee, because of such
individual's age; or
(3) to reduce the wage rate of any employee in order to comply with this
chapter.
29 U.S.C. § 623(a).
Discover quotes the following passage from the Supreme Court’s decision in Hazen
Paper: “When the employer's decision is wholly motivated by factors other than age, the
problem of inaccurate and stigmatizing stereotypes disappears. This is true even if the
motivating factor is correlated with age, as pension status typically is.” 507 U.S. at 611. The
Hazen Paper Court made clear, however, that “typically” means just what it says. See id. at 612–
13. “We do not preclude the possibility that an employer who targets employees with a
particular pension status on the assumption that these employees are likely to be older thereby
engages in age discrimination. Pension status may be a proxy for age, not in the sense that the
ADEA makes the two factors equivalent, but in the sense that the employer may suppose a
correlation between the two factors and act accordingly.” Id. (citation modified). The Court
subsequently confirmed in Kentucky Retirement System v. E.E.O.C., 554 U.S. 135, 142 (2008),
that “Hazen Paper indicated that discrimination on the basis of pension status could sometimes
be unlawful under the ADEA, in particular where pension status served as a proxy for age.” Id.
(internal quotation omitted).
Offereins alleges discrimination based on the fact that she had retired, and that Discover
used this as a proxy for her age. Neither party cites a case in which the employer allegedly used
the fact that an employee had retired (as contrasted with being eligible to retire) as a proxy for
age discrimination. See Mem. Supp. Mot. to Dismiss 12–13; Mem. Opp’n Mot. to Dismiss 7–9,
Dkt. No. 30. Such cases appear to be uncommon. The Seventh Circuit has held that claims of
age “discrimination based on an economic factor closely correlated with age” is actionable and
“should be examined on a case-by-case basis.” Wheeldon v. Monon Corp., 946 F.2d 533, 536
(7th Cir. 1991); see, e.g., Adams v. Ameritech Servs., Inc., 231 F.3d 414, 428 (7th Cir. 2000)
(summary judgment opinion). In view of the fact‐intensive inquiry required, the parties’ failure
to cite pertinent authority, and the close correlation between retirement and age, the court
declines to dismiss plaintiff’s age discrimination claims at the pleading stage before a complete
factual record is developed through discovery. Cf. Kahler v. Peters, 2007 WL 551612, at *6
(D. Minn. Feb. 21, 2007).
C. Equal Pay Act Claim
Discover raises two arguments in support of dismissing the complaint’s EPA claim. With
specified exceptions, the EPA forbids a covered employer to:
discriminate, within any establishment . . . between employees on the basis
of sex by paying wages to employees in such establishment at a rate less
than the rate at which he pays wages to employees of the opposite sex in
such establishment for equal work on jobs the performance of which
requires equal skill, effort, and responsibility, and which are performed
under similar working conditions.
29 U.S.C.§ 206(d); see generally Varner v. Ill. State Univ., 226 F.3d 927, 932 (7th Cir. 2000)
(discussing exceptions).
An EPA plaintiff bears the initial burden to “show that an employer pays different wages
to employees of opposite sexes for equal work on jobs the performance of which requires equal
skill, effort, and responsibility, and which are performed under similar working conditions.”
Corning Glass Works v. Brennan, 417 U.S. 188, 195 (1974) (internal quotations omitted). Once
the plaintiff makes that showing, “the burden shifts to the employer to show that the differential
is justified under one of the [EPA’s] four exceptions.” 1 Id. at 196; accord Wollenburg v. Comtech
Mfg. Co., 201 F.3d 973, 976 (7th Cir. 2000).
Discover first argues that the discretionary incentive compensation decisions at issue here
do not constitute payment of wages as the EPA uses that phrase. 29 U.S.C. § 206(d). Discover
cites no case construing the EPA in this cramped manner. See Mem. Supp. Mot. to Dismiss 7–9.
For support, Discover relies on the broad pronouncement in Corning Glass that Congress
————————————————————
1. The EPA’s four exceptions preclude liability “where such payment is made pursuant to (i) a seniority
system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production;
or (iv) a differential based on any other factor other than sex.” 29 U.S.C. § 206(d)(1).
adopted the EPA predicated on the principle that “equal work will be rewarded by equal wages.”
See id.; see also Corning Glass, 417 U.S. at 195. The preceding sentence of the Corning Glass
opinion speaks in broader terms, however:
Congress’ purpose in enacting the Equal Pay Act was to remedy what was
perceived to be a serious and endemic problem of employment
discrimination in private industry—the fact that the wage structure of
“many segments of American industry has been based on an ancient but
outmoded belief that a man, because of his role in society, should be paid
more than a woman even though his duties are the same.”
Corning Glass, 417 U.S. at 195.
Consistent with the EPA’s “broad remedial purpose,” Ende v. Board of Regents of
Regency Universities, 757 F.2d 176, 183 (7th Cir. 1985), the EPA’s implementing regulations
define “wages” in the following manner:
Under the EPA, the term “wages” generally includes all payments made to
[or on behalf of] an employee as remuneration for employment. The term
includes all forms of compensation irrespective of the time of payment,
whether paid periodically or deferred until a later date, and whether called
wages, salary, profit sharing, expense account, monthly minimum, bonus,
uniform cleaning allowance, hotel accommodations, use of company car,
gasoline allowance, or some other name. Fringe benefits are deemed to be
remuneration for employment.
29 C.F.R. § 1620.10; see id. (further defining the term “wages”). The next section of the
regulations adds, “ ‘Fringe benefits’ includes, e.g., such terms as medical, hospital, accident, life
insurance and retirement benefits; profit sharing and bonus plans; leave; and other such
concepts.” 29 C.F.R. § 1620.11(a).
The complaint here alleges that more than sixty percent of Offereins’ compensation came
from incentives and bonuses. Compl. ¶ 80. It is reasonable to infer that discretionary incentives
comprised a similar proportion of the compensation paid to male Discover executives listed in
the complaint. See Compl. ¶¶ 81–89. Under the EPA’s implementing regulations, which accord
with the text and purpose of the statute, the incentive compensation decisions listed in the
complaint fall within the EPA’s definition of payment of wages. 29 U.S.C. § 206(d)(1).
Discover’s second argument is that Offereins has not pleaded a plausible claim that she
and the four male executives named in her complaint performed sufficiently similar work to state
an EPA claim. In making this argument, Discover points to allegations in the complaint to the
effect in which Offereins differentiates her role and power to address the misclassification matter
from that of the company’s CEO and Capozzi, who is alleged to have had the power, by dint of
his title and area of responsibility, to address the misclassification issue. See Compl. ¶¶ 81–89.
Discover says that these allegations show that Offereins and the male executives were not
performing substantially similar work. See Mem. Supp. Mot. to Dismiss 8–9.
At summary judgment and at trial, an EPA “plaintiff must establish that the positions [of
her and her comparators] entail substantially equal tasks, performed under similar conditions.
(The Act just says “equal,” but . . . ‘equal’ does not mean ‘identical’; otherwise the employer
could defeat an Equal Pay Act suit by adding an inconsequential and pointless chore to one of the
jobs.” Lang v. Kohl's Food Stores, Inc., 217 F.3d 919, 923 (7th Cir. 2000). Neither party has
engaged with this standard as it pertains to the complaint here. Rather, they focus on the relative
culpability of Discover executives for the card certification matter. As Discover has framed it, its
arguments turn the complaint’s allegations on their head and invite the court to ignore the rule
that the complaint must be construed in the light most favorable to the plaintiff on a
Rule 12(b)(6) motion. See Iqbal, supra, 556 U.S. at 678. Taken favorably to Offereins in
context, the point being made in the complaint is that Discover regarded Offereins and the male
executives as substantially similar for purposes of assessing their involvement in, and culpability
for, the misclassification matter, yet Discover withheld substantively more incentive
compensation from Offereins than it did its CEO, Capozzi, and the two other male executives it
disciplined. See Compl. ¶¶ 81–89. At the pleading stage, that is enough to state an EPA claim.
D. Breach of Contract Claim
Count I of the complaint asserts a claim that Discover breached the covenant of good
faith and fair dealing. See Compl. ¶¶ 90–102. Specifically, Offereins pleads that she “had a
reasonable expectation at the time she executed the Plan and Award Certificates that (1) the
Company would not make a determination that she engaged in ‘willful or reckless violations of
the Company’s risk policies’ in bad faith, and (2) that the Company would not decide to cancel
her RSU and PSU awards in bad faith.” Compl. ¶ 99.
Discover’s 2014 compensation plan contains a choice of law clause in favor of Delaware
law. See Mem. Supp. Mot. to Dismiss 13–15. “Illinois courts respect a contract’s choice-of-law
clause as long as the contract is valid and the law chosen is not contrary to Illinois’ fundamental
public policy.” Sosa v. Onfido, Inc., 8 F.4th 631, 638 (7th Cir. 2021) (citation modified).
Offereins does not disagree that Delaware’s law governs her breach of contract claim. See Resp.
to Mot. to Dismiss 12–15, Dkt. No. 30. In the absence of any argument contesting choice of law,
the court applies Delaware law to Offereins’ breach of contract claim.
“Under Delaware law, a breach of contract claim comprises three elements: (1) the
existence of a contract; (2) a breach of an obligation imposed by that contract; and (3) resultant
damages.” Walker v. FRP Invs. GP, LLC, 336 A.3d 542, 562 (Del. Ch. 2025) (quoting
Wenske v. Blue Bell Creameries, Inc., 2018 WL 3337531, at *9 (Del. Ch. July 6, 2018)).
In 2018, the Seventh Circuit summarized Delaware law concerning the implied covenant of good
faith and fair dealing as follows:
Delaware recognizes a claim for the breach of the implied covenant of good
faith and fair dealing in limited circumstances. The implied covenant
requires “ ‘a party in a contractual relationship to refrain from arbitrary or
unreasonable conduct which has the effect of preventing the other party to
the contract from receiving the fruits' of the bargain.” Dunlap v. State Farm
Fire & Cas. Ins. Co., 878 A.2d 434, 442 (Del. 2005), (quoting Wilgus v. Salt
Pond Inv. Co., 498 A.2d 151, 159 (Del. Ch. 1985). The covenant implies
terms in an agreement to fill gaps or to account for unanticipated
developments. Id.
The implied covenant cannot modify the express language of the parties’
agreement, so a party generally may not base a claim of a breach of the
implied covenant on conduct authorized by the terms of an agreement. Id.
“Under Delaware law, a court confronting an implied covenant claim asks
whether it is clear from what was expressly agreed upon that the parties who
negotiated the express terms of the contract would have agreed to proscribe
the act later complained of as a breach of the implied covenant of good
faith—had they thought to negotiate with respect to that matter.” Gerber v.
Enter. Prods. Holdings, LLC, 67 A.3d 400, 418 (Del. 2013), overruled on
other grounds by Winshall v. Viacom Int'l Inc., 76 A.3d 808 (Del. 2013).
Finding a breach of the implied covenant “should be a rare and fact-
intensive exercise, governed solely by issues of compelling fairness.”
Dunlap, 878 A.2d at 442 (citation modified).
Life Plans, Inc. v. Sec. Life of Denver Ins. Co., 800 F.3d 343, 355–56 (7th Cir. 2015).
Discover argues that it owed Offereins no duty of good faith and fair dealing because the
RSU and PSU certificates expressly authorized Discover to forfeit all or part of Offereins’
incentive compensation upon finding, as it did, that she had violated Discover’s Risk Review
rules. This argument rests on a mischaracterization of Offereins’ breach of contract claim. There
is no dispute that Discover had the contractual authorization to withhold incentive compensation
after making certain factual findings. See Compl. ¶¶ 43–50.
The essence of Offereins’ breach of contract claim consists of her challenge to how
Discover wielded its contractual discretion to make findings about, and mete out consequences
to, its executives. As the Delaware Supreme Court recently reiterated, “When a contract confers
discretion on one party, the implied covenant [of good faith and fair dealing] requires that the
discretion be used reasonably and in good faith.” Terrell v. Kiromic Biopharma, Inc., 297 A.3d
610, 620 n.37 (Del. 2023) (citation modified). The duty extends beyond decisions about
consequences: “[I]f one party is given discretion if in determining whether a condition in fact has
occurred, then that party must use good faith in making the determination.” Baldwin v. New
Wood Res. LLC, 283 A.3d 1099, 1116 (Del. 2022) (quoting Wilmington Leasing, Inc. v. Parrish
Leasing Co., L.P., 1996 WL 560190, at *2 (Del. Ch. Sept. 25, 1996) (other citations omitted).
Indeed, the Delaware Supreme Court has stated that contractual language “vesting . . . a Board
[of directors] with discretion does not relieve the Board of its obligation to use that discretion
consistently with the implied covenant of good faith and fair dealing.” Oxbow Carbon &
Minerals Holdings, Inc. v. Crestview‐Oxbow Acquisition, LLC, 202 A.3d 482, 503–04 & n.92
(Del. 2019) (collecting citations).
Applying the foregoing rules and principles, the Delaware Court of Chancery held in
Smith v. Scott that a fired executive’s complaint stated a claim against his former employers for
breach of the duty of good faith and fair dealing. Smith v. Scott, 2021 WL 1592463, at *7–8
(Del. Ch. Apr. 23, 2021). The plaintiff in Smith alleged plausibly that his former employers
“purport[ed] to fire [the plaintiff] for cause when, in fact, their sole motivation was to take his
Vested Interests without compensation.” Smith, 2021 WL 1592463, at *7 (citing and discussing
Sheehan v. AssuredPartners, Inc., 2020 WL 2838575, at *6–7 (Del. Ch. May 29, 2020)).
Offereins’ complaint here states a stronger claim, for it pleads plausibly that Discover withheld
more than $7 million in compensation from Offereins for reasons that were not only in bad faith
but were also illegal under federal and state anti-discrimination laws. Specifically, Offereins
alleges that Discover “perverted” its contractual discretion to decide because of her age, sex, and
retirement status rather than for any legitimate reason related to the subject matter of the
incentive compensation plan. Compl. ¶ 71. Taking these facts in her favor, Offereins pleads that
Discover had the discretion to declare forfeit all or a portion of the unvested incentive
compensation for younger, male executives, but Discover chose to punish Offereins with the
most severe financial consequences, even though her comparators bore significantly greater
responsibility for the credit card misclassification matter at issue in Project Simple. See Compl.
¶¶ 81–89. As in Smith, the allegations in the complaint here state a plausible claim that Discover
breached the duty of good faith and fair dealing under Delaware law. See also SerVaas v. Ford
Smart Mobility LLC, 2021 WL 3779559, at *9–10 (Del. Ch. Aug. 25, 2021); Sheehan, 2020 WL
2838575, at *9–10.
Iv. Conclusion
For the reasons stated, defendant Discover Financial Services’ motion to dismiss the
complaint for failure to state a claim is denied.
Date: September 22, 2025 /s/ Joan B. Gottschall
United States District Judge