Discover Financial must face former executive's discrimination lawsuit, judge rules

Discover Financial Services must face a discrimination lawsuit from former executive Diane Offereins, who alleges gender and age bias after losing over $7 million in stock awards. A U.S. judge ruled that Offereins' claims of being a scapegoat for regulatory issues are plausible under civil rights law. Offereins, the only woman and retired executive affected, argues that the company unfairly targeted her due to her age and gender. Discover has denied the allegations, stating it supported her empowerment efforts.

By Mike Scarcella

Sept 23 (Reuters) - Discover Financial Services failed to persuade a U.S. judge to dismiss a lawsuit by a former executive who accused the digital banking giant of gender and age bias and claimed it made her a scapegoat for regulatory problems as it revoked more than $7 million in stock awards. U.S. District Judge Joan Gottschall in Illinois on Monday said Diane Offereins, who led Discover’s payments network until her retirement in 2023, plausibly alleged violations of U.S. civil rights law and equal pay provisions for now. Offereins, in her lawsuit filed last year, said she was the only woman and only retired executive to lose equity following an internal investigation at the company over the possible misclassification of some credit cards. She had worked at Discover for 25 years.

“Offereins plausibly pleads that Discover viewed her as a convenient scapegoat because, as a woman who had reached retirement age, it believed it was considerably harder for her to ‘fight back’ than it would have been for her younger, male colleagues,” Gottschall wrote.

A lawyer for Offereins, Sean Hecker, said they welcomed the court’s order “allowing this important matter to move forward.”

Discover did not immediately respond to a request for comment. Discover in July 2023 publicly disclosed it had incorrectly classified some individuals’ credit cards as “commercial” beginning around mid-2007, two years before Offereins joined the company’s payment network side. The misclassification caused some merchants to pay higher transaction fees.

Discover’s review of the misclassifications claimed Offereins “engaged in willful or reckless violation of the company’s risk policies,” her lawsuit said. Offereins called the allegation baseless and said she was not responsible for the classification of credit cards.

Discover canceled Offereins’ equity six months after her June 2023 retirement, on the night before her shares were due to vest, she said. In seeking dismissal of Offereins’ lawsuit, Discover said in a court filing that it “championed her for empowering women, and she does not — and cannot — allege that a similarly situated male was treated differently.”

The case is Diane Offereins v. Discover Financial Services, U.S. District Court for the Northern District of Illinois, No. 1:24-cv-08032.

For Offereins: Sean Hecker and Julie Fink of Hecker Fink

For Discover: C. William Phillips and Evan Parness of Covington & Burling, and Michael Gray and Efrat Schulman of Jones Day

Discover hit with gender, age discrimination lawsuit by former executive