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Beabout v. First Merchants Corp.

United States District Court, N.D. Indiana, Hammond Division

February 28, 2017

SHERRI BEABOUT, Plaintiff,
v.
FIRST MERCHANTS CORPORATION, subsidiary FIRST MERCHANTS BANK, N.A., subsidiary LAFAYETTE BANK & TRUST CO., and subsidiary FIRST MERCHANTS TRUST CO., Defendants.

          OPINION AND ORDER

          JON E. DEGUILIO Judge.

         Plaintiff Sherri Beabout filed a complaint against Defendant First Merchants Corporation (“First Merchants”) and its subsidiaries (collectively referred to as “Defendants”) alleging sex discrimination (Count 1), age discrimination (Count 2), and retaliation for engaging in protected activity (Count 3) [DE 1]. Defendants filed an answer and simultaneously moved to dismiss the sex and age discrimination claims [DE 9], arguing that the claims had not undergone the requisite administrative process. After the motion was fully briefed [DE 10, 17, 18], Plaintiff sought leave to amend the complaint [DE 19], to which Defendants only partially object [DE 22]. For the reasons stated below, the Court GRANTS the Plaintiff's Motion to Amend [DE 19] and DENIES AS MOOT Defendants' Partial Motion to Dismiss [DE 9].

         I. BACKGROUND

         Plaintiff Sherri Beabout was employed by First Merchants as a Program Manager supervising investment consultants. On October 3, 2014, an investment consultant allegedly informed Beabout that the new “flamboyantly gay” bank manager at the Plainfield, Indiana bank location would hurt his referrals with a conservative client demographic and therefore potentially affect his income [DE 1 at 3]. Beabout didn't address the issue with her superiors until November 6, 2014. Id. After looking into the matter, Beabout's supervisor, Michael Joyce, informed Beabout that it was believed that her report was false and Beabout had unnecessarily placed First Merchants at risk by communicating unfounded concerns about the relationship between their employees [DE 1 at 3-4]. Beabout was then demoted from her Program Manager position on February 12, 2015 [DE 1 at 4].

         Beabout filed a charge with the EEOC on May 29, 2015[1] [DE 1, 17-1]. Beabout's original charge alleged that First Merchants retaliated against her by demoting her from the Program Manager position after she reported that one of the investment consultants was engaging in discriminatory conduct. Id.

         Beabout thereafter reapplied for the same position, but First Merchants hired an allegedly lesser qualified and younger male for the job on August 9, 2015 [DE 1 at 4]. Thus, on September 3, 2015, Beabout filed an amended EEOC charge adding sex and age discrimination claims [DE 1, DE 17-2]. The EEOC issued a Notice of Right to Sue on December 10, 2015-only 98 days after Beabout filed the amended EEOC charge. Beabout filed the instant action on March 7, 2016 [DE 1].

         Defendants then moved to dismiss the sex and age discrimination claims [DE 9], arguing that because these claims differed from the original retaliation charge, Beabout should have filed her intentional discrimination claims as “a new and separate [EEOC] Charge, to allow it to go through the requisite administrative process.” [DE 9 at 2]. In other words, Defendants believed that Beabout had to then wait for the 180-day statutory waiting period to expire before filing the instant lawsuit. See 29 C.F.R. § 1601.28(a). Defendants have since acknowledged that the ADEA statutory waiting period is only 60 days, 29 C.F.R. § 1626.7, and therefore, they concede that only the Title VII sex discrimination claim is subject to dismissal [DE 22 at 5].

         Accordingly, on April 27, 2016, Beabout timely filed a new EEOC charge alleging that she was denied a promotion to Program Manager in retaliation for engaging in protected activity and because she was a female over the age of forty.[2] The EEOC then issued a second notice of Right to Sue on November 16, 2016-over 180 days after the charge was filed. Beabout now seeks leave to amend the complaint to include these supplemental facts with respect to her exhaustion of the requisite administrative remedies [DE 19]. Ultimately, the substance of her three claims in the proposed amended complaint [DE 19-1] are the same as those asserted in her original complaint [DE 1].

         Ironically, Defendants contend that leave should be denied under Federal Rule of Civil Procedure 15(a)(2) because the amendment is futile. Despite the fact that Beabout did exactly what Defendants complained she failed to do, Defendants now argue that the EEOC didn't have jurisdiction to issue the second Right to Sue notice.

         II. DISCUSSION

         As a preliminary matter, the Court notes that the amended complaint contemplates only supplementing the original complaint based on events occurring after the original complaint was filed with respect to Plaintiff's exhaustion of administrative remedies. Such supplemental allegations really fall under Rule 15(d), rather than 15(a), and the Court finds it just under the circumstances to allow the additional facts to be supplemented.

         However, even considering the Defendants' argument relative to Rule 15(a)(2), this Rule entrusts to the Court's discretion the decision of whether to permit a party to amend its pleading after the initial stages of litigation, and instructs the Court to “freely give leave when justice so requires.” See Orix Credit Alliance, Inc. v. Taylor Machine Works, Inc., 125 F.3d 468, 480 (7th Cir. 1997). Thus, the Court will generally grant leave to amend unless one or more of three conditions exist: (1) the party seeking amendment has engaged in undue delay or some sort of bad faith; (2) the opposing party would suffer undue prejudice; or (3) the amendment would be futile. Id.

         Defendants do not argue that the first two conditions apply here, rather, they contend that the amendment is futile. Admitting that there is no case law directly on point, Defendants argue that the amendment would be futile because the EEOC didn't have jurisdiction to issue the second Right to Sue notice after it issued the first Right to Sue notice thereby terminating further proceedings on the claims, consistent with 29 C.F.R. § 1601.28(a)(3) [DE 22]. For the reasons explained below, the Court declines to award Defendants such a windfall.

         Under EEOC regulations, a charge may be “amended” to cure technical defects or omissions, including failure to verify the charge, or to clarify and amplify allegations made therein. 29 C.F.R. § 1601.12(b). Further, amendments alleging additional acts which constitute unlawful employment practices related to or growing out of the subject matter of the original charge will relate back to the date the charge was first received. Id. This Circuit's case law explains that where facts are initially alleged that could only support one kind of discrimination, then additional acts of discrimination based on new legal theories do not relate to or grow out of ...


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