Palmeri v. Goodwill Industries of Middle Tennessee

Filing 44

MEMORANDUM. Signed by District Judge Aleta A. Trauger on 8/23/18. (gb)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION

MICHELLE PALMERI,
Plaintiff,
v.
GOODWILL INDUSTRIES OF
MIDDLE TENNESSEE,
Defendant.

)
)
)
)
)
)
)
)
)
)

Case No. 3:17-cv-00901
Judge Aleta A. Trauger

MEMORANDUM
Goodwill Industries of Middle Tennessee (“Goodwill”) has filed a Motion to Amend
Answer (Docket No. 25), to which Michelle Palmeri has filed a Response (Docket No. 33), and
Goodwill has file a Reply (Docket No. 41). Goodwill has also filed a Motion for Summary
Judgment (Docket No. 27), to which Palmeri has filed a Response (Docket No. 35), and
Goodwill has filed a Reply (Docket No. 42). Palmeri has filed a Motion for Summary Judgment
and Leave to File Under Seal (Docket No. 31), to which Goodwill has filed a Response (Docket
No. 37), and Palmeri has filed a Reply (Docket No. 43). For the reasons set out herein, the
motion to amend will be granted and the motions for summary judgment will be denied, with the
exception of Palmeri’s request to place certain documents under temporary seal.
I. BACKGROUND
Palmeri was hired by Goodwill as a store manager on February 2, 2004. (Docket No. 38 ¶
1.) Over time, Palmeri became involved in training other managers and assisting with
management on a district-wide level. (Id. ¶ 2.) In 2010, she was promoted to the position of
District Manager. As District Manager, Palmeri was responsible for nine stores and over 400
employees. (Id. ¶¶ 3–4.) During her time at Goodwill, Palmeri never received a performance

evaluation with a total score of “Below Expectations,” “Unsatisfactory,” or “Below
Requirements.” (Id. ¶ 5.) On March 1, 2015, Palmeri received a merit-based raise of $949.48 per
year. (Id. ¶ 9.) In May 2014, she received what appears to have been her last performance review
before she was terminated. (See Docket No. 32-3 at 65.) She received a score of 3.73 out 5,
which qualified as “Effective” and fell shortly below “Highly Effective.” (Docket No. 38 ¶ 6.)
On August 14, 2015, she was terminated, allegedly for having made errors in her reported
mileage on travel reimbursement forms. (Id. ¶ 7.)
At the time she was fired, Palmeri’s annual salary was $57,949.80. (Id. ¶ 8.) She has
identified a number of other Goodwill district managers—both men and women—who made the
following salaries:
District
manager
Michelle
Palmeri

Start date in Salary (2014)
position
2010
$57,000.32

Salary (2015)

Citation

$57,949.80

Vicki Spurlin

2000

$70,000.00

$70,345.21

Jennifer
Martin
Lisa Binkley

2014

$56,000.00

$56,276.16

2015

Docket
No. 38
¶¶ 8–9.
Id. ¶¶ 10–
11.
Id. ¶¶ 12–
13.
Id. ¶ 14.

Jerry Vick

Unknown
(2004-2010)
2006

N/A (different $56,000.00
position)
$67,378.48
N/A (different Id. ¶¶ 17–
position)
18.
$68,000.19
$69,360.19
Id. ¶¶ 15–
16.

George
Houck

Goodwill also gave a number of district managers raises at or around the same time, in different
amounts:

2

Date Raise Received
District manager
Michelle Palmeri

Start date
position
2010

Vicki Spurlin

in November 23, 2014

March 1, 2015

N/A

$949.48 (Id. ¶ 9.)

2000

N/A

$345.21 (Id. ¶ 11.)

Jennifer Martin

2014

N/A

$276.16 (Id. ¶ 13.)

Lisa Binkley

2015

N/A

N/A

Jerry Vick

Unknown (2004- $1,962.48 (Id. ¶ 18.)
2010)
2006
N/A

George Houck

N/A
$1,360 (Id. ¶ 16.)

Each of the raises was considered merit-based. (Id. ¶¶ 9, 11, 13, 16, 18.)
Palmeri testified that her supervisor, Jeffrey Luther, had often made derogatory and sexist
comments to her, including comments denigrating the intelligence of other women employees
and mocking Palmeri for being blonde and “air-headed.” (Id. ¶ 22.) She also testified that Luther
had once overruled her recommendation that a male store manager be terminated, telling her,
instead, to transfer the employee because “maybe he just cannot work for a female.” (Id. ¶ 23.)
Palmeri’s job involved a substantial amount of driving, because she was required to visit
each store in her district on a regular basis. (Docket No. 36 ¶ 8.) She submitted monthly mileage
expense vouchers to request reimbursement for the miles that she drove. (Id. ¶¶ 9, 12.) On the
vouchers, Palmeri was required to identify each individual trip, the store visited, the date, the
mileage she drove, the business purpose of the visit, and the dollar amount requested. (Id. ¶ 10.)
Palmeri has conceded that she may have entered erroneous information on her mileage vouchers
for three days, June 11, 17, and 19, 2015. Those errors, she explains, consisted of instances
where she did, in fact, engage in work-related travel, but she misidentified which store she

3

visited and, therefore, calculated the mileage incorrectly. She attributed any error to the amount
of stress she was under and the large amount of driving she was being required to do. (Id. ¶ 15.)
Palmeri’s errors were uncovered in a purportedly random audit by Goodwill’s Loss
Prevention Department. (Id. ¶ 18.) Three loss prevention employees reviewed security camera
footage from the stores that Palmeri had cited on her forms to determine if she actually visited
those stores on the relevant days. (Id. ¶ 21.) That review appears to have confirmed that Palmeri
did not visit the stores in question; the loss prevention employees, however, did not review
footage from other nearby stores to see if Palmeri’s error had simply been with regard to which
store she visited, rather than whether the travel occurred. (Id. ¶¶ 24–27.) On August 6, 2015,
Goodwill’s Director of Loss Prevention met with Palmeri and Luther to discuss the findings. (Id.
¶ 28.) Palmeri maintains that, in the meeting, she explained that she may have simply put the
wrong store locations for the travel performed. (Id. ¶ 29.) On August 14, 2015, Goodwill
terminated Palmeri, ostensibly for her filing of false mileage vouchers. (Id. ¶ 30.)
Goodwill concedes that any financial impact of Palmeri’s errors was “nominal” (Id. ¶
32), and Palmeri has introduced a decision from the Tennessee Department of Labor &
Workforce Development’s Employment Security Division Appeals Tribunal, in which the
Tribunal examined the allegations against Palmeri and concluded that her error, at least with
regard to the travel considered by the Tribunal, was actually in Goodwill’s favor—resulting,
ultimately, in a six-dollar loss by Palmeri (Docket No. 32-16 at 2).1 Goodwill maintains that it
fired Palmeri, despite the fact that Palmeri apparently did not financially benefit from the
misstatements and Goodwill was not economically harmed, because “Goodwill holds its District
Managers to high standards of integrity and accountability.” (Docket No. 36 ¶ 32.)

1
Goodwill disputes the admissibility of the Appeals Tribunal’s decision. Even if the decision is not
admissible, however, Goodwill’s concession that Palmeri caused no more than nominal loss confirms the
general conclusion that Palmeri’s errors were not to her meaningful benefit.

4

Palmeri testified that other district managers—in particular, Houck and Vick—had, in the
past, stated that they would sometimes intentionally “not put the correct distance” for their
mileage and instead underreport the mileage, so as to fall under mileage reimbursement caps, and
that they anticipated doing so in the future to avoid a proposed policy requiring car rentals for
mileage over the caps. (Docket No. 29-1 at 158.) She also testified that Luther told her that,
when he was a district manager, he would intentionally structure his travel schedule to avoid the
mileage caps. (Id. at 16). Goodwill has offered a Declaration by its Director of Human
Resources, Sheila Holt, stating that “it is not a violation of any Goodwill policy for District
Managers to underreport mileage” and “not a violation of any Goodwill policy for District
Managers to plan their store visits to stay within Goodwill's daily or monthly mileage caps on
travel.” (Docket No. 29-2 ¶¶ 28–29.) Holt also claims that, as of the time of Palmeri’s
termination, neither the Loss Prevention Department nor Human Resources was aware of any
other district manager who had submitted mileage expense vouchers that could not be
substantiated by surveillance video. (Id. ¶ 26.)
On May 30, 2017, Palmeri filed a short, four-page Complaint in this case. (Docket No.
1.) She claimed that Goodwill’s claimed reason for her firing was pretextual and that she was, in
fact, terminated because of her sex. (Id. ¶¶ 9, 11.) The Complaint also claims that “Palmeri, as a
female district manager (one of few females in Tennessee) was paid less than similarly situated
district managers who were male.” (Id. ¶ 10.) The Complaint pleads causes of action for sex
discrimination in violation of Title VII and the Tennessee Human Rights Act (“THRA”), as well
as for unequal pay under the federal Equal Pay Act. (Id. ¶ 13.)
On July 14, 2017, Goodwill filed an Answer. (Docket No. 10.) In the Answer, Goodwill
denies that its reason for firing Palmeri was pretextual and denied, without further explanation,

5

the claim that Palmeri was paid less than similarly situated male district managers. (Id. ¶¶ 9–10.)
Goodwill also identifies a number of “Additional Defenses.” (Id. at 3–4.)
On September 11, 2017, the court entered an Initial Case Management Order. (Docket
No. 13.) That Order provided that “[a]ny motions to amend or to add parties shall be filed by no
later than December 1, 2017.” (Id. at 2.) The court set a deadline of June 1, 2018, for dispositive
motions. (Id. at 3.) The deadline for motions to amend passed without either party’s filing such a
motion.
As part of discovery, Palmeri issued Interrogatories to Goodwill. Palmeri’s Fifth
Interrogatory asked Goodwill to identify “Plaintiff’s salary or rate of pay at the time of
termination and describe all employee benefits that Plaintiff lost as a result of the termination.”
(Docket No. 33-2 at 5.) Her Sixth Interrogatory asked Goodwill to “state or produce other
documentation of the name, sex, salary or rate of pay, and benefits of all (a) store managers, (b)
assistant store managers, (c) district managers, and (d) other management-level employees of
Goodwill Industries of Middle Tennessee at the time of Plaintiff’s termination.” (Id.) After a
delay necessitated, Goodwill argues, by the lack of an agreed-upon protective order (Docket Nos.
18, 26 at 2, 41 at 4), Goodwill eventually produced the requested payroll information, limited to
the time of Palmeri’s termination. (See Docket No. 41-1.) On April 24, 2018, counsel for Palmeri
sent counsel for Goodwill a letter objecting to the scope of the information provided:
Plaintiffs’ Interrogatory requests documentation for “employees of Goodwill
Industries of Middle Tennessee at the time of Plaintiff’s termination.” Defendant
seems to have interpreted this to mean that Plaintiff was requesting pay
information only from the time of her termination (August 2015). This is
incorrect. Rather, the final clause plainly refers to “employees . . . at the time of
Plaintiff’s termination” (emphasis added). All manager pay information, including
information from before August 2015, is highly relevant to Plaintiff’s Equal Pay
Act claim.

6

(Id. at 1.) The parties’ disagreement on the question of whether Palmeri was entitled to historical
payroll information continued, and the court held a telephone conference on May 10, 2018, after
which the court ordered Goodwill to “produce pay records for the four individuals mentioned in
the telephone conference, going back three years from the date of the plaintiff’s termination.”
(Docket No. 23 at 1.)
On June 1, 2018, both parties filed Motions for Summary Judgment. (Docket Nos. 27 &
31.) Goodwill, however, also filed an untimely Motion to Amend, seeking to amend its Answer
to
include an affirmative defense as articulated by the Equal Pay Act (“EPA”)
whereby any wage differential between what female[] employees were earning
and what male[] employees were earning at relevant times was based on a
seniority system, a merit system, a system which measures earnings by quantity or
quality of production, or any other factor other than sex, or a combination thereof.
(Docket No. 25 at 1.)
II. LEGAL STANDARD
A. Motion to Amend
Federal Rule of Civil Procedure 15(a) governs amending pleadings before trial. A party
may amend a pleading once as a matter of course either (a) within twenty-one days after serving
it, or (b) if the pleading is one to which a responsive pleading is required, within twenty-one days
after service of a responsive pleading or twenty-one days after service of a motion under Rule
12(b), (e) or (f), whichever is earlier. Fed. R. Civ. P. 15(a)(1). In all other cases, a party may only
amend a pleading by obtaining the opposing party’s written consent or receiving leave of the
court. Fed. R. Civ. P. 15(a)(2). Where it is requested, the court should “freely” give leave when
justice so requires. Foman v. Davis, 371 U.S. 178, 182 (1962). However, a request to amend a
pleading after a scheduling order’s deadline for doing so is construed as both a request for leave

7

to amend and for modification of the schedule; accordingly, the moving party must demonstrate
“good cause” for allowing the amendment. Fed. R. Civ. P. 16(b)(4); see Leary v. Daeschner, 349
F.3d 888, 907 (6th Cir. 2003) (holding that a party seeking to amend a pleading in contravention
of a scheduling order must satisfy both Rule 15 and Rule 16).
A motion to amend, moreover, may be denied where there is “undue delay, bad faith or
dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by virtue of allowance of the
amendment, futility of amendment, etc.” Riverview Health Inst. LLC v. Med. Mut. of Ohio, 601
F.3d 505, 520 (6th Cir. 2010) (quoting Foman, 371 U.S. at 182). Moreover, “[a] proposed
amendment is futile if the amendment could not withstand a Rule 12(b)(6) motion to dismiss.”
Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000) (citing Thiokol Corp.
v. Dep’t of Treasury, State of Mich., 987 F.2d 376, 382–83 (6th Cir. 1993)).
B. Motions for Summary Judgment
Rule 56 requires the court to grant a motion for summary judgment if “the movant shows
that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). To win summary judgment as to the claim of an adverse
party, a moving defendant must show that there is no genuine issue of material fact as to at least
one essential element of the plaintiff’s claim. Once the moving defendant makes its initial
showing, the burden shifts to the plaintiff to provide evidence beyond the pleadings, “set[ting]
forth specific facts showing that there is a genuine issue for trial.” Moldowan v. City of Warren,
578 F.3d 351, 374 (6th Cir. 2009); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23
(1986). Conversely, to win summary judgment as to its own claims, a moving plaintiff must
demonstrate that no genuine issue of material fact exists as to all essential elements of her

8

claims. “In evaluating the evidence, the court must draw all inferences in the light most favorable
to the non-moving party.” Moldowan, 578 F.3d at 374 (citing Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
At this stage, “the judge’s function is not . . . to weigh the evidence and determine the
truth of the matter, but to determine whether there is a genuine issue for trial.” Id. (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). But “[t]he mere existence of a
scintilla of evidence in support of the [non-moving party’s] position will be insufficient,” and the
party’s proof must be more than “merely colorable.” Anderson, 477 U.S. 242, at 252. An issue of
fact is “genuine” only if a reasonable jury could find for the non-moving party. Moldowan, 578
F.3d at 374 (citing Anderson, 477 U.S. at 252).
III. ANALYSIS
A. Motion to Amend
The Equal Pay Act sets a baseline rule that no covered employer “shall discriminate . . .
between employees on the basis of sex by paying wages to employees . . . at a rate less than the
rate at which he pays wages to employees of the opposite sex . . . 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)(1). That general rule, however, comes
with an important statutory exception, namely that a difference in pay between otherwise
qualifying employees of opposite sexes is permissible “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.” Id. Because
the employer’s legitimate reason for the pay differential is set out as an exception to the Equal
Pay Act’s general prohibition—rather than merely a negation of the plaintiff’s case-in-chief—it

9

has been construed by the courts as an affirmative defense. See Murphy v. Ohio State Univ., 549
F. App’x 315, 318 (6th Cir. 2013) (citing Balmer v. HCA, Inc., 423 F.3d 606, 612 (6th Cir.
2005); Kovacevich v. Kent State Univ., 224 F.3d 806, 826 (6th Cir. 2000)). Generally speaking, a
party that seeks to rely on an affirmative defense “must affirmatively state” that defense in its
responsive pleading. Fed R. Civ. P. 8(c)(1). Goodwill did not raise an affirmative defense based
on its pay differentials’ being justified by a factor other than sex in its Answer, nor did it seek to
do so before the court’s deadline for amending pleadings. It seeks to make such an amendment
now.
Goodwill argues that good cause exists for it to be allowed to amend its Answer in
violation of the court’s Scheduling Order because Palmeri’s scant pleading, combined with her
actions during discovery, led Goodwill to believe, mistakenly, that its interests would be
adequately served by merely disputing Palmeri’s prima facie case under the Equal Pay Act. In
particular, Goodwill points out that it originally read Palmeri’s Interrogatories as focusing only
on any pay differentials that existed at the time of her termination. If Palmeri’s claims were
confined to salaries as of the date of her termination, she would not be able to rely specifically on
the widely different merit-based raises that were given in the preceding months, and she would
be unable to cite Jerry Vick as a comparator, because Vick was no longer a district manager at
the time. Only when it realized that it would have to defend Palmeri’s pay throughout the
relevant period, Goodwill argues, did it recognize the need to plead the affirmative defense.
The court notes, initially, that nothing Goodwill has offered provides justification for its
original failure to plead the affirmative defense in its Answer. While Palmeri’s Complaint was
short, it was more than adequate to put Goodwill on notice that Palmeri was pursuing an Equal
Pay Act Claim. (See Docket No. 1 ¶ 13.B.) Palmeri’s description of the relevant pay differential,

10

moreover, was not limited to a differential at the time she was terminated. She stated merely that
she “was paid less than similarly situated district managers who were male.” (Id. ¶ 10.) The
“factor other than sex” affirmative defense, moreover, is hardly some obscure issue that
Goodwill could not have anticipated. It is an express statutory defense that exists in the very
same subsection as the Equal Pay Act’s liability provision, 29 U.S.C. § 206(d)(1), and its
litigation is wholly routine in Equal Pay Act cases. See Cooper v. United Airlines, Inc., No. 13CV-2870 JSC, 2014 WL 836674, at *1 (N.D. Cal. Feb. 28, 2014) (“In response to Equal Pay Act
claims under Section 206(d), a defendant will commonly defend a disparity in pay as being
justified by some ‘factor other than sex.’”) (citation omitted). Goodwill, moreover, pled several
other commonly relied-upon affirmative defenses in discrimination cases. (Docket No. 10 at 3–
4.) Goodwill’s omission of this particular affirmative defense in its Answer, therefore, seems
inexplicable as anything other than an oversight.
The good cause required here, however, is not good cause for Goodwill’s having omitted
an important defense from its initial pleading, but good cause for the court’s departing from its
Scheduling Order to allow an amendment. Fed R. Civ. P. 16(b)(4). Counsel for Goodwill has
made a plausible argument that they were confused about the scope of the claims Palmeri
intended to pursue and that Palmeri’s actions in discovery, innocently or not, contributed to that
confusion. The court, therefore, must consider whether Goodwill’s confusion would actually
justify, or at least explain, its failure to seek an amendment sooner.
Goodwill suggests that, if it merely had to defend itself against an Equal Pay Act claim
based on its August 2015 salary figures, there would have been no need to rely on any
affirmative defense, because Palmeri would have been unable to make out her prima facie case.
“To establish a prima facie case for an EPA claim, a plaintiff must show that an employer paid

11

different wages to an employee of the opposite sex for substantially equal work.” Crowder v.
Railcrew Xpress, 557 F. App’x 487, 494 (6th Cir. 2014) (quoting Kovacevich v. Kent State Univ.,
224 F.3d 806, 826 (6th Cir. 2000)). In August 2015, Palmeri was making $57,949.80 a year. Her
sole identified male peer, George Houck, was making $69,360.19 a year. There can be little
doubt that that differential would be enough to support a prima facie case under the Equal Pay
Act, assuming all other requirements were met. Nevertheless, Goodwill posits that Palmeri’s
prima facie case would fail, with regard to the 2015 figures, because one female district
manager, Vicki Spurlin, was making slightly more than Houck, who was junior to her by several
years. Goodwill, however, has not identified any case law that would support the conclusion that
identifying one highly paid female employee would defeat an Equal Pay Act claim. To the
contrary, several courts, including the Supreme Court, have held that the existence of highly paid
female comparator employees “does not preclude [the] plaintiff from establishing a prima facie
case.” Love v. AutoZone Stores, Inc., No. 1:12 CV 2260, 2013 WL 5797677, at *4 n.3 (N.D.
Ohio Oct. 28, 2013) (citing Corning Glass Works v. Brennan, 417 U.S. 188, 208 (1974)); cf.
Connecticut v. Teal, 457 U.S. 440, 455 (1982) (“Title VII does not permit the victim of a facially
discriminatory policy to be told that he has not been wronged because other persons of his or her
race or sex were hired. That answer is no more satisfactory when it is given to victims of a policy
that is facially neutral but practically discriminatory.”).
Indeed, allowing the existence of one highly paid woman to defeat, categorically, an
Equal Pay Act claim would conflict with the “broadly remedial” purposes of the Act, Corning
Glass Works, 417 U.S. at 208, by requiring some plainly meritorious claims to fail for no reason
based in the statute itself. One can imagine, for example, a workplace where all employees are
paid pursuant to a formula based on seniority and qualifications, with the exception that every

12

woman is paid $1000 less than every identically qualified and experienced man. That workplace
might have many women who are paid more highly than many men. The highest paid employee
might even be a woman, if that woman’s experience and qualifications happened be enough for
her to warrant a salary more than $1000 higher than the highest-paid man. It is difficult to
imagine, however, how one could argue that that hypothetical employer would be in compliance
with the Equal Pay Act’s prohibition on “paying wages to employees . . . at a rate less than the
rate at which he pays wages to employees of the opposite sex . . . for equal work on jobs the
performance of which requires equal skill, effort, and responsibility, and which are performed
under similar working conditions,” unless pursuant to a reason other than sex. 29 U.S.C. §
206(d)(1). Goodwill, however, endorses a reading of the statute that would require the court to
grant summary judgment in the employer’s favor in such a situation. Without some basis in case
law or statutory text for adopting such a rule, the court will not do so. Goodwill’s confidence that
it could defend the August 2015 salaries based solely on the prima facie case was, therefore,
mistaken, and the court is, accordingly, unconvinced that confusion about the date range of
Palmeri’s Equal Pay Act claim can wholly explain the delay in seeking to amend the Answer.
Nevertheless, Goodwill’s confusion does complicate matters. A defendant’s merely
realizing that it failed to plead a defense of which it should have been aware is not typically good
cause sufficient to justify allowing the amendment of an answer in violation of a scheduling
order. See, e.g., Nourison Rug Corp. v. Parvizian, 535 F.3d 295, 298 (4th Cir. 2008); Sherman v.
Winco Fireworks, Inc., 532 F.3d 709, 717 (8th Cir. 2008); A Love of Food I, LLC v. Maoz
Vegetarian USA, Inc., 292 F.R.D. 142, 144 (D.D.C. 2013); cf. U.S. ex rel. Martin Marietta
Materials, Inc. v. Nelson, Inc., 286 F.R.D. 327, 331 (W.D. Tenn. 2012) (denying motion to
amend answer to raise counterclaims in violation of scheduling order). Goodwill’s omission,

13

however, appears, at least in part, to be the result of not merely Goodwill’s failing to realize it
needed to raise the defense, but also its misunderstanding of facts relevant to how important the
affirmative defense would be. While the strategy of focusing solely on the prima facie case may
always have been inadvisable, Goodwill may well be correct that it is more inadvisable if one
considers pay decisions made prior to August 2015, in particular Goodwill’s supposedly meritbased raises and the availability of an additional, highly-paid male comparator. Goodwill’s
confusion, therefore, is not irrelevant.
Moreover, the nature of the particular defense here also weighs in favor of allowing
amendment. As the court has noted, the defense that Goodwill wishes to raise is a commonplace
and predictable feature of litigation under the Equal Pay Act. On one hand, that makes
Goodwill’s omission hard to understand. On the other hand, however, the centrality of the
“factor other than sex” defense to Equal Pay Act cases also means that Palmeri’s counsel should
have predicted, from the beginning, that this defense would likely be raised in response to her
claim.2 Accordingly, one of two possibilities appears likely to be true: either Palmeri did not
realize, until recently, that Goodwill’s omission amounted to a waiver, in which case Palmeri
would not be prejudiced by allowing amendment now; or Palmeri realized the gravity of
Goodwill’s error and waited patiently until it was too late for the error to be easily fixed, then,
understandably, sought to reap the fruits. There is nothing, of course, inherently wrong with a
litigant’s taking advantage of her opponent’s mistake. However, insofar as the court has some
discretion under the Federal Rules of Civil Procedure with regard to whether to depart from its
own deadlines, see Leary, 349 F.3d at 908, the court can consider whether it should apply the

2
Moreover, the likelihood that Goodwill would raise such a defense would have been further confirmed
by Goodwill’s claim, in the theory of the case it offered in the Initial Case Management Order, that “[a]ll
personnel actions challenged by Plaintiff were taken by Defendant solely for legitimate business reasons.”
(Docket No. 13 at 2.)

14

Rules in a way that would serve little purpose other than rewarding one litigant for allowing the
other’s error to go uncorrected.
Goodwill has identified other courts that have permitted a defendant to raise a “factor
other than sex” defense, despite omitting it from its original answer and allowing a substantial
delay, because the omission was not in bad faith and raising the defense would not prejudice the
plaintiff. See, e.g., Edwards v. Fulton Cty., Ga., 509 F. App’x 882, 887–88 (11th Cir. 2013);
Dennis v. Dillard Dep’t Stores, Inc., 207 F.3d 523, 526 (8th Cir. 2000). The particular
circumstances of every case will differ, of course, and this situation presents a close call.
Ultimately, however, the court concludes that good cause exists for departure from the
scheduling order and the interests of justice require allowing the amendment. Regardless of what
was pled, there is little doubt that the question of why Palmeri was paid less than some other
district managers has always been at the heart of the equal pay portion of this case. Not allowing
amendment would artificially limit the scope of the questions at issue to the point that Palmeri
would virtually be entitled to a default judgment, at least with regard to aspects of her claim.
Moreover, although the parties’ actions in discovery do not fully justify Goodwill’s delay,
Goodwill appears to be correct that Palmeri’s own slack pace in advancing discovery likely
prevented the issue from coming to a head sooner. The court, accordingly, will grant leave to
amend the Answer and will consider the motions for summary judgment in the context of
Goodwill’s having raised an affirmative defense.
B. Motions for Summary Judgment
1. Equal Pay Act
As the court has already noted, a prima facie case under the Equal Pay Act consists of
showing “that an employer paid different wages to an employee of the opposite sex for

15

substantially equal work.” Crowder, 557 F. App’x at 494 (quoting Kovacevich, 224 F.3d at 826).
“Once a plaintiff has proven her prima facie case, the burden shifts . . . to the defendant to
provide one of four affirmative defenses: ‘(1) a seniority system; (2) a merit system; (3) a system
which measures earnings by quantity or quality of production; or (4) any other factor other than
sex.’” Warf v. U.S. Dep’t of Veterans Affairs, 713 F.3d 874, 881 (6th Cir. 2013) (quoting Buntin
v. Breathitt Cty. Bd. of Educ., 134 F.3d 796, 799 (6th Cir. 1998)).
As comparators, Palmeri offers two men who were district managers during all or part of
Palmeri’s own tenure in that position—George Houck and Jerry Vick—as well as Jeffrey Luther,
whom Palmeri identifies as her predecessor. Goodwill’s sole argument that Palmeri has failed to
establish her prima facie case with regard to Houck and Vick is the aforementioned suggestion
that Vicki Spurlin’s high pay negates the fact the Palmeri was paid less than male district
managers. As the court explains above, the standard for a prima facie case under the Equal Pay
Act does not require Palmeri to show that all male comparators were paid better than all female
comparators. Moreover, Goodwill’s argument based on Spurlin’s pay is especially inapposite
with regard to Goodwill’s decision to grant disproportionate raises, because Spurlin’s raise was
one of the lowest. Finally, the fact that Spurlin was paid only slightly more than Houck, despite
the fact that she had been a district manager much longer, would seem, if anything, to support
Palmeri’s allegations. George Houck and Jerry Vick are, therefore, appropriate comparators who
were paid more than Palmeri, and she has established her prima facie case with regard to them.
Whether Palmeri may also rely on Luther as a comparator, however, is more complicated.
Palmeri is correct that, generally speaking, a plaintiff “may meet her prima facie burden by
demonstrating a wage differential between herself and her predecessor.” Buntin, 134 F.3d at 799
(citing Gandy v. Sullivan County, Tenn., 24 F.3d 861 (6th Cir. 1994)); see also Bielawski v. AMI,

16

Inc., 870 F. Supp. 771, 775 (N.D. Ohio 1994) (“The act applies not only where the plaintiff is
paid less than members of the opposite sex employed at the same time as the plaintiff, but also
where the plaintiff is paid less than predecessors.”) (citing Hodgson v. Behrens Drug Co., 475
F.2d 1041, 1049 n. 11 (5th Cir. 1973)).
Determining whether Luther was actually Palmeri’s predecessor in the sense
contemplated by the Equal Pay Act case law, however, has been surprisingly difficult. In her
Statement of Undisputed Material Facts, Palmeri writes: “Plaintiff testified in her deposition that
Jeffery Luther, a man, who was the District Manager for her district immediately prior to her
taking the job, made more when he was District Manager than she did after she was promoted to
the same position.” (Docket No. 38 ¶ 21.) In its Response, Goodwill disputes the fact generally,
but does not specifically take issue with the premise that Luther was Palmeri’s predecessor in
“the same position.” Instead, it merely suggests that Palmeri’s testimony is insufficient to
establish the fact asserted and cites to the portion of its own Statement of Undisputed facts
addressing Luther’s salary and position. (Id.)
Unfortunately, the initial discussion of Luther in Goodwill’s Statement is conspicuously
incomplete. Goodwill first claims that “Jeff Luther was a District Manager from November 2002
to September 2003, and he earned an annualized salary of $43,000.00.” (Docket No. 36 ¶ 51.)
Goodwill’s next discussion of Luther’s position and salary states that, “[a]t the time he was
promoted to Director of Retail, Jeff Luther was paid an annualized salary of $96,000.00.” (Id. ¶
53.) Human Resources documentation of Luther’s salary suggests that the $96,000 salary was
instituted, along with that promotion, in 2015. (Docket No. 35-1.) Goodwill offers no
explanation for the twelve-year gap between 2003 and 2015, despite that being the period in

17

which Luther allegedly would have been, according to Palmeri’s account, her immediate
predecessor.
After considerable prodding, Goodwill, in its Reply in support of its summary judgment
motion, finally explains that, from September 2003 until May 2010, Luther held a position
known, at one time, as “Regional Manager,” but later renamed “District Manager II.” (Docket
No. 42 at 6 & n.5.) In a supplemental Declaration by Goodwill Human Resources Director Sheila
Holt, Holt states that the duties and responsibilities of Luther, as “District Manager II,” were
different from those of an ordinary district manager—although Holt provides very little
explanation of how they were different, other than that “Mr. Luther had additional
responsibilities for store development in West Tennessee.” (Docket No. 42-2 ¶ 6.) In 2010,
Luther was promoted to Assistant Director of Retail, and Palmeri was promoted to District
Manager, but, according to Holt, Palmeri “did not take over all the responsibilities held by Mr.
Luther as District Manager II.” (Id. ¶¶ 7–9.)
It is difficult for the court to understand why the basic facts of what Luther did from 2003
to 2010 have been so difficult to draw out. The result, though, is that there appears to be a
dispute of material fact with regard to whether Luther would be an appropriate comparator.
While Palmeri has established that Luther was, in some sense, Palmeri’s predecessor, neither
party has produced sufficient evidence to give the court an understanding of the full scope of
Luther’s duties from 2003 to 2010 and whether they were meaningfully broader than, or different
from, Palmeri’s. Although Goodwill’s unresponsiveness has clearly contributed to that lack of
clarity, the burden to establish the prima facie case is ultimately Palmeri’s. With regard to
Luther, she has not shown that she is entitled to summary judgment on that point. However,
because she has, at least for the purposes of the present motions, established her prima facie case

18

with regard to Houck and Vick, the burden shifts to Goodwill to establish its reason for the pay
differential with regard to those two employees.
Goodwill argues that Houck and Vick’s higher salaries were justified by their greater
experience, both at Goodwill and in retail generally. According to Holt, both Houck and Vick
had many years of experience in retail and retail management. Specifically, “[i]n August 2015,
District Manager George Houck had been employed with Goodwill for over eight (8) years and
had many years of previous experience in multi-unit retail management.” (Docket No. 29-2 ¶
39.) “Prior to being employed by Goodwill, Jerry Vick had ten (10) years of experience as a
retail store manager, three (3) years of experience as a district manager, two (2) of experience as
a director of store operations, and sixteen (16) years of experience as a retail buyer.” (Id. ¶ 43.)
Holt claims that the district managers’ salaries were “based on a number of factors, including but
not limited to time in position, tenure, job performance and relevant experience,” but not
including sex. (Id. ¶¶ 53–54.) Holt also notes that, when Houck and Vick were new in their
district manager positions, their salaries had been considerably lower. Specifically, Houck’s
starting salary as a district manager had been $46,000 and Vick’s had been $46,009.60. (Id. ¶¶
40, 42.)
As Palmeri notes, terse, general statements about Houck’s and Vick’s experience from
Goodwill’s Human Resources Director are far from enough for Goodwill to be entitled to
summary judgment on Palmeri’s Equal Pay Act claims. Goodwill has offered little explanation
of what that experience consisted of or how it played a role in Goodwill’s salary-setting
practices, let alone established that experience and qualifications were the actual, but-for cause
of the salary differential. Goodwill has, however, offered enough to defeat Palmeri’s own
motion. Houck’s and Vick’s seniority and experience provide a plausible justification for their

19

higher levels of pay.3 There is, therefore, a disputed issue of material fact with regard to whether
Goodwill’s district manager salaries were set on the basis of a factor other than sex. The court
will, accordingly, deny both motions with regard to the Equal Pay Act claim.
2. Title VII/THRA (Pay Discrimination)
The Sixth Circuit has stated that, “when an Equal Pay Act claim and a Title VII claim
arise out of the same set of underlying facts, both stating a charge of wage discrimination, ‘the
standards of liability under the two statutes are sufficiently similar’ that the disposition with
respect to the two claims should be the same.”4 Crowder, 557 F. App’x at 494 (citing Clark v.

3
Palmeri argues that Goodwill should be barred from relying on some of the evidence it has produced
because it failed to timely provide that evidence in discovery. See Fed. R. Civ. P. 37(c)(1) (“If a party
fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed
to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the
failure was substantially justified or is harmless.”). Without prejudice to any ruling about admissibility of
any particular evidence at trial, the court finds that, even if the relevant historical pay records are
excluded, sufficient issues of disputed material fact exist to preclude a grant of summary judgment in
Palmeri’s favor.

4

As some courts have observed, however, construing the Equal Pay Act and Title VII together does raise
at least one complication—namely, that the burden-shifting framework under the Equal Pay Act is
different from the burden-shifting framework that courts use in most Title VII cases. As a result, some
federal circuits have suggested that, in rare cases, the outcomes of the two types of claims might diverge.
See, e.g., King v. Univ. Healthcare Sys., L.C., 645 F.3d 713, 724 (5th Cir. 2011) (“[W]here a plaintiff
makes an adequate prima facie case for both an EPA and a Title VII claim, the defendant bears the burden
of persuasion to prove a defense under the EPA, whereas it has only a burden of production to show a
legitimate nondiscriminatory reason for its actions under Title VII, with the ultimate burden of persuasion
remaining with the plaintiff. As such, where the defendant proffers a reason for its pay differential other
than sex, but does not prove that reason by a preponderance of the evidence, the plaintiff will succeed on
an EPA claim while still bearing the burden of persuasion under Title VII.”); Bauer v. Curators of Univ.
of Missouri, 680 F.3d 1043, 1045–46 (8th Cir. 2012) (“An employer under the EPA carries the burden of
persuasion and must prove an affirmative defense; a Title VII defendant need only articulate a defense.”);
Fallon v. Illinois, 882 F.2d 1206, 1217 (7th Cir. 1989) (“It is possible that a plaintiff could fail to meet its
burden of proving a Title VII violation, and at the same time the employer could fail to carry its burden of
proving an affirmative defense under the Equal Pay Act.”); Brewster v. Barnes, 788 F.2d 985, 987 (4th
Cir. 1986) (holding defendant liable under the EPA but not under Title VII). At this juncture, the court
will follow the general rule adopted by the Sixth Circuit and construe the two statutes together. But see
Beck-Wilson v. Principi, 441 F.3d 353, 360 (6th Cir. 2006) (“The burden shifting under the EPA differs
from the Title VII framework, in which a ‘defendant need only assert a legitimate, non-discriminatory
reason for the different treatment afforded the plaintiff as compared to her similarly situated male coworkers,’ at which point the burden shifts back to the plaintiff to show pretext. Under the EPA, however,

20

Johnson & Higgins, No. 97–4233, 1999 WL 357804, at *3 (6th Cir. May 28, 1999); Kahn v.
Dean & Fulkerson, P.C., No. 99–1015, 2000 WL 1769582, at *9 (6th Cir. Nov. 13, 2000); Lacey
v. Robertson, No. 99–1424, 2000 WL 876491, at *2 (6th Cir. June 21, 2000) (order); Henry v.
Lennox Indus., Inc., 768 F.2d 746, 752 (6th Cir. 1985)); see also Korte v. Diemer, 909 F.2d 954,
959 (6th Cir. 1990) (“Conduct that a jury finds to be ‘based on’ sex, and not motivated by
nondiscriminatory reasons, cannot later be found by a district court to lack an intent to
discriminate on the basis of sex. We therefore hold that the jury’s verdict for [the plaintiff] under
the Equal Pay Act is binding on the district court as to her Title VII claim.”). The parties agree,
moreover, that the analysis governing Palmeri’s Title VII claims should govern her THRA
claims. See Bailey v. USF Holland, Inc., 526 F.3d 880, 885 n.1 (6th Cir. 2008) (“The analysis of
claims brought pursuant to the THRA is identical to the analysis used for Title VII claims.”).
Accordingly, the disputed issues of material fact that preclude granting either motion with regard
to the Equal Pay Act also prevent the court from granting them with regard to Title VII or the
THRA.
3. Title VII/THRA (Termination)
A plaintiff may prove unlawful discrimination by proffering either direct or indirect
evidence. Tennial v. United Parcel Serv., Inc., 840 F.3d 292, 302 (6th Cir. 2016). To analyze
Title VII claims using indirect evidence, the Sixth Circuit applies the burden-shifting approach
established by the McDonnell Douglas line of cases. Id.; see McDonnell Douglas Corp. v.
Green, 411 U.S. 792, 802 (1973). Under this approach, Palmeri must first establish the elements
of a prima facie case. To do so, she must show that she was (1) a member of a protected class,
(2) subject to an adverse employment action, (3) qualified for her position, and (4) replaced by a

the plaintiff ‘never bears the burden of persuasion regarding the affirmative defenses.’”) (quoting Buntin,
134 F.3d at 799–800 n. 6–7).

21

person outside the protected class or treated differently than similarly-situated employees outside
the protected class. Tennial, 840 F.3d at 302 (citing Mitchell v. Toledo Hosp., 964 F.2d 577, 582
(6th Cir. 1992)). Only if Palmeri can establish these elements does the burden shift to Goodwill
to articulate a legitimate, nondiscriminatory reason for the adverse employment action.
McDonnell Douglas, 411 U.S. at 802.
Goodwill’s Memorandum in support of its Motion for Summary Judgment does not argue
that Goodwill is entitled to summary judgment with regard to Palmeri’s termination because
Palmeri cannot establish her prima facie case, but rather proceeds directly to the question of
pretext.5 (Docket No. 28 at 6–10.) In Palmeri’s Memorandum in support of her motion, she
devotes one short paragraph to her termination-related claim, in which she advances minimal
argument that she is entitled to summary judgment on that count. (Docket No. 32 at 20.) Palmeri,
moreover, does not appear to dispute that Goodwill has proffered a legitimate, nondiscriminatory
reason for her termination in the form of the travel voucher allegations against her. Accordingly,
the only issue before the court with regard to the termination claims is whether Goodwill is
entitled to summary judgment on those claims because Palmeri has failed to produce evidence
sufficient for a reasonable juror to conclude that she has established pretext.
Palmeri argues, first, that a reasonable juror could find pretext on the ground that her
mileage errors were an insufficient basis for termination. In particular, she notes that her errors

5
In so doing, Goodwill appears to be conflating the pretext analysis with the analysis under the fourth
element of the prima facie case. In order to establish the fourth element of the prima facie case with
regard to a disciplinary termination, a plaintiff typically must show that her proposed comparators
engaged in acts of “comparable seriousness.” Wright v. Murray Guard, Inc., 455 F.3d 702, 710 (6th Cir.
2006) (quoting Clayton v. Meijer, Inc., 281 F.3d 605, 611 (6th Cir. 2002)). While Goodwill recognizes
the issue of whether Plameri has identified anyone who engaged in an act of comparable seriousness, it
only does so with regard to pretext, not the fourth prima facie element, and concedes that the issue is only
one way to demonstrate pretext and, therefore, is not, in and of itself, determinative. (See Docket No. 28
at 9 (“The third method of proving pretext would consist of evidence that similarly situated employees
outside the protected class were not terminated for the same or similar conduct.”).) The court will confine
its analysis above to the argument actually raised by Goodwill.

22

were easily explainable as inadvertent and that Goodwill concedes that any economic injury was
nominal, if it existed at all. Terminating a long-serving employee who appears to have been
successful within the organization for such a minor infraction is, Palmeri suggests, in and of
itself suspicious. See N.L.R.B. v. Health Care Mgmt. Corp., 917 F.2d 1304 (Table) (6th Cir.
1990) (noting that the “implausibility of the employer’s asserted reasons for its actions” may be
evidence of pretext).
She points next to the fact that other district managers are alleged to have knowingly
underreported mileage and/or structured travel for non-business reasons to avoid reimbursement
caps, but those managers were not terminated. Goodwill responds that Palmeri has not produced
evidence that Goodwill was aware of the other managers’ actions at the time Palmeri was
terminated. While that may be true, it is rendered somewhat beside the point, given that
Goodwill’s Director of Human Resources has confirmed that Goodwill does not forbid either
practice. Accordingly, it is clear that Goodwill’s position is that, if it had been aware of the other
district managers’ underreporting, it would have tolerated it.
Similarly, Goodwill also concedes that it tolerates district managers’ structuring their
travel schedules specifically to stay within reimbursement caps—a practice that would seemingly
involve allowing the manager’s travel schedule to be dictated by his personal desire to maximize
reimbursement, rather than Goodwill’s legitimate business needs. For example, if an employee
faced a daily mileage reimbursement cap of 100 miles, and he had a legitimate business reason to
drive 200 miles, he could double his reimbursement by intentionally and unnecessarily splitting
that travel up over two days—which, Goodwill maintains, it would permit. A reasonable finder
of fact could conclude that Goodwill’s toleration of these distinguishable, but similar, behaviors

23

undermines its position that the high level of moral rectitude it requires of its managers justified
firing Palmeri for her harmless, inadvertent errors.
Palmeri notes further that Goodwill’s allegedly discriminatory pay practices, though not
directly linked to her termination, are suggestive of an environment of hostility to women.
Finally, she points to Luther’s history of comments seeming to show that he subscribed to a
sexist stereotype of an “air-headed” blonde and the fact that he had, on another occasion, made a
comment suggesting that he tolerated a male employee’s inability to work for a female manager.
See Steeg v. Vilsack, No. 5:13-CV-00086-TBR, 2016 WL 6465915, at *2 (W.D. Ky. Oct. 28,
2016) (“[T]he Sixth Circuit has recognized that although stray remarks, ‘standing alone,
generally do not support an inference of discrimination, the comments . . . are not categorically
excludable.’ . . . [W]hile it is well-established that such stray remarks are not ‘conclusive proof,’
they can still ‘add color to the employer’s decisionmaking processes and to the influences behind
the actions taken with respect to the individual plaintiff.’”) (quoting Ercegovich v. Goodyear
Tire & Rubber Co., 154 F.3d 344, 356 (6th Cir. 1998); Conway v. Electro Switch Corp., 825
F.2d 593, 597 (1st Cir. 1987)).
All of those facts, taken together, are sufficient for a reasonable juror to conclude that
Goodwill’s ground for dismissal was pretextual. A reasonable finder of fact could find it
inherently suspicious that Palmeri, who worked at Goodwill for a number of years, advanced
through its ranks to a position of significant responsibility, and had recently received a meritbased pay increase, was dismissed for minor, seemingly inadvertent errors from which she did
not even experience any monetary benefit. That suspicion would only be bolstered by Goodwill’s
position that it generally tolerates at least some inaccurate mileage reporting, if the reporting
represents a departure downwards from the mileage actually driven, and that it tolerates district

24

managers’ structuring their travel specifically to maximize reimbursement. Combined with
Luther’s comments and the pay differential between Palmeri and male district managers, Palmeri
has produced enough from which a reasonable juror could find pretext. The court, accordingly,
will deny both motions for summary judgment with regard to Palmeri’s Title VII and THRA
claims arising out of her termination.
IV. CONCLUSION
For the foregoing reasons, Goodwill’s Motion to Amend Answer (Docket No. 25) will be
granted, and Goodwill’s Motion for Summary Judgment (Docket No. 27) and Palmeri’s Motion
for Summary Judgment and Leave to File Under Seal (Docket No. 31) will be denied, except
with regard to Palmeri’s request for some documents to be placed under seal, which will be
granted as set forth in the accompanying order.
An appropriate order will enter.
______________________________
ALETA A. TRAUGER
United States District Judge

25