One of the most important decisions in employment discrimination law this year remains the Fourth Circuit Court of Appeals’ decision in Balderson v. Lincare Inc., in which the Court reiterated that Title VII plaintiffs (and those bringing claims under similar state laws) must have evidence that their employer acted with discriminatory intent—even if the employer’s proffered reasons for their actions are pretextual.

The plaintiff in the case was Chandra Balderson, a former sale’s representative at Lincare, Inc. (“Lincare”), a Florida corporation that supplies respiratory-therapy products, including ventilators, across the country.  Balderson was “a top-10 performer out of Lincare’s approximately 1,800 sale’s representatives.”  She reported to, and worked closely with, her manager, Chad Brady.  

In 2019, Lincare conducted an internal audit of the facility where Balderson worked.  The audit revealed, in relevant part, that nineteen patients’ files for whom ventilators were ordered “contained a handwritten progress note, signed and dated by a physician, with a nearly identical statement of why the ventilator was medically necessary.” The body of each patients’ progress notes were identical, or nearly identical. The company investigated and concluded that Balderson was providing physicians with a template for their progress notes in order to ensure that their ventilator orders were approved.  Lincare fired Balderson.

The investigation also concluded that Brady had been sending physicians a document containing three examples of statements that would support a ventilator order.  Brady had also given free equipment to a patient rather than following the standard protocol for replacing equipment that the patient had lost in a fire.  Unlike with Balderson, Lincare only issued Brady a final written warning.

Balderson sued and claimed that Lincare had discriminated against her on the basis of sex as evidenced by Brady’s more lenient punishment.  The burden-shifting framework for such claims, both under Title VII and West Virginia state law, has three parts.  First, the plaintiff must show an inference of discrimination by establishing a prima facie case.  Second, the defendant must proffer a legitimate, nondiscriminatory reason for the challenged employment action.  Third, the plaintiff is accorded an opportunity to demonstrate that the defendant’s articulated rational was merely a pretext for discrimination and that sex was a determinative factor in the defendant’s employment decision.

Balderson based her prima facie case on the disparate treatment that she had received as compared to Brady.  Lincare responded that Brady’s punishment correlated with his less serious misconduct—providing example statements, rather than a template, to physicians.  After a bench trial, the district court found that Lincare’s proffered reason was pretextual because Lincare’s reasoning had shifted over time and because the district court saw no meaningful difference between Balderson’s and Brady’s conduct.  Critically, the district court then found, under the third part of the burden-shifting framework, that “it was entitled to ‘infer the ultimate fact of sex discrimination’ simply upon finding that Balderson had established a prima facie case and that Lincare’s proffered reason for her termination was pretextual.”  The court entered judgment for Balderson.

The Fourth Circuit reversed, holding that—without reaching the district court’s findings on the first and second part of the framework—the district court’s finding on the third part was clearly erroneous.  The Court cited Reeves v. Sanderson Plumbing Products, Inc., in which the United States Supreme Court held that, even if a plaintiff proves both a prima facie case of discrimination and that the reasons given by the defendant were pretextual, unlawful discrimination does not automatically follow.

The Fourth Circuit held that the district court had adopted the exact reasoning that the Supreme Court struck down in Reeves.  First, there was no evidence that would allow a factfinder to conclude Balderson’s employment termination was due to her sex.  Balderson herself admitted that her sex was never an issue at Lincare.  Nobody made “gender-related” comments to her, and Lincare replaced her with a female employee.  Second, Balderson and Brady’s circumstances were different.  Balderson earned commissions from her sales and “had a direct financial incentive to increase her sales as much as possible.”  One of the necessary prerequisites for Balderson to receive her commission payment was a note from the doctor stating why the patient needed that Lincare product.  Balderson admitted she had regularly been using the handwritten template progress notes with the knowledge that these notes would be added to the patients’ files after being signed by the physician.  Brady, on the other hand, did not have sales responsibilities, or earn commission.  Nor was there any evidence that he had intended for physicians to copy his “example” notes verbatim.

Because the record was “bare of evidence that Balderson’s sex played a role in her termination,” the district court had clearly erred in finding “that the disparity of [Balderson’s and Brady’s] punishments could only be explained as sex discrimination.”

The Fourth Circuit’s decision in Balderson is welcome reinforcement for employers defending against baseless claims of discrimination.  The employee always bears the burden of proving discriminatory intent.

Many thanks to summer clerk, Dante Jennings, for his contributions to this article.