Discrimination claims are determined by a three-step analysis under which often the third step — pretext — is key. The first steps are relatively simple to establish. For the first step in their prima facie case, a plaintiff must show: (1) the plaintiff is in a protected class, e.g., a racial minority, age 40 or over, has a disability; (2) satisfactory job performance; and (3) adverse employment action. In the second step, the employer must show it had a legitimate non-discriminatory reason for the adverse employment action. This could be any reason that is not connected to the plaintiff’s protected characteristic, such as some sort of misconduct, poor performance, or policy violation by the employee.

The third step is pretext. This is where most of the action is in an employment discrimination case. Here, the employee must show that the employer’s legitimate non-discriminatory reason for the adverse employment action was not the real reason for the action, but rather was a pretext for discrimination based on the employee’s protected characteristic. Plaintiffs devote much attention trying to establish that pretext exists, which can be proven by several types of evidence. Examples of pretext include changes in an employer’s stated reason for the adverse employment action, deviations from established policies or practices in the action, or implausibility in the employer’s stated non-discriminatory reason.

Despite the ways in which courts have outlined how pretext for discrimination can be proven, there are times when the plaintiff’s evidence of pretext falls short. A recent Fourth Circuit appeals case is a reminder that pretext alone — that is, arguing that the employer’s non-discriminatory reason is not legitimate — will not suffice. A plaintiff must actually prove pretext for discrimination in the employment decision.

Sales rep sues for gender discrimination after admitting to misconduct

Chandra Balderson was terminated by Lincare, Inc., a provider of in-home respiratory care, despite being one of the employer’s most productive sales representatives. The termination was due to Balderson violating Lincare’s legal compliance program and code of conduct. Balderson, whose pay was commission-based, provided physicians with the text for progress notes to justify ventilators being provided to their patients. Lincare found 19 progress notes with the same generic statement of medical necessity for ventilators in patient files for sales made by Balderson. The employer referenced these as Balderson’s “cloned” progress notes. Lincare also found faxes in which Balderson sent the language for the progress notes to the doctors, for which Balderson was paid commissions when a physician ordered a ventilator for a patient using her “cloned” progress notes.

Balderson claimed the reason for her termination was pretextual because a male employee had engaged in similar conduct and received only a final written warning. The trial judge found that the employer’s explanation for the male employee receiving a written warning “was not credible” and awarded $30,141 in back pay and $120,000 in punitive damages against the employer.

Significantly, Balderson admitted her misconduct and that the scripts she gave doctors violated the employer’s policies. Balderson also acknowledged that she was never the subject of any gender-related comments, and that during the termination process, she did not think she was treated differently because of her gender. Still, she argued that the only reason for the different discipline to the male employee as compared to her was because he was a man and she was a woman.

However, the appeals court noted that the male employee was not paid on a commission basis and was not in a sales role. The male employee also engaged in conduct that was materially different from Balderson’s. The male employee provided to doctors alternative examples of language for a chart note that a doctor could use if applicable to a particular patient. The employer concluded that the male employee’s language examples did not rise to the magnitude of Balderson’s misconduct.

Plaintiff fails to prove pretext in discrimination suit

The appeals court stated that the plaintiff must prove intentional discrimination and found that the employer’s proffered reason for the plaintiff’s termination could be false, but that such falsity alone would not necessarily result in a finding of pretext for the real reason being discrimination based on sex. The appellate court found that the district judge had erred in finding that if the employer’s reason were pretextual, then unlawful discrimination must “automatically follow.”

The appeals court stated that while the plaintiff may have shown that her termination was “unwise or even unfair,” she failed to demonstrate that her termination was due to her sex, noting that Balderson testified that her sex was never an issue during her employment or her termination. Moreover, the two investigators of Balderson’s conduct were both female, and Balderson was replaced by a woman. Thus, the appeals court found that whatever doubt Balderson may have cast on the employer’s rationale for terminating her employment after issuing only a warning to the male employee, Balderson simply did not prove intentional discrimination based on her sex.

The takeaway

This case is a helpful reminder to employers of the ultimate issue in every discrimination charge or complaint. When confronted with a complaint from an employee – whether an internal complaint, a charge of discrimination to an administrative agency, or a lawsuit – the determinative question is whether the plaintiff has evidence of intentional discrimination. Merely arguing that the employer’s stated reason for the adverse employment action is unfair, implausible, or not identical to other discipline does not automatically mean that illegal discrimination was present.

Balderson v. Lincare, Inc., Case. No. 21-1753 and 21-1765 4th Cir. 3/15/23)