Chandra Balderson v. Lincare Inc. ( 2023 )

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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 21-1753
CHANDRA BALDERSON, on behalf of herself and a class of others similarly situated,
Plaintiff - Appellee,
v.
LINCARE INC.,
Defendant - Appellant.
No. 21-1765
CHANDRA BALDERSON, on behalf of herself and a class of others similarly situated,
Plaintiff - Appellant,
v.
LINCARE INC.,
Defendant - Appellee.
Appeals from the United States District Court for the Southern District of West Virginia,
at Charleston. Thomas E. Johnston, Chief District Judge. (2:19-cv-00666)
Argued: October 27, 2022 Decided: March 15, 2023
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Before NIEMEYER and RICHARDSON, Circuit Judges, and Michael S.
NACHMANOFF, United States District Judge for the Eastern District of Virginia, sitting
by designation.
Reversed by published opinion. Judge Niemeyer wrote the opinion, in which Judge
Richardson and Judge Nachmanoff joined.
ARGUED: David B. Goroff, FOLEY & LARDNER, LLP, Chicago, Illinois, for
Appellant/Cross-Appellee. Andrew Carver Robey, HISSAM FORMAN DONOVAN
RITCHIE PLLC, Charleston, West Virginia, for Appellee/Cross-Appellant. ON BRIEF:
Andrew Gresik, Chicago, Illinois, Lawrence Kraus, FOLEY & LARDNER LLP, Boston,
Massachusetts, for Appellant/Cross-Appellee. J. Zak Ritchie, Ryan McCune Donovan,
HISSAM FORMAN DONOVAN RITCHIE PLLC, Charleston, West Virginia, for
Appellee/Cross-Appellant.
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NIEMEYER, Circuit Judge:
Lincare, Inc., a supplier of respiratory-therapy products and services, terminated the
employment of one of its most productive sales representatives, Chandra Balderson,
concluding that she had violated Lincare’s “Corporate Health Care Law Compliance
Program” and “Code of Conduct.” While Balderson does not dispute her conduct, she
contends that Lincare discriminated against her on the basis of sex because it gave a fellow
male employee, who had engaged in similar conduct, only a “final written warning.” Based
on this, she commenced this action against Lincare, alleging that it violated the West
Virginia Human Rights Act, W. Va. Code § 5-11-9, which is enforced with the
jurisprudence developed under Title VII of the federal Civil Rights Act of 1964.
Following a bench trial, the district court found Lincare liable to Balderson and
awarded her $30,141 in compensatory damages and $120,000 in punitive damages. In its
opinion, the court concluded that the male employee was indeed an appropriate comparator
and that Lincare’s proffered explanation for its decision to terminate Balderson’s
employment was not credible. And to find Lincare liable on the ultimate issue of
discriminatory intent, the court reasoned that because “the only difference” between the
comparator’s situation and Balderson’s was that “[the comparator] is male and that Ms.
Balderson is female,” it followed that “the disparate treatment between [them] was a result
of discriminatory animus.” The court pointed to no other evidence to support a finding of
discriminatory animus based on sex.
On appeal, Lincare contends that there was no evidence of discrimination on the
basis of sex and that therefore the district court’s finding that it violated the Human Rights
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Act was clearly erroneous as a matter of fact and erroneous as a matter of law. Balderson
cross-appealed, contending that the district court erred in determining her compensatory
damages award.
While the district court’s findings are entitled to substantial deference, in this case
the core evidence showed that Balderson was fired by a woman and replaced by a woman
and that, during the entire process, there was no indication that gender was even remotely
a factor in Lincare’s decision. Balderson herself acknowledged in her trial testimony that
during her employment with Lincare, “[n]o one ever made any gender-related comments
directed at [her]” and that during the entire termination process, there was nothing “about
[Lincare’s] conduct that led [her] to believe that they were treating [her] differently because
of [her] gender.” The only explanation Balderson offered to substantiate the claim that
Lincare had discriminated against her on the basis of sex was her “belie[f]” that she and
her comparator “were doing the same thing” and the fact that “he’s a man; [she’s] a
woman.” And the district court relied on this reasoning.
On this record, while we conclude that Balderson made a persuasive case that firing
her was probably an unfair business decision, she nonetheless failed to present evidence
sufficient for a factfinder to conclude that it was the product of discrimination based on
sex. Accordingly, we reverse. And because of this conclusion, we find Balderson’s cross-
appeal moot.
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I
Lincare is a Florida corporation based in Clearwater, Florida, which does business
through facilities across the country, including, as relevant here, a facility in Parkersburg,
West Virginia. The company is a supplier of respiratory-therapy products and services,
selling, among other things, non-invasive mechanical ventilators to in-home patients on
their physicians’ orders. In providing ventilators, Lincare’s sales representatives work with
physicians by, among other things, providing them with guidance as to the information
necessary for their patients to obtain coverage for the devices from their insurance
companies or from federal programs such as Medicare.
Lincare required all employees to be familiar with and to act in compliance with its
Corporate Health Care Law Compliance Program and Code of Conduct, which include
specific requirements for ethical employee conduct. The Code of Conduct states that it
was “designed to aid all Company employees . . . in complying with the increasingly
complex Health Care Laws” — including the rules and regulations pertaining to Medicare,
Medicaid, and other government-funded health care programs — “by referencing specific
written policies and procedures,” compliance with which is “mandatory for Company
employees.” To serve this purpose, the Code provides a number of examples of prohibited
conduct, including “[m]isrepresenting a diagnosis for the patient to justify the services or
equipment furnished” and “[o]ffering or giving valuable property, equipment, services,
gifts or other benefits to a person in exchange for the referral of patients to the Company.”
Lincare’s compliance program was overseen by Jennifer Pedersen, who had been Lincare’s
Chief Compliance Officer since 2000. She oversaw a department with 46 employees, and
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she and her team conducted approximately 100 compliance investigations each year,
“investigat[ing] anything that’s reported to [them] that is an actual or perceived violation
of the healthcare [compliance] program.”
In November 2015, Chandra Balderson began working as the sales representative
for Lincare in the Parkersburg market area. Prior to her employment with Lincare, she had
worked as a respiratory therapist, and she was licensed as a respiratory care therapist in
West Virginia and Ohio. At Lincare, she became a top-10 performer out of Lincare’s
approximately 1,800 sales representatives. Consistent with that success, her compensation
was “heavily weighted towards commission[s]” — in 2018, for example, she earned over
$80,000 for the year in commissions, in addition to her base salary of around $25,000. As
the sales representative for the Parkersburg area, Balderson reported to Chad Brady, the
manager of the Parkersburg center, and she worked closely with him. Her responsibilities
included, as relevant here, reviewing sales orders for accuracy and completeness. As she
testified, she would “look at the progress notes to make sure that [the] piece of equipment
[being ordered] would be covered [by insurance] based on what the physician had
documented in their progress note” before submitting the order for approval. If the
progress note did not “contain all the information that would be needed for approval by
Lincare,” Balderson was trained to “educate the physician on what was missing and what
was needed to get [the] order completed.” When Balderson was out of the office, Brady
sometimes filled in and performed this review process, although that task was not part of
his normal duties. Brady did not have sales responsibility and, accordingly, did not earn
commissions.
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In furtherance of its corporate compliance program, Lincare conducted a voluntary
internal audit of the Parkersburg center in May 2019. That audit revealed, among other
things, that the files for 19 patients for whom ventilators had been ordered contained a
handwritten progress note, signed and dated by a physician, with a nearly identical
statement of why the ventilator was medically necessary. Specifically, while the top
portion of each progress note had a different patient’s name and identifying information,
the body of each note appeared to be “cloned” or a “template,” stating exactly or nearly
exactly:
Patient is diagnosed with chronic respiratory failure consequent to COPD.
BIPAP was tried and failed. The ventilator is required to decrease work of
breathing, improve pulmonary status and interruption of respiratory support
could lead to serious harm, decline in health status, worsening of condition,
increase risk of increasing CO2 retention, untimely readmissions, or death.
The results of this audit were reported to Pedersen, who, as Lincare’s Chief
Compliance Officer, undertook an investigation to discover the source of the “handwritten
cloned notes found in patient records that had been submitted to Lincare” for the purchase
of ventilators. One patient’s file, in particular, led to the answer. It showed that after
receiving a ventilator order from the physician for that patient, Balderson concluded that
the order did not have the required documentation needed for approval. In response, she
sent a fax to the physician’s office on May 2, 2019, with a cover sheet that stated:
– I need face to face notes within the last 6 months that mention [the
patient’s] COPD [diagnosis] and chronic respiratory failure [diagnosis]
– I need the attached statement added or the progress note signed, dated,
and timed with patient’s name and [date of birth] added also
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– The Trilogy [ventilator] order was missing a few things. I added. Just
need [the doctor] to sign [and] date.
Attached to that fax was (1) an unsigned, handwritten progress note on which the patient-
information section was blank, and (2) a typewritten statement with a caption stating,
“Sample documentation for Trilogy/Astral.” Both of these documents contained
essentially the same boilerplate language as the other progress notes identified by the audit.
The patient’s file showed that later on that same day — May 2, 2019 — the physician
signed and dated the handwritten template progress note that Balderson had sent and added
the patient’s identifying information. The physician also signed the revised order form and
had these documents, as well as records from the patient’s recent office visits, faxed back
to Balderson. Moreover, while the diagnostic codes that the physician included on the
original order form were codes for COPD and chronic respiratory failure, the patient’s
office-visit records did not clearly reflect those diagnoses. Instead, they indicated a
“[p]rimary diagnosis” of “[r]estrictive ventilatory defect,” as well as a diagnosis for
obstructive sleep apnea. On reviewing these documents, Pedersen concluded that the
template progress note that the doctor had signed at Balderson’s suggestion was not
supported by, and indeed was “contradict[ed]” by, the patient’s medical records. Pedersen
therefore concluded that Balderson had “violated the [company’s compliance] program by
sending these documents to the physician.”
Continuing the investigation, Pederson — together with Sandra Moreau, Lincare’s
Healthcare Services Manager, and Sheila Kalteux, Lincare’s Senior Corporation Counsel
— traveled from Florida to the Parkersburg center on June 3, 2019. There, they met with
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Balderson and Brady, as well as other local Lincare employees. When Balderson met with
the three senior Lincare officials, she acknowledged using the handwritten template
progress notes to make it easier for the physicians she worked with to order ventilators for
their patients, and she provided Pedersen with 17 such notes that had been in her sales
binder. Each note had a header for one of two physician offices with which Balderson
worked. The patient-information section on each of these forms was blank, but each
contained the same generic statement of medical necessity that was included in the 19
completed notes uncovered earlier during the audit. Balderson later acknowledged that she
had “instructed each physician to include” the language “so that their [ventilator] orders
would get approved.”
During the course of the Parkersburg investigation, Pederson also learned that Brady
had provided “coaching” or “leading” information to physicians by sending physicians a
document entitled “Good Chart Notes Examples.” That document provided three examples
of statements sufficient to support a ventilator order:
Patient evaluated for COPD. Cough has been getting worse over the past 5
years. Patient has established diagnosis of COPD & Chronic Respiratory
Failure. Patient requires home ventilator 24/7 to sustain life.
Patient presents with a history of COPD. This has been a problem for some
time. It is associated with dyspnea on exertion. Nothing seems to improve
his/her cough. His/her medication history is remarkable for COPD &
Chronic Respiratory Failure. Patient requires home ventilator therapy to
sustain life.
Patient has a long-standing history of COPD resulting in Chronic Respiratory
Failure. He/She has chronic elevations of his/her CO2 levels. CPAP/BIPAP
has been tried but does not lower the CO2 levels in his/her blood. Because
of his/her condition, I feel that home ventilator therapy is required for his/her
condition to sustain life.
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Pederson further learned that some physicians had used the language suggested by Brady
in substantially similar form. Finally, she learned that Brady had provided “free
equipment” to a patient because he failed to “follow the standard protocol for replacing
equipment [lost in a fire] so that it could be billed to the patient’s payor.”
At the end of the June 3 investigatory visit, Pedersen made the decision to terminate
Balderson’s employment for violating Lincare’s corporate compliance program based on
her use of the template progress notes. At a meeting with Balderson, Brady, Moreau, and
Kalteux, Pederson informed Balderson that her employment was being terminated for
“leading” physicians. Pederson later testified that use of such template notes had “always
resulted in termination” in the past. Indeed, she said specifically that she had “discharged
a male [employee] . . . pretty close . . . in time to when Ms. Balderson was discharged”
based on his use of template notes. Pederson also explained why the conduct represented
such a serious infraction, testifying that because “Medicare administrative contractors
really caution physicians . . . about not having these templates, [particularly] if the
documentation is only there to support reimbursement,” the use of the template progress
notes can “put a physician’s practice at risk” and can also result in “contradictory
information” being introduced into a patient’s medical record.
By contrast, Pedersen decided not to terminate Brady’s employment. Instead, she
gave him a “final written warning,” which stated, “This final written warning is being
issued to you because you violated Lincare’s policies as they pertain to the Healthcare laws
and regulations. You wrote information on a fax to a physician that could be considered
coaching or leading information. It was also determined that you provided free
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equipment.” In explaining why she punished Balderson and Brady differently, Pederson
stated that she determined that Brady’s violation “did not rise to the magnitude” of
Balderson’s. As she explained:
The difference between the example notes and the cloned progress notes is
that the cloned notes were . . . used for a physician to add to a . . . specific
patient’s record. The [good] chart note examples provide information to a
physician about the type of information that should be included in a progress
note if most payers are going to reimburse for that service. . . . [T]hese chart
note examples are just information to provide to the physician of things that
could be included if applicable to that patient. That’s not to say that this was
right. We have educational brochures that could have been used instead of
this.
After terminating Balderson’s employment, Lincare hired a woman to serve as the
new sales representative for the Parkersburg market area.
Balderson commenced this action against Lincare in West Virginia state court in
August 2019, on her own behalf and on behalf of others similarly situated, alleging that
Lincare had violated the West Virginia Patient Safety Act and the West Virginia Wage
Payment and Collection Act. After Lincare removed the action to federal court on the basis
of diversity jurisdiction, Balderson added a claim under the West Virginia Human Rights
Act for discrimination on the basis of sex and dropped her class allegations.
The district court granted Lincare’s motion for summary judgment on all claims
except for the discrimination claim, and with respect to that claim, it conducted a bench
trial in October 2020. By a memorandum opinion dated June 7, 2021, the court granted
judgment to Balderson and awarded her $30,141 in compensatory damages and $120,000
in punitive damages, as well as attorneys fees and costs.
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In conducting its analysis under the West Virginia Human Rights Act, the court
employed the burden-shifting analysis used in federal Title VII cases, as required by West
Virginia law. See, e.g., Barefoot v. Sundale Nursing Home, 457 S.E.2d 152, 159–60 (W.
Va. 1995). The district court held that Balderson had established a prima facie case, finding
(1) that, as a female, she was a member of a protected group; (2) that she was discharged
from her employment; and (3) that a male employee — Brady — was disciplined less
severely than her, even though “both engaged in similar conduct.” The court recognized
that Balderson had to support the inference of discrimination by showing that Brady was
similarly situated to her in all relevant respects, and it found that Brady was indeed “an
appropriate comparator,” as “[t]heir relevant conduct [was] nearly indistinguishable.” It
observed that “Lincare’s attempt to distinguish the two by characterizing Mr. Brady’s
conduct as providing [only] ‘examples’ [was] merely semantics.” The court thus
concluded that Balderson had “proved her prima facie case of gender discrimination based
on disparate treatment.”
Next, the court found that even though Lincare had “articulated a legitimate, non-
discriminatory reason for Ms. Balderson’s discharge from employment” — namely, that
she violated the company’s compliance program — that reason was pretextual because
“Lincare’s explanation [was] simply not credible.” To reach that conclusion, the court
gave three reasons. First, it observed that Lincare had “shifted its justification” for firing
Balderson over the course of the litigation, stating first that it had fired Balderson because
she was “leading” physicians and then stating later that it fired her for “[m]isrepresenting
a diagnosis or falsifying documents” based on the fax cover sheet she had sent to a
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physician’s office. Second, the court found that Lincare’s argument that Balderson’s
conduct “could have violated or actually did violate various healthcare laws” was belied
by the fact that Lincare had failed to report her conduct to the U.S. Department of Health
and Human Services, as it was required to do under a Corporate Integrity Agreement with
the agency. Finally, and most “critical” according to the court, it found that pretext was
demonstrated by the difference in Lincare’s discipline of Brady and Balderson, despite the
fact that Brady’s conduct was “at least comparable.”
Having concluded that Balderson had established a prima facie case and that
Lincare’s response was “merely pretextual,” the court found by a preponderance of the
evidence that Lincare’s “disparate treatment between Ms. Balderson and Mr. Brady was a
result of discriminatory animus.” In reaching this conclusion, it stated 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, citing St. Mary’s Honor Center v. Hicks, 509 U.S. 502, 510–11 (1993), and
Jiminez v. Mary Washington College, 57 F.3d 369, 378 (4th Cir. 1995). The court stated
that “the only difference between Mr. Brady’s situation and Ms. Balderson’s is that Mr.
Brady is male and that Ms. Balderson is female” and therefore, it reasoned, their different
punishments could only be explained by the difference in their sex.
From the district court’s judgment, Lincare filed this appeal. Balderson filed a
cross-appeal, challenging the amount that the district court awarded her in compensatory
damages.
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II
Lincare contends that the district court clearly erred (1) in concluding that a
“similarly-situated male” was treated differently than Balderson and, in any event, (2) in
disregarding evidence that Balderson’s termination “had nothing to do with gender
discrimination” but instead was a business judgment made to enforce its compliance
program. In essence, these challenges focus on (1) the requirement that, as an element of
the prima facie case for discriminatory treatment, Balderson show that Brady was a
comparator similarly situated to her “in all relevant respects” and (2) the ultimate
requirement that to prove her claim, Balderson show, at least by inference, “discriminatory
animus” — that is, the intent to discriminate because of sex.
The West Virginia Human Rights Act makes it unlawful “[f]or any employer to
discriminate against an individual with respect to . . . tenure . . . if the individual is able and
competent to perform the services required.” W. Va. Code § 5-11-9(1). The term
“discriminate” is defined by the Act to mean “to exclude from, or fail or refuse to extend
to, a person equal opportunities because of . . . sex,” or another prohibited ground. Id. § 5-
11-3(h). The Supreme Court of Appeals of West Virginia has held that cases brought under
the Act are “governed by the same analytical framework and structures developed under
Title VII” of the Civil Rights Act of 1964, including the same “burden-shifting . . .
framework for analyzing pretext claims.” Barefoot, 457 S.E.2d at 159–60 (citing St.
Mary’s Honor Ctr., 509 U.S. 502, and others). As the Barefoot court outlined, following
the Supreme Court’s Title VII cases, the “plaintiff must first create an inference of
discrimination by establishing a prima facie case.” Id. at 160. “The burden of production
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then shifts to the defendant to proffer a legitimate, nondiscriminatory reason for the
challenged employment action.” Id. “Finally, the plaintiff then is accorded an opportunity
to demonstrate that either age, gender, or ancestry was a determinative factor in the
defendant’s employment decision or the defendant’s articulated rationale was merely a
pretext for discrimination.” Id.
The U.S. Supreme Court in Reeves v. Sanderson Plumbing Products, Inc., 530 U.S.
133 (2000), explained the holding of St. Mary’s Honor Center in more detail:
There [in St. Mary’s Honor Center] we held that the factfinder’s rejection of
the employer’s legitimate, nondiscriminatory reason for its action does not
compel judgment for the plaintiff. The ultimate question is whether the
employer intentionally discriminated, and proof that “the employer’s
proffered reason is unpersuasive, or even obviously contrived, does not
necessarily establish that the plaintiff’s proffered reason is correct.” In other
words, “it is not enough to disbelieve the employer; the factfinder must
believe the plaintiff’s explanation of intentional discrimination.”
Id. at 146–47 (cleaned up) (quoting St. Mary’s Honor Ctr., 509 U.S. at 524, 519).
The district court purported to follow this structure but, we conclude, erred both
factually and legally. First, it clearly erred in concluding that the conduct of Balderson and
Brady was “nearly indistinguishable.” Second, it erred in concluding that because it had
found that at least some of Lincare’s proffered reasons for firing Balderson were false,
those reasons were necessarily a pretext for the real reason of discriminating on the basis
of sex. And finally, it erred in concluding that Balderson had carried the burden of
demonstrating intentional discrimination, especially because Balderson herself denied that
anything was ever said or done to make her think at the time that her gender had played
any role in her employment or in the termination of her employment. On this last point,
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the court proceeded from the premise that if Balderson proved both a prima facie case and
that the reasons given by Lincare were pretextual, then unlawful discrimination must
automatically follow. Reeves, however, specifically rejected that reasoning.
Without the need to address whether the district court clearly erred in finding that
Balderson had established a prima facie case and that Lincare’s proffered reasons were
false, we conclude that the Reeves error is dispositive. Specifically, the district court
assumed that because it had found (1) that Balderson had proved a prima facie case of
disparate treatment and (2) that Lincare’s explanation was not credible, it necessarily
followed that it was permitted, without more, to “infer the ultimate fact of sex
discrimination.” This legal analysis failed to faithfully apply the Supreme Court’s
prescriptions, as incorporated into West Virginia law.
In Reeves, the Supreme Court specifically addressed the question of “whether a
plaintiff’s prima facie case of discrimination . . . , combined with sufficient evidence for a
reasonable factfinder to reject the employer’s nondiscriminatory explanation for its
decision, is adequate to sustain a finding of liability for intentional discrimination.” 530
U.S. at 140. The Court’s conclusion was that such a showing may be sufficient but that it
is not necessarily so — it depends on the circumstances. The Court thus recognized that
while there will be cases in which the “trier of fact [can] infer the ultimate fact of
discrimination” from the combination of the plaintiff’s prima facie case and “the
factfinder’s disbelief of the reasons put forward by the defendant,” id. at 147 (cleaned up),
it does not follow that “such a showing by the plaintiff will always be adequate to sustain
a [factfinder’s] finding of liability,” id. at 148. Instead, the Court observed, there will
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“[c]ertainly . . . be instances where, although the plaintiff has established a prima facie case
and set forth sufficient evidence to reject the defendant’s explanation, no rational factfinder
could conclude that the action was discriminatory.” Id. (emphasis added).
The district court failed to recognize this possibility and to address it in light of the
circumstances presented. Had it done so, it would have been compelled to conclude that
Balderson’s case was one of the type recognized in Reeves, in which a prima facie showing
of a similar comparator, combined with reasons to doubt the employer’s explanations, is
not sufficient to support a finding on the “ultimate” issue — the employer’s discriminatory
intent. Here, while Balderson had presented sufficient evidence to prove that Lincare’s
decision to terminate her employment was unwise and even unfair, she failed at any stage
to provide a basis for inferring that her discharge had anything to do with her sex. In
nonetheless holding Lincare liable, the court summarily concluded that Balderson had
proved “discriminatory animus” because she and Brady were disciplined differently and
“Mr. Brady is male [while] Ms. Balderson is female.” This truncated reasoning was not
sufficient to support a conclusion that Lincare intentionally discriminated against
Balderson because of her sex.
Balderson presented no evidence, explicit or implied, that would allow a factfinder
to find that sex played any role in Lincare’s decision to terminate her employment. In her
trial testimony, Balderson herself agreed that in her experience at Lincare before her
termination, sex was never an issue — that “[n]o one ever made any gender-related
comments directed at [her].” She also testified that during the termination process, which
involved Pederson’s interview of her and a meeting with Brady, Pederson, and two other
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senior Lincare officers, there was nothing “about [their] conduct that led [her] to believe
that they were treating [her] differently because of [her] gender.” Moreover, Pederson and
her two colleagues who conducted the investigation leading to Balderson’s termination
were all female, and Lincare hired a female to replace Balderson. In short, there was no
evidence that would permit the inference that gender was at play at any point during
Balderson’s employment and the process of her termination. Yet, as Reeves makes clear,
“although intermediate evidentiary burdens shift back and forth,” Balderson retained “the
ultimate burden” to establish that Lincare intentionally discriminated against her on the
basis of sex. Reeves, 530 U.S. at 143 (cleaned up). “In other words, it is not enough to
disbelieve the employer; the factfinder must believe the plaintiff’s explanation of
intentional discrimination” — in this case, that Lincare fired Balderson because of her sex.
Id. at 147 (cleaned up).
Not only was the record bare of evidence that Balderson’s sex played a role in her
termination, the district court clearly erred in finding, as the core of its cursory analysis,
that the two employees’ circumstances were “nearly indistinguishable.” Based on that
finding, the court essentially reasoned that the disparity of their punishments could only be
explained as sex discrimination. That finding, however, does not fit the facts.
While Brady and Balderson engaged in similar conduct in providing “leading”
information to physicians, it is just not the case that the “only difference” between them
was sex. Balderson was a sales representative who, because she earned the majority of her
compensation from commissions, had a direct financial incentive to increase her sales as
much as possible, including by reducing any friction in a sale’s being completed.
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Moreover, under the agreement between Balderson and Lincare governing her receipt of
commissions, she could only receive such payments if she “personally obtain[ed] all . . .
billing pre-requisites” necessary for Lincare to receive payment from the patient’s
insurance provider, including a statement from the doctor explaining why the product was
medically necessary. And, as a normal part of her job duties, when the Parkersburg center
received a ventilator order from a physician’s office, Balderson was charged with
“review[ing] [the] order for accuracy and completeness” and “look[ing] at the progress
notes to make sure that [the] piece of equipment would be covered [by insurance] based on
what the physician had documented in their progress note” before submitting the order for
approval. If a progress note did not “contain all the information that would be needed for
approval by Lincare,” Balderson had been trained to “educate the physician on what was
missing and what was needed to get [the] order completed.”
By contrast, Brady’s job description made clear that, as the Parkersburg center’s
manager, he did not have “sales responsibility” and, consistent with that, he did not earn
commissions. Moreover, while Brady would sometimes review ventilator orders for
completeness if Balderson was out of the office, that only happened “one or two times
every [two or] three months,” and conducting such a review was not “part of [his] normal
job duties.”
In addition to this major difference with respect to their respective job
responsibilities and the nature of their positions, the conduct for which they were
disciplined also differed. During Pedersen’s investigation of the origin of the cloned notes
found in 19 patient files, Balderson admitted that she had regularly been using the
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handwritten template progress notes for some one-and-a-half to two years prior to her
termination, knowing that the template notes would be added directly to patient files once
they were signed by the physician. Pederson later testified that by sending such notes to
physicians, Balderson had “significantly . . . put [the] physician[s’] practice at risk.” In
addition, she indicated that the use of such notes also increased the risk of inaccurate
information being introduced into the documentation used to justify payments from
insurance companies and the government. Brady, on the other hand, was found to have
sent physicians a page with three different “Good Chart Notes Examples.” (Emphasis
added). While Brady likely should have foreseen that some physicians would use the
language from those examples “in a substantially similar form,” as the investigation indeed
revealed had been done, Brady, as the district court noted, “never intended physicians to
use his example language as a ‘word-for-word copy/paste’ template.” Yet, it was
undisputed that Balderson had that exact intent, and she actually kept copies of blank
template notes in her possession with the intent to facilitate physicians’ use of them.
Thus, although the district court concluded that Brady’s and Balderson’s relevant
conduct was not just similar but “nearly indistinguishable” and even “the same,” the record
and the court’s own underlying findings do not support that conclusion. As such, that
finding, which lay at the heart of the district court’s analysis, was clearly erroneous. Under
the facts as proved, Lincare could have reasonably concluded — as Pedersen testified that
she had concluded — that the difference between the two practices was material.
Moreover, even if the district court was convinced that Balderson’s and Brady’s conduct
was so similar that fairness required them to receive the same discipline, the question for
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the court was not whether Lincare had made a good, equitable, or even fair decision. It
was instead whether the actual reason for their disparate discipline was that Balderson was
a woman and Brady was a man.
While Balderson may have made a case that Lincare’s decision to fire her was a
poor one and not in the best interests of the company — a proposition with which we might
agree, especially in view of the fact that Balderson was such a valuable producer for the
company and the incident in this case was her first infraction — that does not lead to the
conclusion that Balderson was discharged because of her sex. Because there is no evidence
to support that finding, we reverse the judgment of the district court.
REVERSED
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