White NC hospital executive fired because of Novant’s DEI plans, appeals court rules

A white N.C. hospital executive was discriminated against following implementation of a diversity and inclusion plan, a federal appeals court ruled.

Fourth Circuit appeals court judges upheld a Charlotte jury’s decision that David Duvall was wrongly fired from Novant Health in 2018 to make room for Black and female employees. As a result, he’ll receive millions of dollars for damages, back pay, interest and benefits. His attorney described the award as one of largest employment law judgments in North Carolina history.

“Novant Health—a multibillion-dollar company with tens of thousands of employees and an extensive human resources department—had no record of any documented criticism of Duvall’s performance or reasons for his termination,” said the three-judge panel’s opinion released Tuesday.

The judges called Novant’s request to reconsider evidence “unconvincing” and opposed its suggestion that “the only conclusion a reasonable jury could have reached” would favor the Winston-Salem based hospital.

“Quite the opposite,” wrote Circuit Judge G. Steven Agee.

After Duvall was fired, two women — one white, one Black — took over his duties. Novant later hired a Black woman to permanently replace him, according to court documents.

The panel, which also included judges A. Marvin Quattlebaum and Henry Floyd, did rule in favor of Novant in one regard: punitive damages, which is money defendants pay when their conduct is found to be malicious.

Duvall and his attorney did not prove his boss was aware of laws forbidding discriminatory practices. That cannot be presumed — it must be proved, according to the panel.

DEI lawsuits

The ruling, which comes amid increased scrutiny of corporate diversity initiatives, was “a long, long battle,” said Luke Largess, Duvall’s lawyer, but it was never one rooted in disdain for diversity or aimed at a launch into politics.

Conservative groups say diversity, equity and inclusion programs — or DEI — create unlawful bias against white and male workers, and Florida Gov. Ron DeSantis recently banned DEI funding in public colleges.

“He’s no right-wing avatar, “ Largess said of Duvall. “He was a big supporter of DEI (at Novant), but no matter what side of the political spectrum you fall, you can’t fire someone for a diversity goal and no other reason.”

Novant Health said it was disappointed and disagrees with the ruling.

“We firmly stand by our commitment to diversity and inclusion and to assuring equal employment opportunities to all of our current and prospective team members,” wrote a Novant spokesperson in an email.

Duvall, the former senior vice president of marketing and communications, will still receive about $4 million in damages, back pay, interest and benefits. But the judges’ ruling lost him $300,000 in punitive damages. A Charlotte judge had earlier shrunk the $10 million a jury awarded Duvall down to the federal cap of $300,000.

Did Novant executive know federal laws?

Duvall worked at Novant for nearly five years before he was fired by Executive Vice President Jesse Cureton, who is Black. It was one year after Novant adopted a diversity and inclusion plan.

The Fourth Circuit said Novant’s “shifting, conflicting, and unsubstantiated explanations for Duvall’s termination” supported claims that he was targeted as part of its diversity push, which ousted several other white executives as women and minorities rose to senior leadership roles.

Judge David Cayer, who presided over the original case and refused Novant’s request to throw out all punitive damages, said it would be “unreasonable to infer that Cureton was ignorant of federal anti-discrimination laws.”

“A reasonable juror could infer that Cureton, as a high-level executive at a large corporation, had knowledge of federal anti-discrimination laws, understood the goals of the D&I Program, and was willing to terminate a white male in order to advance diverse candidates and promote Defendant’s clearly stated goal to promote diversity and inclusion,” he wrote.

The Court of Appeals disagreed Tuesday, saying Largess offered no evidence of Novant Health’s or Cureton’s training to establish the requisite knowledge of federal anti-discrimination law.

Largess, even while cross-examining Cureton, never established his personal knowledge of federal anti-discrimination law, “let alone that he perceived a risk that (Cureton’s) decision to fire Duvall would violate it,” Agee added.

Despite the court of appeals’ interpretation, Duvall said he is grateful.

“A unanimous panel of appellate court judges gave me a voice against a powerful employer,” he wrote in a statement. “... Sadly, it is with the slimmest of odds that employees get their day in court, let alone prevail. I hope my nearly six-year journey is helpful to others who lose their livelihood unfairly.”

In 2018, Novant had about 30,000 employees. It now has nearly 40,000 across North Carolina and South Carolina. In 2022, it operated on $7.5 billion in revenue, its website states.

“We continue to believe having a workforce that reflects the communities we serve allows us to provide the personalized care our patients need to reach their best possible health,” the company said.