In the case of David L. Duvall vs. Novant Health Inc., a significant legal battle unfolded that brings to light crucial lessons for employers on managing diversity initiatives and termination decisions. After a week-long trial, a North Carolina jury found that Novant Health Inc. unlawfully terminated David Duvall because of his race, sex, or both, in violation of Title VII of the Civil Rights Act of 1964. The jury awarded Duvall $10 million in punitive damages, although this was later reduced to the statutory maximum of $300,000 by the district court. Additionally, Duvall was granted back pay and front pay, despite Novant Health’s opposition based on claims of failure to mitigate damages.
The Background
David Duvall, a white man, was hired by Novant Health in 2013 and served as Senior Vice President of Marketing and Communications until his termination in July 2018. Duvall’s performance was reportedly exceptional, earning him strong performance reviews and national recognition for the marketing program he developed for Novant Health. Despite this, he was abruptly fired by Jesse Cureton, a black man and Executive Vice President and Chief Consumer Officer of Novant Health, who told Duvall the company was “going in a different direction.”
Novant Health then elevated two of Duvall’s deputies, a white woman and a black woman, to take over his duties, and later hired another black woman to permanently replace him. Duvall sued Novant Health, claiming his firing was to achieve racial and gender diversity targets, in violation of Title VII and North Carolina state law.
The Court’s Analysis
The court found sufficient evidence to sustain the jury’s finding of liability, indicating that Duvall’s race, sex, or both were motivating factors in Novant Health’s decision to terminate him. However, it vacated the jury’s award of punitive damages, concluding that while Novant Health did unlawfully and intentionally discriminate against Duvall, there was insufficient evidence to prove that the employer discriminated “in the face of a perceived risk that its actions will violate federal law.”
Additionally, the court upheld Duvall’s entitlement to back pay and front pay, rejecting Novant Health’s argument that Duvall failed to mitigate his damages by not sufficiently seeking new employment.
Lessons for Employers
This case underscores several critical lessons for employers:
- Documentation and Performance Reviews: Employers must maintain thorough documentation of performance issues and the reasons for termination decisions. The absence of documented criticisms in Duvall’s case significantly undermined Novant Health’s position.
- Diversity and Inclusion Initiatives: While diversity and inclusion are important goals, this case illustrates the legal risks associated with termination decisions that appear to be made to meet diversity targets. Employers must ensure that such initiatives are implemented in a way that complies with federal anti-discrimination laws.
- Consistency in Rationale for Termination: Employers should provide consistent reasons for termination decisions. In Duvall’s case, Cureton offered shifting and conflicting explanations, which the court found indicative of pretext for unlawful discrimination.
- Mitigation of Damages: The case highlights the importance of the plaintiff’s duty to mitigate damages and the employer’s burden to prove failure to mitigate. Employers contesting back pay or front pay awards must provide evidence that comparable work was available and that the plaintiff did not seek it out.
The David L. Duvall vs. Novant Health Inc. case serves as a cautionary tale for employers, emphasizing the importance of transparent, well-documented, and legally compliant HR practices, especially in the context of diversity and inclusion initiatives and termination decisions. Employers should take proactive steps to ensure that their actions are both equitable and legally defensible to avoid similar legal challenges.
