With apologies to Shakespeare, the above version of his oft-quoted passage is a good reflection of what not to do when carrying out Diversity, Equity and Inclusion initiatives, as a North Carolina healthcare conglomerate learned the hard way – to the tune of $2,457,527 in backpay, $1,078,066 in front pay, $332,793 in prejudgment interest, and $399,105 in attorney fees.

In Duvall v. Novant Health, Inc., Case No. 22-2142 (4^th Cir. 2024), David Duvall, a white man, worked as Senior Vice President of Marketing and Communications for Novant Health, a multibillion-dollar company. He reported directly to the Executive Vice President and Chief Consumer Officer, Jesse Cureton, a black man. According to the evidence at trial, Duvall was an exceptional employee, with no record of any criticism of his work, strong performance reviews and national attention for the marketing program he developed.  

In 2015, Novant developed and implemented a “Diversity and Inclusion Strategic Plan,” which consisted of three parts:  Phase 1, “Learn and Engage,” to assess Novant’s D & I culture, benchmark its D & I levels, and get Novant’s board and leadership to use D & I in its decision-making; Phase 2, “Develop and Influence,” to set goals to “embed diversity and inclusion” throughout the corporation and commit to “adding additional dimensions of diversity to the executive and senior leadership teams”; and, Phase 3, “Leverage,” to evaluate the process toward embedding D & I and implement strategies to close identified gaps.

In July 2018, Cureton called Duvall into his office and fired him, telling him that Novant was “going in a different direction.” He then distributed Duvall’s duties to two women, one white and one black, and eventually replaced him with a black woman, who was one of three finalists for the position, all black women. At approximately the same time, Cureton also fired the Senior Vice President of Business Strategy, a white male, and replaced him with a black male, and fired another white man, eliminating his position and redistributing his duties. During the course of the D & I initiative, Cureton went from seven white male direct reports in 2018, to two in 2019, to one in 2020, to none in 2021, effectively eliminating all seven of the white males that reported to him.

Duvall filed a claim under Title VII, contending that Novant terminated his employment because of his race, sex or both. The jury found in his favor, finding that Duvall’s race and/or sex a motivating factor in the decision to discharge him, and awarding him the above-referenced damages, including $10 million in punitive damages that the court later reduced to $300,000, the statutory maximum. Novant appealed.

Reviewing the evidence in support of the jury’s verdict on appeal, the Fourth Circuit first noted the context in which the discharge decision occurred; specifically, the D & I initiative to “embed diversity and inclusion throughout” the company and ensure that its leadership “reflected the communities it served,” as well as its finding that white males were overrepresented in the company’s leadership. This fact, coupled with evidence of Duvall’s stellar performance, the race and sex of his replacements and similar actions taken against other white executives, allowed the jury to “consider this evidence as suggestive of a calculated moves to increase diversity among Novant Health’s senior leadership by removing white men.” It also did not help that Novant provided shifting, conflicting and unsubstantiated explanations for Duvall’s termination. The appellate court found this evidence “more than sufficient” to support the jury’s finding of discrimination, but set aside its award of punitive damages, finding no evidence to demonstrate that Cureton acted with reckless indifference to Duvall’s federally-protected rights.

The moral of this story: DEI initiatives are laudable, but diversity cannot be achieved at the expense of employees who do not fall within its goals or by targeting them on the basis of their race or sex. 

Questions? Contact Alan Seneczko in our Oconomowoc office by email or at 262-560-9696.