Date: 04-16-2024

Case Style:

Teresa Boelte v. Southstone Behavioral Health

Case Number: 4:22-cv-00127-TTC

Judge: Thomas T. Cullen

Court: United States District Court for the Western District of Virginia

Plaintiff's Attorney: Philip Bruce Baker

Defendant's Attorney: Flynne M. Dowdy, Justin Michael Sizemore, Mark Warfield Peters

Description: Danville, Virginia civil rights lawyer represented the Plaintiff who sued on an Americans With Disability Violation theory claiming $350,000 in damages.

In May of 2019, Plaintiff Teresa Boelte (“Boelte”) was injured in a workplace accident and, as a result, began receiving workers' compensation benefits. Sometime later, her employer, Defendant Southstone Behavioral Health (“Southstone”), installed a new CEO, Stephanie Knowles, who-Boelte claims-terminated her because she was receiving those benefits. She contends the CEO's decision to terminate her violated federal disability protections, the Virginia Human Rights Act (“VHRA”) and/or Virginia's public policy against such discriminatory actions (a so-called Bowman claim), and Virginia law prohibiting retaliatory discharge. Southstone has moved for summary judgment on Boelte's claims, but because there is a material factual dispute over the reason for the CEO's decision to terminate her, Boelte's discrimination and retaliatory discharge claims will proceed to trial.

I. Statement of Facts and Procedural Background

Southstone is a residential behavioral health facility for adolescents. Boelte, who is a registered nurse, began working at Southstone in February 2018; approximately three months later, she was promoted to Director of Nursing. (See generally Dep. Teresa Boelte 70:7-14, 72:12-21, Ex. 12, June 28, 2023 [ECF No. 22-1].)

In her new role, Boelte was “to make sure there was staffing at all times at the facility, to ensure that the residents were taken care of, compliance, [and] safety. [She] was in charge of infection control at the time as well.” (Id. 74:13-16.) The relevant job description also listed other responsibilities, including “[e]nsure nursing services are provided in compliance with the laws and regulations of federal, state, and local government agencies,” ensure that “[s]tandards are met for accrediting agencies,” and “[o]versee nursing services documentation to ensure it meets all standards.” (Id. Ex. 11.) From the time she was hired as Director of Nursing until CEO Stephanie Knowles was hired, Boelte did not have any documented employment issues. She did, however, suffer a work-related injury to her lower back in May 2019, for which she qualified for Workers' Compensation. (See, e.g., Pl.'s Br. in Opp. Ex. B [ECF No. 26-2].)

In the summer of 2020, as part of its license to provide Medicare and Medicaid-related services, Southstone was subjected to an “audit” by the Virginia Department of Health. As a result of that audit, Southstone was cited for non-compliance with medication administration and documentation requirements. (Dep. Stephanie Knowles 33:22-25; 34:1-24, Aug. 2, 2023 [ECF No. 22-2].) Although she was not CEO at the time of the audit, as Knowles recalls the citations, Southstone had failed to fulfill a prior “plan of correction” issued by the VDH, and its 2020 citations indicated ongoing deficiencies in those areas. (Id. 35:9-14.)

In November 2020, Southstone hired Knowles as its new CEO. Shortly after she started, Knowles and Boelte had a conversation regarding Boelte's duties and how she “shouldn't have had so many roles [at Southstone] because it was too much, so [Knowles] was going to try to take away” some of her responsibilities. (Boelte Dep. 99:6-9.) They also discussed the restraint procedures and attendant documentation issues at Southstone. Occasionally, for either staff or patient safety, patients need to be restrained. Consistent with state law and licensing requirements, when a patient is restrained, certain procedures must be followed and certain forms must be completed. At the time Knowles came on board as CEO, Southstone was using restraint paperwork that the prior CEO had “put into effect.” (Id. 99:14-15.) But both Boelte and Knowles recognized that this paperwork was not compliant with applicable regulations. Knowles told Boelte that she “was making changes” to the paperwork, and Boelte reminded her of several of the requirements. (Id. 99:16-21.)

At some point after Knowles started as CEO, she, Boelte, and Mary Beth Wilkerson, a Human Resources (“HR”) representative for Southstone, met in private following the daily morning staff meeting. (See Dep. Mary Beth Wilkerson 18:22-19:5, Sept. 6, 2023 [ECF No. 22-3].) At this impromptu gathering, Knowles asked Wilkerson to provide her with a list of individuals who were on workers' compensation and how long they had been receiving those benefits. (Id. 19:15-18.) Apparently, Knowles told Wilkerson that she “needed the list to know who needed to be let go”:

The former HR Director, Danielle Potter, had recently left Southstone and her replacement had not yet been hired. (Boelte Dep. 125:11-15.)

Q When you said that Miss Knowles said that she needed the list to know who needed to be let go, what do you mean by “who needed to be let go”?

A That's all she said to me. I took it as to who needed to come off workers' comp or who needed to settle their workers' comp. Who needed to not be a liability.

Q What do you mean by that?

A I mean, you know, been on workers' comp for so long. You can look at it in several different ways, but when she said in order to know who to let go, that first thing I thought about what who to let go from employment. Now, who had been on it for so long and who needed to be let go.

(Id. 21:11-24.) According to Boelte, Knowles said “corporate” asked for the information and she needed it “to figure out who is going to be staying and who's going to be going.” (Boelte Dep. 158:14-17.) Neither Boelte nor Wilkerson know if any such list was ever provided to Knowles. For her part, Knowles does not recall any such conversation and disputes having made any such statements. (Knowles Dep. 72:2-7.)

In December 2020, Knowles completed Boelte's Annual Performance Review. (See Boelte Dep. Ex. 12.) In that evaluation, Knowles rated Boelte as “meets” or “exceeds” expectations in every category. Her overall rating, 3.2 out of 5, aligned with a general “Meets Expectations.” (Id. Ex. 12.) In the comments section of the evaluation, Knowles wrote:

Teresa has extensive knowledge as a nurse and supports the practices of nursing in the program. She serves as a primary liaison with the psychiatrist. She has been in this role for several years and has worked to develop a nursing team that can meet the needs of the youth and families served by the program. She has served as a primary resource for the organization during the pandemic assuring appropriate supplies and screening/monitoring of staff and youth is in place. As she continues in this role, focus will need to be on assuring that nursing protocols are in place and followed per policy and procedure. This includes the assurance that recent corrective actions related to medication administration and documentation that have been implemented and are sustainable. Over the course of the past year the team at Southstone has faced numerous challenges as they relate to the provision of services to youth and families that are evidenced in the issues related to corrective action plans (elopement, client safety, physical plant and provision of services). Teresa will need to continue to focus on identifying and implementing corrective actions and sustainable systems to support the improvements that are needed within the program.

(Id.) Knowles signed the evaluation on December 20, 2020. (Id. Ex. 12.) But Boelte did not review or sign the evaluation, and Knowles did not discuss it with her. (Id. 111:3-9.)

Although Boelte had returned to work after her work-related accident for which she was receiving workers' compensation benefits, in February of 2021 she was forced to undergo back surgery to repair damage caused during that workplace mishap. On February 23, she applied for medical leave under the Family and Medical Leave Act (“FMLA”) until April 2, 2021, which Southstone approved, and underwent surgery.

On or about March 21, 2021, while Boelte was out on leave, Southstone was subject to an unannounced certification survey by the VDH's Office of Licensure and Certification. Following the visit, a written report was prepared, outlining the various conditions that Southstone failed to meet. (See Boelte Dep. Ex. 24.) As it relates to the present dispute, during the evaluation, the surveyor noted that Knowles, who had only recently taken the position, was “aware of the failure by the prior CEO to meet regulatory requirements” related to restraining patients, and that “the facility was actively working toward meeting compliance and had revised the restraint policy in February 2021 and made substantial changes (including form changes) to how restraint was documented and carried out beginning March 1, 2021.” (Id.) Accordingly, the surveyor only reviewed “restraint episodes from March 1, 2021, to March 18, 2021.” (Id.) Of the 28 episodes of restraint during that period-all of which occurred while Boelte was on leave-“all twenty-eight (28) restraint episodes were deficient in at least one of the areas” reviewed by the surveyor. (Id.) Based on these noted deficiencies, Knowles claims that Southstone almost lost its status as a Medicaid provider. (Knowles Dep. 68:14-16.)

Southstone refers to this as the “PRTF Survey,” as it is a Medicaid Psychiatric Residential Treatment Facility certification survey.

On the same date as the VDH survey, Knowles prepared a Performance Improvement Plan (“PIP”) for Boelte based on the deficiencies uncovered during the VDH survey. In the explanation section of the PIP, Knowles wrote:

Detailed explanations of the reasons for commendation, Feedback or performance improvement planning: a review of documentation related to restraints in February 2021, it was discovered that the nursing department was not meeting all required documentation requirements per the CMS Conditions of Participation and corrective actions to address this practice were started by the CEO to address deficiencies with the intention of addressing the concerns with Teresa when she returned from leave. In March 2021, CMS Condition of Participation Survey was conducted at the facility. During the survey, it was confirmed that there were serious deficiencies occurring in the nursing department as they related to nursing functions surrounding restraints. A review of files from 2020 through February 2021 demonstrated that multiple policies that were in place were not being followed by the nursing department for which Teresa is responsible. Without the steps taken in March to demonstrate that plans were in place to address deficiencies that were present under Teresa's leadership, the program would have been in serious jeopardy or losing its status as a Medicaid provider. These issues included not assuring that physician orders were obtained for each restraint that was initiated, assuring that documentation related to the use of restraint was not complete comprehensive or contained all required elements, and allowing LPN's and CNA's to complete assessments of youth post restraint which is out of their Scope of practice and outside of policy. Review of policies and procedures indicate that there were clear expectations related to restraint and assessment of youth post-restraint that outlined the expectations as related to the Conditions of Participation and Teresa failed to assure that these policies were in place and in practice in her department. Due to the significance of the findings of the survey and the lack of follow through in assuring that policies and procedures were being followed within her department, Teresa will be removed from the Director of Nursing position at Southstone.

(Knowles Dep. Ex. 1.) The PIP was not delivered to Boelte. (Id. 52:14-15.) According to Knowles, she did not review the PIP with Boelte because Boelte “was on leave.” (Id. 41:2-3.)

Although Boelte was originally set to return to work on April 2, because she was still experiencing significant leg and back pain, her physician delayed her return to work at that time. (Boelte Dep. 140:13-15.) As such, Boelte requested to extend her FMLA leave until April 30, which Southstone approved. (See id. Ex. 18.) At a follow-up appointment on April 29, Boelte's physician recommended that she extend her leave until at least her next appointment, which was scheduled for June 10, 2021. (Id. Ex. 19.) So Boelte requested to extend her leave again. Southstone responded that her FMLA leave would only last until May 12 and that, if she needed additional leave beyond that (to the June 10 date recommended by her physician), she could request itas an accommodation. (See, e.g., id. Ex. 21.)

At some point before Boelte's FMLA leave expired, Knowles called her to inquire about her return to work and to ask whether she could come into the office on restricted duty:

A Stephanie Knowles had asked me - we were talking on the phone, and she said, Is there any way you can come back early before this.

And I explained to her what the doctor was concerned about, you know, getting reinjured, and that I just wasn't strong enough to go back as of yet.

And she said, Well, I really need you down working on the floor with the staff, with the nurses. I just really need you back here on the floor.

I said, Well, I'm sorry, but I just physically cannot do it at this time. ...

She had actually reached out because there was a situation going on about something on campus, and she had a question.

She had reached out also about the CARF certification.

And then the question she said, you know, Is there any way you can come back earlier.

(Boelte Dep. 149:5-17; 150: 7-12.)

On June 3, 2021, Danielle Duffer, Southstone's HR director, sent Boelte a letter indicating that it never received a response to its April 30 request to have her healthcare provider complete a medical questionnaire by May 15 so that Southstone could “assess [her] request for additional leave as a potential accommodation under the Americans with Disabilities Act.” (Id. Ex. 23.) The letter went on:

Outcome:

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