October 30, 2025|Franchise Frontlines
October 30, 2025 | U.S. Court of Appeals for the Tenth Circuit | Published Opinion
Executive Summary
In a published decision, Judge Matheson of the Tenth Circuit reversed the district court’s grant of summary judgment for St. Catherine Hospital and Centura Health Corporation on a former employee’s Title VII retaliation claims. The Court explained that the plaintiff alleged he was terminated—and later reported to the Kansas Board of Healing Arts—because he complained that another physician had sexually harassed nurses. The district court found no causal connection or pretext. The Tenth Circuit disagreed, holding that a jury could infer retaliatory motive under a cat’s paw theory based on the plaintiff’s allegations that investigators deviated from internal procedures, failed to interview him, relied on one-sided information, and treated comparable physicians differently during the peer review and reporting process. Because the decisionmakers allegedly relied on the disputed investigative report without independent verification, the Court held that a factfinder could conclude the proffered reasons were pretextual. The Court remanded both the termination-based and report-to-the-licensing-board retaliation claims for further proceedings.
Relevant Background
According to the Court, Centura jointly employed the plaintiff, a surgeon and former Chief Medical Officer, at a Kansas regional hospital. The opinion recounts that several months before his termination, the plaintiff alleged that another physician engaged in inappropriate conduct toward nurses, including alleged sexual harassment. The plaintiff asserted that he reported these allegations to hospital leadership, reiterated them several times, and later stated that a request for a psychological evaluation appeared retaliatory.
The opinion explains that shortly thereafter, the hospital received an anonymous complaint about the plaintiff, prompting Centura personnel to conduct an internal investigation. The plaintiff alleged the investigators interviewed physicians but did not interview him or any nurses, departed from internal practices, and selectively credited adverse statements. The investigators later recommended termination to senior leadership, and the plaintiff was discharged two days later. The termination letter stated it was issued “without cause.”
The Court also noted that after the termination, several of the plaintiff’s medical cases were selected for external peer review, assigned standard-of-care ratings, and subsequently reported to the Kansas Board of Healing Arts. The plaintiff alleged that at least one reported case did not require mandatory reporting under Kansas regulations and that other surgeons’ cases with similar or more adverse peer-review findings were not reported. The district court granted summary judgment to the defendants, concluding that the plaintiff could not establish causation or pretext, and declined to exercise supplemental jurisdiction over remaining state-law claims.
Decision
The Tenth Circuit reversed. The Court held that the plaintiff alleged sufficient evidence to satisfy each step of the McDonnell Douglas framework at the summary-judgment stage. With respect to causation, the Court found that a jury could conclude protected activity and adverse action were connected through a cat’s paw theory. The plaintiff alleged that two individuals involved in the internal investigation did not follow hospital practices, failed to interview him, relied on a limited evidentiary record, did not verify key statements, and allegedly communicated an intent to influence the termination decision. The Court stated that these allegations, if credited, could permit a reasonable factfinder to infer retaliatory animus.
The Court also held that a jury could conclude the asserted legitimate reasons for termination—patient-care concerns, documentation issues, and peer-review process changes—were pretextual. The opinion emphasized that, on the summary-judgment record, a factfinder could determine the investigation was incomplete, inconsistent with internal procedures, and potentially influenced by a biased subordinate. The Court noted the plaintiff alleged the decisionmakers did not independently investigate or meet with him before terminating his employment, which could allow an inference that the termination decision relied uncritically on the disputed report.
On the claim involving reporting to the state licensing board, the Court held that the act of reporting cases to a regulatory authority could constitute a materially adverse action. The Court stated that the plaintiff presented evidence that at least one reported case might not have been subject to mandatory reporting and that other physicians with similar standard-of-care outcomes were not reported. Because the plaintiff alleged that decisionmakers knew of his protected activity and allegedly treated comparable physicians differently, the Court found that a jury could view inconsistencies in the peer-review and reporting process as supporting an inference of pretext. The Court therefore reversed summary judgment on both retaliation theories and remanded.
Looking Forward
Although this case arises from the healthcare sector, its analysis has broad implications for multi-unit employers, franchise systems, and organizations that rely on distributed personnel, internal investigations, or multi-step decisionmaking processes. The Court’s reasoning illustrates how allegations of incomplete investigations, deviations from established practices, or one-sided fact-gathering may create avoidable risk under a cat’s paw theory. Under different facts and in other jurisdictions, courts may reach different conclusions, but this decision demonstrates how closely some courts examine the independence of decisionmakers and the consistency of internal processes.
The opinion also underscores the importance of documenting how decisions are made, including who conducted the investigation, what information was reviewed, and how final decisionmakers verified the facts. For employers with layered reporting structures—including franchisors working with franchisees, field consultants, or multi-unit operators—this case highlights the benefit of ensuring that final decisionmakers exercise independent judgment rather than relying solely on subordinate recommendations, especially when those subordinates have been accused of bias. The Court’s discussion of comparator treatment likewise serves as a reminder that consistency in reporting, discipline, and internal review is essential to minimizing retaliation exposure.
For franchisors and employers, the case demonstrates the value of robust investigation protocols, careful documentation, and clear decisionmaking pathways designed to withstand scrutiny if an employee later alleges retaliatory motive.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter APC and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
