Jeffrey Howard v. Cherokee Health Systems

Court of Appeals for the Sixth Circuit·Decided September 2, 2025·No. 24-5981·Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 25a0413n.06

No. 24-5981

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

FILED

Sep 02, 2025

)

JEFFREY W. HOWARD, KELLY L. STEPHENS, Clerk )

Plaintiff-Appellant, )

)

ON APPEAL FROM THE UNITED v. )

) STATES DISTRICT COURT FOR ) THE EASTERN DISTRICT OF CHEROKEE HEALTH SYSTEMS, TENNESSEE )

Defendant-Appellee. )

) OPINION

Before: WHITE, LARSEN, and MURPHY, Circuit Judges.

MURPHY, Circuit Judge. For decades, Jeff Howard served as the chief financial officer for Cherokee Health Systems. Howard worked under Dennis Freeman, Cherokee’s longstanding chief executive officer. When Freeman announced his retirement plans, Howard approached him about applying to be the next CEO. But Freeman recommended a different candidate. Howard applied anyway, so Freeman fired him. Howard claims that Freeman took this action because he wanted a female to replace him. And Howard alleges that Cherokee’s board refused to consider him because his counsel sent a letter complaining about Freeman’s alleged sex discrimination. Yet Howard failed to produce enough evidence to show that Cherokee’s neutral reasons for these decisions were pretextual. We thus affirm the grant of summary judgment to Cherokee.

I

In the late 1970s, Cherokee Health Systems “was a small mental health organization” that had “33 employees” at a single location in Morristown, Tennessee. Letter, R.20, PageID 203.

Dr. Dennis Freeman became Cherokee’s CEO in 1978. He served in that role for the next four decades. During his tenure, this nonprofit healthcare provider grew to “employ 700 staff and maintain two dozen offices in locations in both east and west Tennessee.” Id. It now offers many medical services—including “primary care, behavioral health, dental, and pharmacy services”— “to the underserved population.” Carpenter Aff., R.12, PageID 82.

Howard took a college internship with Cherokee. After his graduation, he worked off and on for the company. Freeman hired Howard as Cherokee’s CFO around the year 2000. Howard stayed in that position for over twenty years.

By 2019, speculation began to grow over who would replace Freeman as CEO when he stepped down. Freeman first wanted Joel Hornberger, who served as the chief strategy officer, to serve as his successor. But Hornberger felt he was too old for the job and did not want to lead the entire organization anyway. As for Howard, he conceded in a 2019 email to Freeman that, while he “used to want to try my hand as CEO,” he was “probably not the best choice.” Email, R.12, PageID 102. Howard instead proposed Dr. Parinda Khatri, Cherokee’s chief clinical officer, as Freeman’s replacement. He also suggested that Freeman make Khatri the deputy CEO. But Freeman declined this latter proposal.

Two years later, the time came for Freeman to pass the torch. In October 2021, he told Cherokee’s board of directors that he would retire effective January 31, 2022. As the years progressed, Freeman had started to express a preference for a “clinician”—not an administrator— to stay in the role of CEO. Howard Dep., R.12, PageID 130. He also came to believe that a “financial person” would not make a great head of Cherokee. Id., PageID 135. So when he announced his retirement, he recommended that the board replace him with Dr. Khatri—the same

candidate that Howard had recommended earlier. Khatri’s hire also would adhere to the board’s succession plan, which favored candidates “internal” to Cherokee. Plan, R.20, PageID 239.

At this time, though, Howard had a change of heart over whether he wanted to be CEO.

On October 28, he approached Freeman to ask whether he could apply for the position. Howard and Freeman had different recollections of this conversation. Howard thought that Freeman condoned his request to apply while expressing his continued preference for Khatri. But Freeman thought that Howard had promised not to disrupt the succession process that Freeman had put in place. Indeed, Howard later admitted that Freeman “thought I promised something that I didn’t promise”: that he would not apply for the CEO position. Howard Dep., R.12, PageID 132.

The next day, Howard began to lay the groundwork for his application. He emailed two members of Cherokee’s board of directors to informally let them know his interest in replacing Freeman. He also sought to be “open” with Khatri about his intent. Email, R.12, PageID 103. He alerted her in another email that he planned to apply and that the two would unfortunately be “competing” against each other. Id.

This email did not go over well. Khatri responded with only four words: “I am in shock.”

Khatri Dep., R.12, PageID 146. She also refused to respond to Howard’s follow-up emails. But Khatri did let Freeman know about Howard’s plans. Freeman asked to see Howard’s email. After forwarding it, Khatri complained that Howard had “create[d] division at” Cherokee by going “against” Freeman’s “plan.” Text, R.20, PageID 205. She also expressed concern about what she believed to be the finance department’s underperformance.

Freeman fired Howard a few days later. In Freeman’s termination letter, he explained that Howard’s “self-serving actions” had alienated the leadership team, threatened dissension, and violated Howard’s assurances that he would not disrupt the transition. Letter, R.12, PageID 106.

In notes “to the record,” Freeman suggested that Howard had promised that he would not apply “unless the Board open[ed] up the process” after it passed over Khatri. Notes, R.12, PageID 109. Freeman thus thought that Howard had lied.

In November, Howard’s lawyers sent a letter to the chair of Cherokee’s board accusing Freeman of firing Howard out of a desire to ensure that Khatri, a woman, became the CEO. The lawyers suggested that Freeman had engaged in illegal sex discrimination. They asked the board to consider Howard for the CEO position and attached a cover letter and resume from Howard with the correspondence.

This letter caused board members to disagree over how to proceed. One member, Nancy Sirianni, worried that Howard would sue Cherokee if he did not become CEO and suggested that they refer the matter to counsel. Another, Michael Covington, suggested that Howard may have a “viable case” and that he would like “to gain the perspective of other candidates before committing to a handpicked successor.” Emails, R.12, PageID 114, 116. He also called Khatri to discuss her application. When he brought up Howard’s termination, Khatri “had a meltdown on the phone.” Covington Dep., R.20, PageID 198. She could not talk about the matter, which gave Covington concerns about how she would handle a crisis as CEO. Yet Freeman had a “real problem” with Covington’s decision to call Khatri and “lashed” out that the board should speak only with Freeman rather than his staff. Id., PageID 197, 201. Covington had to remind Freeman that he was not Freeman’s “subordinate” and that Freeman instead served at the board’s pleasure. Id., PageID 197.

Ultimately, though, the board’s chair (Ken Knight) moved forward with the “succession plan” that the board had approved. Email, R.12, PageID 117. In early January 2022, a search committee made up of several board members interviewed Khatri and came away “favorably

impressed” with her. Knight Aff., R.12, PageID 91. They recommended that the board hire Khatri without interviewing others, especially because she remained the only internal candidate. The full board decided to hire her on January 25.

Howard sued Cherokee under Title VII and Tennessee law. The district court granted summary judgment to Cherokee. See Howard v. Cherokee Health Sys., 2024 WL 4350330, at *9 (E.D. Tenn. Sept. 30, 2024). We thus must review its opinion de novo. See Smith v. Newport Utils., 129 F.4th 944, 948 (6th Cir. 2025).

II

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