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Tuesday, March 29, 2016

Employment Law Easter Eggs in North Carolina’s HB 2

The vast majority of the commentary around and criticism of N.C.’s HB 2 [see the full text as enacted here] has, perhaps rightly, focused on the elimination of LGBT rights in North Carolina.  The lawsuit filed early this morning by the ACLU, Equality NC, and others (including NC Central Law Professor and Assoc. Dean Angela Gilmore) focuses exclusively on the LGBT rights provisions of HB 2.  [Read the Complaint here]. 

However, HB2 was not just about LGBT individuals.  It also has some rather nasty Easter Eggs for all employees in North Carolina. 

First, and most openly, it prohibits all local governments in North Carolina from enacting a local minimum wage that exceeds the federal minimum wage.  No local government in N.C. had tried, but I guess the General Assembly figured it would rather be safe than sorry – especially when the LGBT provisions would tie up the news cycles. 

Most importantly – and most sneakily – HB 2 eliminated (yes, ELIMINATED) the only state law cause of action available to private employees to redress employment discrimination based on race, national origin, religion, color, age, or biological sex.  The General Assembly accomplished this profound change in North Carolina employment law via a single sentence in middle of page 4 of the five page bill.  That sentence reads:

“This Article does not create, and shall not be construed to create or support, a statutory or common law private right of action, and no person may bring any civil action based upon the public policy expressed herein.” 

To a lay reader (or legislator), this sentence would not seem terribly important.  However, it was inserted into Article 49A of Chapter 143 of the NC General Statutes [here, before being amended].  Article 49A is called the “Equal Employment Practices Act” (“NC EEPA”) and contains the heart of North Carolina’s state law protection from employment discrimination.  NC EEPA, which was enacted in 1977, is merely a statement of public policy.  It declares that it is the public policy of North Carolina “to protect and safeguard the right and opportunity of all persons to seek, obtain and hold employment without discrimination or abridgement on account of race, religion, color, national origin, age, sex or handicap by employers which regularly employ 15 or more employees.”  N.C. Gen. Stat. 143-422.2.  Unfortunately, NC EEPA does not contain a private right of action.  Thus, the only way to enforce it was through a common law tort action for wrongful discharge in violation of public policy. 

Now, of course, you see the problem with the sentence inserted into Article 49A via HB 2.  “[N]o person may bring any civil action based upon the public policy expressed herein.” 

Poof.  With that sentence, 34 years of state law protection for employment discrimination based on race, national origin, color, religion, sex, and age VANISHED.  Millions of working North Carolinians (whether they knew it or not) relied on NC EEPA to help protect them from discrimination.  Thousands – tens of thousands? – of North Carolina workers have asserted wrongful discharge claims premised on NC EEPA since our appellate courts officially recognized the claim in 1982. 

As a management-side employment lawyer for more than 11 years, I never heard a single client complain about the existence of this claim.  But now, it is gone. 

I wonder how many members of North Carolina General Assembly knew it was in HB 2?  I wonder how many of them knew the ramifications of that sentence?

Posted by Brian Clarke on March 29, 2016 at 08:00 AM in Employment and Labor Law, Gender, Law and Politics, Torts, Workplace Law | Permalink


So what happens now to all state wrongful termination actions based on that section already in process? Can they still succeed because the law allowed for them at the time of the discriminatory act? Do you think there's a reasonable argument of legislative intent to preserve the non-gender-based action in light of all the statements by supporters and participants that "no existing right" is eliminated, or will "plain language" take the day?

Posted by: Vee | Mar 30, 2016 10:40:03 AM

I appreciate these posts, but I don't think that eliminating state court claims and forcing them to federal court is nearly as "important" as depriving every North Carolinian in every city, town, and county the ability to lobby their local governments for legal protection from discrimination.

Posted by: Guest | Mar 29, 2016 6:25:17 PM

What makes you think that legislators care whether they are eliminating state law employment protections?

Posted by: Doug Richmond | Mar 29, 2016 12:38:28 PM

Item: North Carolina AG Cooper explains he’s not defending anti-LGBT law.

Posted by: Joe | Mar 29, 2016 11:14:58 AM

What Paul said. So now motions to dismiss and summary judgment motions might actually get read before they're denied.

Posted by: My$0.02 | Mar 29, 2016 11:08:16 AM

So, all NC employment discrimination claims must now be filed in the federal venue? Bless their hearts.

Posted by: Paul | Mar 29, 2016 9:52:44 AM

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