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On March 23, the North Carolina General Assembly's Republican leaders called an emergency session to reverse a Charlotte ordinance aimed at protecting LGBTQ Charlotteans from discrimination. Signed into law by Governor Pat McCrory within hours, the Public Facilities Privacy & Security Act—now widely known as H.B. 2 or "the bathroom bill"—does more than its sponsors and supporters would have the public believe it does. Notably, it prevents municipalities from raising the minimum wage. And one of its least covered provisions eliminates workers' ability to sue their employers for discrimination in state court.
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While the new law is widely understood to nix the authority of local governments in North Carolina to enact anti-discrimination ordinances, it also rolls back statewide employment discrimination protections. One provision of the law eliminates a long-standing right of employees under the North Carolina Equal Employment Practices Act ("NCEEPA") to hold employers accountable for workplace discrimination on the basis of race, religion, age, sex, and several other categories.
North Carolina now joins Mississippi as the only other state in the nation that does not afford employees a right to sue employers for discrimination in state court.
North Carolina is an "at-will" employment state, meaning that either employer or employee may, at any time and for any reason (or without reason), terminate the employment relationship. However, North Carolina courts have carved out exceptions to the at-will doctrine to prevent employers from terminating employees for reasons that would cut against the public policy of the state.
The North Carolina common law of wrongful discharge permits an employee to challenge her termination in state court if she believes her employer violated public policy by ending her employment. Courts in North Carolina have held that an employee who alleges wrongful discharge must be able to point to some specific expression of public policy existing in North Carolina's General Statutes or Constitution in order to establish her claim. Before H.B. 2, an employee could point to NCEEPA as the expression of public policy necessary to establish her claim of wrongful discharge. Not anymore.
H.B. 2 amends NCEEPA by gutting its private enforcement mechanism: "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." (Emphasis added).
While the public policy against discrimination still stands, there is no longer a negative legal incentive for employers to follow the state's public policy. That's akin to telling someone she should behave a certain way while making it clear that she won't suffer any consequences if she doesn't.
What does this mean practically? Here's a hypothetical: Carla, a devout Southern Baptist, keeps a Bible and a crucifix at her desk and pauses occasionally during the day to pray silently at her desk. Her supervisor, an atheist, is offended by her quiet display of religious faith at work. He decides to begin a campaign to have her terminated by giving her poor performance reviews and subjecting her to undue discipline. After a few months, he terminates her employment. Prior to H.B. 2, Carla could have proceeded directly to state court under a claim of wrongful discharge, pointing to NCEEPA's prohibition against discrimination on the basis of religion. Now, Carla cannot sue her employer at all in North Carolina courts to hold it accountable for wrongfully terminating her employment.
Instead, she must now rely on a more restrictive, costly and lengthy process, under federal laws such as Title VII of the Civil Rights Act, that is fraught with procedural hurdles. She'll have to get to a lawyer quickly, because instead of the three years she would have had to bring a claim under North Carolina law, she now has only 180 days to file a charge of discrimination with the federal Equal Employment Opportunity Commission ("EEOC"). The EEOC will probably take six months to a year to investigate her claim, and may issue a right to sue letter to Carla, leaving her only 90 days to file a lawsuit in federal court. In federal court, Carla will face higher costs to litigate and a lengthier process than she would have in state court.
Substitute Black, Muslim, Hispanic, female, disabled, and senior citizen into the hypothetical above and you'll get the same result. North Carolinians belonging to any protected class will meet the same fate as Carla now does.
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There are strategic advantages to bringing employment discrimination claims in state court, too. North Carolina civil procedural law encourages expediency: It permits discovery to proceed immediately, allowing parties to begin exchanging information that can often lead to speedier resolution of the litigation. In federal court, a plaintiff must wait for the court to give a green light before commencing discovery, which can sometimes take months or even a year. A case brought in state court could very well have been mostly litigated or settled before an employee might even hear back from the EEOC with permission to sue.
Federal anti-discrimination statutes also cap the amount of compensatory (emotional distress) damages that a court may award to a plaintiff. For smaller employers (between 15 and 100 employees), that cap is $50,000. North Carolina law does not cap compensatory and punitive damages for wrongful discharge claims.
Some claims for wrongful discharge will survive H.B. 2—if they are not based on NCEEPA. For example, if an employer discharger an employee for failing to provide false testimony to help the employer during an investigation, the employee may still bring suit for wrongful discharge.
Make no mistake, H.B. 2's unambiguous preclusion of employment discrimination lawsuits under state law is evidence that its legislative sponsors intended its obvious effect. It carries real, damaging consequences for working people.
A lawsuit challenging the provisions of H.B. 2 that clearly target LGBTQ people has recently been filed by civil rights groups. However, even if the plaintiffs succeed in reversing those core provisions of H.B. 2, the anti-worker amendments to NCEEPA will probably remain. Unless repealed in full by the General Assembly, North Carolina's workers are likely to feel the effects of H.B. 2 for quite some time.