Big news for employees and employers in North Carolina — the General Assembly enacted a bill on Wednesday (signed by Gov. Pat McCrory (R) within hours) that was primarily intended to preempt a certain high-profile municipal “bathroom” ordinance. (More on that in a sec.) But included in the bill is a provision that eliminates the wrongful discharge/public policy cause of action based on “EEO” discrimination.

North Carolina employment law practitioners are intimately familiar with the Equal Employment Practices Act, N.C. Gen. Stat. Section 143-422.2, and following, which says that it violates the public policy of the state for an employer of 15 or more employees to discriminate based on race, sex, national origin, religion, age, or “handicap” [sic] (ugh — can’t they change this to “disability”?). As the courts have construed that statute, it allowed employees to file tort claims for wrongful discharge if the discharge was based on one of the protected characteristics.

The benefits to a plaintiff of asserting a wrongful discharge claim — as opposed to a discrimination claim under Title VII or other applicable federal law — have been several:

  • You don’t have to bother with the EEOC process.
  • You get a three-year statute of limitations running from the date of discharge, rather than 180 days to file an EEOC charge and 90 days from receipt of the Notice of Rights.
  • You can keep your lawsuit in state court, assuming no diversity and no related federal questions.

The statutory amendments signed into law yesterday eliminate the wrongful discharge cause of action based on Section 143-422.2-3. We expect to see a flurry of summary judgment motions and motions to dismiss wrongful discharge claims based on this amendment. From now on, if an employee believes he or she has been discriminated against based on these characteristics, he or she will have to go through the federal process or lose the claim.

According to this article from the Raleigh News & Observer, it sounds like some of our state legislators didn’t know what they were doing. Or, are they just saying that now?

Also, the “sex discrimination” prohibitions in Section 143-422.2 now apply only to discrimination based on “biological sex,” defined as the sex on the individual’s birth certificate. It appears that the General Assembly is trying to prevent any expansion of “sex discrimination” to include gender identity or transgender status.

Restroom Access

Now, to the “bathroom” part. The City of Charlotte recently made the news by enacting an ordinance prohibiting LGBT discrimination and allowing people to use the public restroom associated with their gender identity. The new state statute enacted Wednesday preempts this ordinance and all local laws regarding discrimination, including bathroom designations, and provides that public and school bathrooms must be used by persons according to their “biological sex” (that is, the sex on their birth certificate). There are a few narrow exceptions — for example, for emergency medical care and janitorial staff — and one-person restrooms can be made available to everybody regardless of gender.

Otherwise, as I read the statute, even if you had gender reassignment surgery, as long as your birth certificate says you are a “boy,” you’d have to use the men’s room, and would be prohibited by law from using the women’s. This part of the law applies primarily to public accommodations and to schools.

The restroom provisions do not apply to private sector employers or local governments acting in relation to their own employees. As our readers know, federal agencies — most notably, the EEOC and the Occupational Safety and Health Administration — take the position that employers must make restrooms accessible to any employee based on his or her declared gender identity. As I read the new statute, there will not be a conflict between a North Carolina employer’s federal obligations and its obligations under the new state provisions.

Many thanks to my law partners Jon Yarbrough and Bill McMahon, who alerted me to this new bill, and a second thank-you to Jon for sending the N&O article.