Section 3.2 of HB 2 and Its Impact on
Wrongful Discharge Claims
North Carolina Law Before HB-2
Since 1985, workers in North Carolina who have been fired for a reason that offends the State’s public
policy have been able to bring a common law claim of wrongful discharge against public policy. The
North Carolina Court of Appeals joined the majority of states in recognizing this common law claim in
Sides v. Duke Hospital in 1985, which involved an employee fired for refusing to commit perjury at the
employer’s behest. The North Carolina Supreme Court recognized this claim in Coman v. Thomas Mfg.
Co. in 1989,
which involved an employee truck driver’s refusal to violate state trucking regulations and falsify
paperwork, adopting the reasoning in Sides v. Duke.
The North Carolina Equal Employment Practices Act (NCEEPA), G.S. 143-422.1-.3, passed into law
in 1977, states that discrimination based on religion, race, color, national origin, age, sex, or disability is
against the public policy of North Carolina. For decades, employees who have been fired because of their
religion, race, color, national origin, age, sex, or disability have been able to rely upon the public policy
expressed in the NCEEPA to bring a common law claim of wrongful discharge in violation of public
policy in North Carolina state courts. This common law claim only applies to those who are terminated
for these discriminatory reasons by employers who regularly employ 15 or more employees.
The Impact of Section 3.2 of HB 2
Section 3.2 of HB 2 added a sentence to existing N.C. Gen. Stat. SS 143-422.3, eliminating an employ
ee’s ability to rely upon N.C. Gen. Stat. SS 143-422.2 for a public policy basis supporting the employee’s
wrongful discharge claim:
“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 ex
pressed herein.”
(This language is also included in Section 3.3 of HB 2, addressing public accommodations.)
This change abolished the common law claim for wrongful discharge in violation of the public policy
codified in the NCEEPA, as its primary sponsor admitted when questioned about this provision on the
House floor. However, the sponsor also stated that federal law provided a remedy which was “far more
robust” than the remedies available under State wrongful discharge law. This statement was incorrect, as
explained below.
Why a Federal Remedy Is Insufficient in Many Cases
Some wrongfully discharged employees may have an alternate but limited remedy under federal law.
However, the federal claims are a poor substitute for the state common law wrongful discharge claim, and
often the federal claims are rot available for wrongfully discharged employees for real-world reasons.
1. Federal claims must be brought within 180 days of the unlawful act by filing a Charge with the
Equal Employment Opportunity Commission (“EEOC”). Many employees are unaware of their rights,
or of this short timeline, have never heard of the EEOC and are too focused on trying to provide for their
family or find new employment after being wrongfully terminated. As a result, they often miss the dead
line and lose their federal claims.
2. Many employees who have been fired do not realize, within 180 days of the termination, that an
unlawful discriminatory motive caused their termination. Often, this information is received from the em
ployee’s former co-workers, over a period of time, and after the 180 days for filing have passed. In other
cases, the evidence of unlawful discrimination does not exist until more than 180 days after termination
(for example, a 50-year old black female whose “position is eliminated” might have a viable discrimina
tion claim if a 22-year old white male with no experience is later placed in the “eliminated” position).
3. The EEOC is an already over-burdened federal bureaucracy that can take years to “investigate” a
Charge of discrimination. This required procedure not only delays justice (often by a year or more), but
increases litigation expenses, and can even lead to the loss of key Title VII claims in a subsequent lawsuit
for their federal Title VII claims, as the employee’s subsequent lawsuit is limited to the claims raised in
the EEOC process.
4. There are only three EEOC offices in North Carolina: Charlotte, Greensboro, and Raleigh.
5. Federal court filing fees are twice as much as state court fees. In general, federal court costs more to
litigate for both employers and employees because of much more formal procedures.
6. Although employees may initially file their federal claims in State superior court, those claims are
almost always removed to federal court by the defendant, as a matter of right and strategic advantage:
historically, federal judges and juries are more hostile to employment discrimination claims than are State
judges and local juries.
7. A federal court venue can be far more inconvenient for the parties and their witnesses. In North
Carolina, there are three federal judicial districts, and the parties are required to file their lawsuit in the
district including the county in which they reside, or where their former employer is located. One federal
judge is randomly assigned to hear a case, for the duration of the litigation. That judge will hear the case
only in the courthouse where they sit (and potentially one or two other courthouses, on occasion), and the
parties must travel to those courthouses to be heard, specifically:
Eastern District: Raleigh, Greenville, Wilmington, New Bern, Elizabeth City (unstaffed), Fayetteville
(unstaffed)
Middle District: Greensboro, Winston-Salem, Durham (rarely)
Western District: Asheville, Statesville, Charlotte
This graphic illustrates this large geographic area, and limited federal venues across the State:
THE CAROLINA TIMES - SATURDAY, APRIL 16, 2016 - 3
Additionally, the federal courts now require electronic filing, but most employees do not have the
knowledge or wherewithal to accomplish electronic filing, so if they are unrepresented, they must travel
to a staffed courthouse to file their lawsuit and any subsequent documents filed in the case.
8. Federal remedies are the same as State law remedies for wrongful discharge, but unlike State law,
federal remedies for compensatory! and punitive damages are capped, based on the size of the employer.
Thus, under federal law an employer with 15-100 employees can only be required to pay a combined
maximum of $50,000 in compensatory and punitive damages; an employer with between 101-200 em
ployees can only be required to pay a combined maximum of $100,000 in compensatory and punitive
damages; an employer with 201-500 employees can only be required to pay a combined maximum of
$200,000 in compensatory and punitive damages;, and an employer with over 500 employees can only
be required to pay a combined maximum of $3 00,000 in compensatory and punitive damages. See 42
U.S.C. SS 1981a(b)(3).
The situation is even worse for age discrimination claims, as federal law permits such workers to
recover only back wages and liquidated damages (up to the amount of the back wage award), and then
only if the discrimination is found to be “willful.” Compensatory damages and punitive damages are not
available under federal law for age discrimination.
By comparison, North Carolina has no cap for compensatory damages, and punitive damages are
available at the greater of $250,000 or three times compensatory damages. N.C.Gen.Stat. !D-25(b).
Federal law and the U.S. Constitution provide the floor, or the lowest common denominator, of
rights for all citizens. With the passage of HB 2, North Carolina is now one of only two states that
provide no remedy at state law for discriminatory wrongful discharge.
9. Complaints filed in federal court are quickly visible via an online search, while state court
complaints generally are not. This discourages wrongfully fired employees from pursuing a
federal claim because they are concerned this will impact their ability to obtain new employment.
1 “Compensatory damages” under federal law include future pecuniary losses, emotional pain, suffer
ing, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses. 42 U.S.C.
SS 1981a(b)(3).
The Human Relations Commission Provides No Relief Provides No Relief
Since its adoption of N.C. Gen. Stat. SS 143-422.3, that statute has provided that North Carolina em
ployees may report their charge of discrimination to the N.C. Department of Administration’s Human Re
lations Commission. However, as a practical matter, the Commission has focused on “resolving housing
discrimination complaints for private persons” and “improving community relations.” The Commission
simply does not address employment discrimination complaints against private employers.2 Moreover,
even if the Commission were actively engaged in addressing employment discrimination complaints, its
authority is expressly limited to receiving, investigating, and conciliating (trying to mutually resolve)
such complaints. Where those efforts are unsuccessful, the employee is still left with only the federal
remedy
The Legislature Can Restore the Common Law Remedy Without Impairing the Remainder of
HB-2
NCEEPA has absolutely no relevance to any claim by an LGBT employee that his/her employer dis
criminated in its provision of restroom facilities, or that the employer otherwise failed to accommodate
an LGBT employee, or that a local government overstepped its bounds. Thus it was wholly unnecessary
to the General Assembly’s stated goals of the Special Session to amend this statute and eliminate an im
portant remedy for all North Carolina employees.
For decades the NCEEPA has expressed the anti-discrimination public policy of this state. Employees
who have been wrongfully terminated because of their religion, race, color, national origin, age, sex, or
disability have been able to obtain relief and vindicate their rights in our state courts under the common
law claim of wrongful discharge against the public policy expressed in the NCEEPA. This fundamental
right of North Carolina citizens is one of the few protections afforded employees under our state law.
Our lawmakers need to give citizens back the limited protection they have had under state law for three
decades by removing the new last sentence of N.C. Gen. Stat. SS 143-422.3 that was added by HB-2, SS
3.2.
COMPARISON OF STATE vs. FEDERAL PRO CESS
State
Federal
Administrative
agency prerequisite
None
Before filing lawsuit, must obtain Notice
of Right to Sue from EEOC
Statute of limitations
3 years
180 days to file Charge, 90 days from
issuance of Notice of Right to Sue to file
lawsuit
) Venue
County of employee's residence
or employer's business
In federal judicial district, at courthouse
to which randomly selected judge is
assigned
Filing fee
$200
$400
Filing process
Delivering documents to clerk at
courthouse by mail or in person
Electronic filing, after receipt of training
and approved password from clerk, or
hand delivery to staffed clerk's office
8. Federal remedies are the same as State law remedies for wrongful discharge, but unlike State law,
federal remedies for compensatory! and punitive damages are capped, based on the size of the employer.
Thus, under federal law an employer with 15-100 employees can only be required to pay a combined
maximum of $50,000 in compensatory and punitive damages; an employer with between 101-200 em
ployees can only be required to pay a combined maximum of $100,000 in compensatory and punitive
damages; an employer with 201-500 employees can only be required to pay a combined maximum of
$200,000 in compensatory and punitive damages; and an employer with over 500 employees can only
be required to pay a combined maximum of $300,000 in compensatory and punitive damages. See 42
U.S.C. SS 1981a(b)(3).
The situation is even worse for age discrimination claims, as federal law permits such workers to
recover only back wages and liquidated damages (up to the amount of the back wage award), and then
only if the discrimination is found to be “willful.” Compensatory damages and punitive damages are not
available under federal law for age discrimination.
By comparison, North Carolina has no cap for compensatory damages, and punitive damages are
available at the greater of $250,000 or three times compensatory damages. N.C.Gen.Stat. !D-25(b).
Federal law and the U.S. Constitution provide the floor, or the lowest common denominator, of
rights for all citizens. With the passage of HB 2, North Carolina is now one of only two states that
provide no remedy at state law for discriminatory wrongful discharge.
9. Complaints filed in federal court are quickly visible via an online search, while state court
complaints generally are not. This discourages wrongfully fired employees from pursuing a
federal claim because they are concerned this will impact their ability to obtain new employment.
1 "Compensatory damages” under federal law include future pecuniary losses, emotional pain, suffer
ing, inconvenience,
mental anguish, loss of enjoyment of life, and other nonpecuniary losses. 42 U.S.C. SS 1981a(b)
(3).
The Human Relations Commission Provides No Relief Provides No Relief
Since its adoption ofN.C. Gen. Stat. SS 143-422.3, that statute has provided that North Carolina em
ployees may report their charge of discrimination to the N.C. Department of Administration’s Human Re
lations Commission. However, as a practical matter, the Commission has focused on “resolving housing
discrimination complaints for private persons” and “improving community relations.” The Commission
simply does not address employment discrimination complaints against private employers.2 Moreover,
even if the Commission were actively engaged in addressing employment discrimination complaints, its
authority is expressly limited to receiving, investigating, and conciliating (trying to mutually resolve)
such complaints. Where those efforts are unsuccessful, the employee is still left with only the federal
remedy
■ See Merger of the Human Relations Commission with the Civil Rights Division Would Yield Limited Cost Savings, Final Report
to the Joint Legislative Program Evaluation Oversite Committee, Report No. 2012-11 (June 14, 2007), available online at
hSBaASfflOlLnyggJietiPEDZBgfier^ This Report explains thatthe Civil Rights Commission
handles employment discrimination complaints, but only those brought by public employees.
Discovery plan
None, except as provided by Rules
or specifically requested by
parties
Issued by Court, after Defendant
answers Complaint and parties confer
and provide their requests
Discovery start
Any time, including with the
Complaint
After Court issues scheduling order, 3-4
months after Complaint filing
Discovery scope
Only as limited by Rules or
protective order
Extremely limited, per Court order
Jury pool
Selected from residents of judicial
district or county
Selected from residents of judicial
district
Remedies
Back and front wages,
compensatory damages'(no limit),
punitive damages (up to $250K or
3x compensatory damages)
Back and front wages, compensatory and
punitive damages (total of both capped
at $50K-$300K, depending on employer
size)
Attorneys fees
Costs
No authorization for court award
Available to prevailing party
Available to prevailing party
Available to prevailing party
Public Access to
court filings
Only in-person, at courthouse,
except for filings under seal
Nationally available online, except for
filings under seal
Register
To
Vote
Register
To
Vote
(More Stories On HB2 Page 8)
THE CAROLINA TIMES
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