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NC General Assembly Overrides Veto of Property Protection Bill

    Client Alerts
  • June 12, 2015
Last week, the North Carolina House and Senate overrode Governor McCrory’s veto of legislation intended to shield employers from video or other data or documents release by employees. H.B. 405, called the “ag-gag” bill by opponents, imposes penalties of up to $5000 per day against employees who copy or remove data, or who release video or audio recordings involving non-public areas of their workplaces.

This law was prompted by the actions of animal rights activists who released video of questionable care practices at large farms in North Carolina and other states. However, the bill’s reach is not limited to the agriculture industry.  Governor McCrory vetoed the bill, stating his belief that the measure does not contain adequate protections for legitimate whistleblowers who report illegal activity.

The bill will likely face legal challenges. Among other concerns, the National Labor Relations Board may consider these provisions to conflict with employee concerted activity rights contained in Section 7 of the federal NLRA. Other plaintiffs may claim that the measure interferes with First Amendment freedom of speech rights.

If upheld, the new law will provide an additional tool for employers to use against employees in some circumstances who misappropriate company property for ulterior purposes. Current North Carolina law limits such protections to misappropriation of trade secret information. The new law’s provisions extend to company information and property that would not meet the strict definition of a trade secret. The new law takes effect January 1, 2016.