North Carolina’s new Public Facilities Privacy & Security Act, commonly known as HB2, includes a prohibition against state court wrongful discharge lawsuits based on race, religion, gender, age and other protected classifications. Many plaintiffs prefer state court actions for discrimination lawsuits, because they are not subject to EEOC administrative exhaustion requirements, or damage caps applicable to suits brought under Title VII.
HB2 amends the North Carolina Equal Employment Practices Act to state: “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.” The last part of this amendment refers to public policy wrongful discharge claims. In its 1989 Coman decision, the North Carolina Supreme Court recognized public policy wrongful discharge as an exception to the employment at-will doctrine. HB2 instructs courts that such discrimination claims cannot form the basis for a wrongful discharge lawsuit.
The new law does not address whether HB2 applies to pending discrimination cases. Wrongful discharge is a common law and not a statutory cause of action. Did the General Assembly mean to change the law, or did it simply express the existing public policy of the state? Defendants facing wrongful discharge lawsuits in North Carolina based on alleged employment discrimination will certainly seek to dismiss those pending matters based on HB2. North Carolina courts will have to determine the General Assembly’s intent in making the statutory change.
The window for seeking such dismissals may be brief. Several Republican legislative leaders have already expressed their belief that the General Assembly should reconsider this portion of HB2 in the upcoming legislative session. In an Executive Order issued last week, Governor McCrory made the same recommendation.