HB2 ‘Repeal’: How Does It Change Employment Law?

Labor & Employment Section

By Laura J. Wetsch

On March 23, 2016, the General Assembly enacted, and Gov. McCrory signed, HB2, which became Session Law 2016-3.  On July 18, 2016, Gov. McCrory “approved” HB169 (the legislative “fix”), which became Session Law 2016-99.

On the one-year anniversary of HB2, the NCAA set a deadline of March 30, 2016, for North Carolina to repeal HB2 or be eliminated as a possible venue for hosting any NCAA championship games through 2022. Accordingly, on March 30 the General Assembly filed, passed, and Gov. Cooper signed, HB142, which repeals both S.L. 2016-3 and S.L. 2016-99, and amends NCGS § 143-760 (created by HB2) to prevent any “local government in this State” from enacting or amending “an ordinance regulating private employment practices or regulating public accommodations” until Dec. 1, 2020 (at which point that provision expires), and preempt regulation of access to multiple occupancy restrooms, showers or changing facilities by “State agencies, boards, offices, departments, institutions, branches of government, including the University of North Carolina and the North Carolina Community College System, and political subdivisions of the State, including local boards of education,” “except in accordance with an act of the General Assembly.”

According to news reports and social commentary, those on the right are upset by the bill because they didn’t want to repeal HB2 in the first place, and those on the left are upset by the bill (and with Gov. Cooper) because they think it represents government-sanctioned discrimination against LGBTQ citizens.  Meanwhile, whether the NCAA will be mollified by this legislation is anyone’s guess, as this morning’s news reports indicated that the NCAA’s decisionmakers would meet and “consider” whether North Carolina’s action was “sufficient.”

So how does HB142 change employment law?

First and foremost, it eliminates HB169’s amendment of NCGS § 1-54 to impose a one-year statute of limitations on wrongful discharge actions premised on NCGS § 143-422.2.

Second and also important, it removes the word “biological” from NCGS § 143-422.2’s reference to “sex” and globally removes the definition of “sex” as based upon the gender specified on a person’s birth certificate.

Third, it removes the public policy statement at NCGS § 143-422.2(c), declaring regulation of discriminatory employment practices as an issue of general, statewide concern, etc.

Otherwise, it’s a reset to employment law as it stood on March 22, 2016:

  • There’s still no explicit recognition of employment protections based on sexual orientation or gender identity;
  • Lawyers are again free to argue that NCGS § 143-422.2’s reference to “sex” refers to both sexual orientation and gender identity (although analogizing to federal law will almost certainly become more difficult as the Trump administration continues its policy changes and litigation priorities); and
  • Until at least Dec. 1, 2020, local government still can’t regulate private employers, including requiring that entities seeking public contracts pay their employees a minimum (living) wage. But see NCGS§ 153A-449 (3/22/16) (“…county may not require a private contractor under this section to abide by any restriction that the county could not impose on all employers in the county, such as paying minimum wage or providing paid sick leave to its employees”); 160A-20.1 (3/22/16) (same, but for cities).

As far as public accommodations – the piece that everyone is upset about — while HB142 prevents government entities from expressly authorizing transgender individuals to use the public accommodations of their gender identity, it also effectively prohibits those same entities from requiring use based upon birth certificate gender, which this writer counts as at least one positive effect of this compromise.

Ultimately, nothing in the history of this debate gives assurance that the General Assembly will not again enact comparably objectionable provisions as soon as the NCAA approves March 30’s legislation as “sufficient,” and that’s perhaps the real problem.  Hopefully legislators have learned that what is given can be easily taken away again.  Only time will tell.