Employment & Labor Insider

For the background on this situation, please see my post from Friday on HB 2. I spoke for almost an hour Friday evening with reporter Greg Lacour from Charlotte Magazine, and he asked me to go through his April 4 article "The HB 2 Provision Few Are Talking About" point-by-point and tell him exactly what I thought was inaccurate. I did, and he told me he was going to publish a correction. I updated my Friday blog post accordingly.

This weekend, he published a "clarification" on one important point but gave the impression that everything else we disagreed on was a matter of opinion. The correction doesn't mention many of the other substantive points that he and I discussed.

Let me start on a positive note:

First, to his credit, Mr. Lacour has corrected the statement from his original article that HB 2 does not abolish the cause of action for common-law wrongful discharge in North Carolina.

Second, Mr. Lacour agreed on the phone that he should have consulted with a defense lawyer in addition to consulting with a plaintiff's lawyer (Laura Noble of The Noble Law Firm of Chapel Hill).

Third, it is true that most of the facts about HB 2's wrongful discharge provisions that I pointed out in my Friday blog post were not rebuttals to anything that Mr. Lacour had said in his April 4 article.

Fourth, I did indeed tell Mr. Lacour that I was surprised about the wrongful discharge provisions in HB 2, and that many of my colleagues were surprised by them, as well. (It is what it is.)

However, I'm afraid that Mr. Lacour's clarification leaves a misleading impression that the bulk of his April 4 article was accurate. The following is a point-by-point list of the inaccurate statements in the April 4 article, followed by my responses, all of which I discussed with Mr. Lacour on Friday evening:

"The new law bars workplace discrimination claims from North Carolina courts, nullifying 30 years of common-law precedent and forcing people who say they’ve been unfairly fired from their jobs to turn to the federal courts for relief."

First, HB 2 does not bar "workplace discrimination claims from North Carolina courts." Federal claims can be filed in state court. HB 2 does not "nullif[y] 30 years of common-law precedent." The wrongful discharge claim based on the Equal Employment Practices Act -- the only claim that was abolished by HB 2 -- has not been around nearly that long. HB 2 does not "forc[e] people who say they've been unfairly fired from their jobs to turn to the federal courts for relief."

"Why’s that a big deal? The federal court system is a lot harder, and usually more expensive, to navigate. Before they even file suit, potential plaintiffs have to get permission from the Equal Employment Opportunity Commission, which can take months. They then have 90 days to file the complaint, compared to a three-year statute of limitations for state court. The filing fee is twice as expensive, and damages are capped at $300,000; there’s no such cap at the state level."

As I told Greg on Friday, I disagree that the federal court system is harder or more expensive to navigate than state court. Admittedly, I don't know a lot about this from the plaintiff's perspective, but I do know that federal courts have a very orderly discovery process, electronic filing, mandatory mediation (you have to mediate, but you don't have to settle), and clear-cut timelines and procedures. It's a good system. Although the filing fee may be more expensive, plaintiffs usually don't have to pay it: if they file in state court and the defendant removes the case to federal court, then the defendant has to pay the filing fee.

This paragraph also gives short shrift to many of the benefits to a plaintiff of the EEOC process: (1) a voluntary, free mediation program; (2) an investigation, some of which will be shared with the employee; (3) the ability of both parties to get a copy of the EEOC's investigative file, which often contains very helpful information to one or both parties; and (4) the conciliation process, if the EEOC finds in favor of the plaintiff. The 90-day suit-filing period runs from the end of this process, not from the date of the plaintiff's termination from employment. (And, if a plaintiff doesn't want to be bothered by all of this, he or his attorney can simply request a right to sue letter from the EEOC, and they can head directly to court.)

The most significant inaccuracy in this paragraph is the statement that state claims have no damages cap. The $300,000 cap under federal law applies only to compensatory (such as emotional distress) and punitive damages. There is no cap under federal law on recovery of lost wages and benefits (past and future).

North Carolina law caps punitive damages at $270,000 or three times the plaintiff's actual damages, whichever is greater. In my blog post on Friday, I provided a scenario in which a minimum wage plaintiff could actually have a smaller recovery on a state claim than on a federal claim.

The lack of any discussion of attorneys' fees -- attorneys' fees are recoverable under federal law but not under state law -- also makes this comparison extremely misleading.

"North Carolina, as an 'employment-at-will' state—basically, private employers can fire anyone for any reason—has always occupied the business-friendly end of the employee rights spectrum."  

I pointed out to Greg that this is a common misconception I am constantly trying to correct. The exceptions have virtually swallowed the employment at will rule, and I warn employers not to count on it as a defense. It is more accurate to state that "private employers can fire anyone for any lawful reason," and even then they'd better be able to prove that the reason was lawful.

"Employers can’t fire you, for instance, for refusing to break the law for them. (The principle stems from an N.C. Court of Appeals ruling in 1985, from a case in which a nurse testified truthfully in a wrongful-death suit against Duke University Medical Center and was later fired.) Now, under HB2, even that exception is gone."

Wrong, but Greg did correct this in his new post.