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No More HB2:  What Now for North Carolina Employers?

No More HB2: What Now for North Carolina Employers?


The Inside Perspective
(April 12, 2017)

Now that lawmakers in North Carolina have repealed HB2, the contentious state law best known for its impact on access to bathrooms in public buildings, what does it all mean for employers and human resource managers with operations in North Carolina?

The new law, which is commonly referred to as House Bill 142, does a few notable things.
 

  • Access to Bathrooms. Bathrooms in the workplaces of private employers were never an issue under HB2, and that remains the case now. HB2 quite famously required people to use bathrooms in public buildings according to the gender identified on their birth certificates. The controversy around the rule created strong opinions, and HR professionals have managed bathroom access as an employee relations matter, within workforces that include differing voices and beliefs. The law simply remains unsettled, and neither North Carolina nor the federal government has made it clear whether existing non-discrimination laws mandate particular access to bathroom and changing areas for transgender employees.    
  • State Law Discrimination Claims. The new law restores the pre-HB2 statute of limitations for wrongful discharge claims that arise under state law, N.C. Gen. Stat. §143-422.2, which declares it against North Carolina public policy to discriminate on the basis of race, religion, color, national origin, age, biological sex, or handicap. That period is three years, which means that, as before, North Carolina employees may bring such claims up to three years after their employment ends, a far more generous time frame than what is allowed for suits under comparable federal laws. The repeal of HB2 does not answer whether North Carolina law protects against discrimination due to sexual orientation or transgender status. It certainly does not do so explicitly, but courts might interpret the rule against discriminating due to biological sex to provide that protection. 
  • Moratorium on Employment-Related Local Ordinances. HB2 originated in response to the Charlotte City Council's addition of LGBT protections to the city's non-discrimination ordinance. HB2 nullified that local rule and prohibited all cities and counties from making their own local nondiscrimination policies. House Bill 142 returns power to local governments, so that they may enact their own nondiscrimination policies, effective December 1, 2020. After that point, any city may add further discrimination protections based upon gender identity, sexual orientation, or other characteristics. Until then, they cannot. So, between now and December 1, 2020, North Carolina's nondiscrimination policies, regardless of locality, are governed exclusively by state statute and federal law, save for a few limited exceptions for entities that contract with certain local governments. For most private employers in North Carolina, then, the state's nondiscrimination laws remain as they were prior to HB2.

For the moment, private employers doing business in North Carolina have some certainty about bathroom access rules, state law wrongful discharge claims, and the scope of workplace nondiscrimination protections afforded to workers. However, on the federal level, issues of protection for members of the  LGBT community are working their way through the court system. In late March, a Circuit Court of Appeals in Chicago issued a decision holding that employment discrimination based on sexual orientation constitutes sex discrimination. Meanwhile, a Circuit Court of Appeals in Atlanta reached the opposite conclusion. The Fourth Circuit, which covers North and South Carolina, has not examined this question recently, which seems headed for debate and final resolution at the United States Supreme Court.

Authors
Alexander L. Maultsby
T (336) 378-5331
F (336) 378-5400
Eric A. Snider
T (919) 755-8758
F (919) 838-3111
Associated Attorneys
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