On March 23, 2016 the North Carolina Legislature enacted House Bill 2 (“HB2”) at a special one-day session of the General Assembly. Governor McCrory signed the bill the same evening it was passed. Since passage of the bill, North Carolina has come under criticism from the NBA to Bruce Springsteen. I’m writing to give North Carolina residents, businesses and governments a brief summary of how this bill effects them individually.
North Carolina Residents
Each person using a multiple occupancy restroom in a North Carolina school or government building must use the restroom identified with the sex stated on that person’s birth certificate. For instance, a transgender that identifies as a female, but was born a male, must use the mens’ room in a state run establishment. The law does not take gender altering surgeries into account. While the law designates which bathrooms must be used, the law does make it a crime or otherwise provide an enforcement mechanism to prevent transgender individuals from using the bathroom of their choice.
HB2 also alters the North Carolina Equal Employment Practice Act (“EEPA”) in two material respects. The EEPA has always provided that that it is against the public policy of North Carolina to discriminate against anyone on the basis of race, religion, color, national origin, handicap or sex. HB2 alters the law to change sex as a prohibited ground to “biological sex.” A transgender person would not have a basis to complain in light of the amendments because only biological sex discrimination is protected.
If you feel like you’ve been discriminated on the basis of biological sex or any of the other protected grounds, HB2 clarifies your recourse under North Carolina law. The EEPA has always provided that the Human Relations Commission in the Department of Administration shall be tasked with receiving discrimination charges from the Equal Employment Opportunity Commission (“EEOC”). The EEPA employers the agency to “use its good offices to effect an amicable resolution of the charges of discrimination. “HB2 clarifies the intent of the law by stating that the article does not create and shall not be construed to create a private right of action. This means that all employment discrimination lawsuits must be based upon federal law.
Prior to HB2, North Carolina Appellate Courts allowed employees to sue employers for discrimination based upon the EEPA. These suits will no longer proceed in state court. Previously filed lawsuits are also jeopardized by HB2 as the law does not provide a safe harbor for those with pending wrongful termination claims made pursuant to the EEPA. HB2 does not effect the analogous federal law claims for relief that have varying statutes of limitation up to four years.
North Carolina Businesses
HB2 does not impose any additional burdens on North Carolina businesses. The multiple occupancy restroom requirements rest solely with government operated facilities. Businesses will no longer have to defend discrimination actions in North Carolina State Court. There are positives and negatives for business here. The pros are caps on damages in federal court along with a better developed body of employment law, while the cons are longer statute of limitations exposure and attorney fee shifting provisions.
North Carolina Businesses will also have the certainty of only dealing with state and federal regulation after passage of HB2. Local governments are now prohibited from enacting anti discrimination statutes that effect businesses within their jurisdiction or that place conditions upon winning bids.
North Carolina Local Governments
North Carolina municipalities, counties, school boards and other governmental offices must now identify and clearly mark all multiple occupancy restrooms. Any existing anti discrimination laws made by a local government are now made void. HB2 does not appear to prohibit a government from adopting a policy that it will not discriminate against LGBT individuals, but the government may not place such a requirement on local businesses.