On July 18, 2016, North Carolina Governor Pat McCrory signed into law a bill that restores the right of employees to bring wrongful discharge claims for employment discrimination based on the public policy stated in the N.C. Equal Employment Practices Act (“NCEEPA”) (N.C.G.S. 143-422.2). The NCEEPA states that it is the public policy of the state to prohibit discrimination based on race, religion, color, national origin, age, sex, or handicap by employers that regularly employ 15 or more employees. It was initially enacted in 1977 but it did not contain any language allowing employees to file wrongful termination claims or any other type of claim.

North Carolina courts started recognizing private causes of action for wrongful termination under the NCEEPA based on the public policy exception to at-will employment. In other words, the courts recognized that the NCEEPA was the public policy of North Carolina and any termination in violation of the statute could create a common law claim for wrongful discharge in violation of public policy.

On March 23, House Bill 2 (“HB2”) was passed by the General Assembly and signed into law that same day by Governor McCrory. One specific provision in HB2 eliminated employees’ right to sue in state court for violation of the NCEEPA. However, on April 12 Governor McCrory issued an executive order to expand the state employment policy to cover sexual orientation and gender identity, and to affirm the rights of local governments and businesses to establish their own anti-discrimination policies for employees. Governor McCrory also promised to seek legislation to reinstate the right to sue in state court under the NCEEPA for discrimination (the “fix”). In the final days of the session, Governor McCrory met with House and Senate Republicans several times trying to convince them to work with him to pass the “fix”. His efforts were successful, and on July 1, in the final hour of the session, both chambers passed a bill to restore an employee’s right to bring a state court claim for wrongful termination under the NCEEPA.

This new law reestablishes a clear path for employees to file state court claims of wrongful discharge pursuant to the public policy stated in the NCEEPA. The law permits claims of wrongful discharge only, and it does not allow employees to file state court claims of employment discrimination on any other basis including harassment, hostile work environment, disparate treatment, failure to hire, or constructive discharge. It also imposes a shorter statute of limitations period of one year (it was previously three years). This impacts state court claims only, and employers may continue to be sued for wrongful termination under federal law.