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Any North Carolinian not living under a rock has seen or heard something about North Carolina House Bill 2 by now. But what does this law, also known as the Public Facilities Privacy & Security Act, mean for private employers in North Carolina when it comes to managing employees? Not as much as you might think. Let’s dig into it.

HB2 does not affect private employers’ harassment, discrimination, or EEO policies

Private employers in North Carolina may keep any existing harassment, discrimination, or EEO policies they have. Private employers are free to revise such policies or adopt new ones – including policies preventing harassment or discrimination based on sexual orientation or gender identity.

HB2 does not supersede the EEOC’s position on sexual orientation and transgender discrimination or harassment

Employers with 15 or more employees (private employers and also federal, state, and local government employers) are covered by Title VII of the Civil Rights Act of 1964, which prohibits, among other things, discrimination based on sex. The Equal Employment Opportunity Commission (EEOC), the federal agency that enforces Title VII, interprets Title VII to prohibit harassment or discrimination based on sexual orientation or transgender status. This includes a requirement that employers allow a transgender employee to use the restroom that corresponds to the gender with which the employee identifies. Employers that fail to allow restroom use in this way – or that allow employees to be harassed or discriminated against based on their sexual orientation or gender identity – risk being sued by the EEOC or by individual employees under Title VII.

HB2 eliminates a North Carolina state law wrongful termination cause of action

Before HB2, a North Carolina employee who was fired because of his or her race, religion, color, national origin, age, sex, or disability could sue his or her previous employer under a state law “wrongful discharge in violation of public policy” claim. These claims could be filed without an accompanying Title VII claim, which allowed a plaintiff to avoid having the case removed to federal court, ensuring his or her case would be litigated in state court. This type of state law claim did not have Title VII’s 180-day deadline to file an administrative complaint, but instead had a three-year statute of limitations. Also, this state law claim did not have Title VII’s cap on maximum damages, but damages were instead theoretically unlimited. HB2 eliminates the possibility of a terminated employee going forward with a “wrongful termination in violation of public policy claim” based on an argument the employee was illegally fired based on his or her race, religion, color, national origin, age, sex, or disability. Plaintiffs will now have to pursue such claims only under Title VII. Legislature restored wrongful discharge claim eliminated by HB2. Read our update.

Although HB2 has other provisions and effects, employer-employee relationships for private employers are little changed. Employers with questions about HB2’s effect on the workplace should contact employment counsel for specific, detailed advice.

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