Partial HB2 Repeal Lets Fired Worker’s Lawsuit Go On

By: David Donovan March 20, 2017

When North Carolina’s lawmakers hurried HB2 through the legislature in a one-day special session last April, it originally contained a provision that prohibited workers from suing their former employers under state law for cases of wrongful termination based on discrimination.

That provision raised concerns from attorneys, and a few months later, with equal alacrity, legislators quietly undid that portion of HB2. But in their sudden U-turn, lawmakers created a conundrum for employment law attorneys. Prior to HB2, claims for wrongful discharge in violation of North Carolina public policy were previously subject to a three-year statute of limitations. The repeal bill reinstated that cause of action, but shortened the statute of limitations for bringing claims to one year.

So for employees terminated before HB2 was passed, which statute of limitations should apply? That question came up before a federal judge in the state’s western district, who ruled that fired workers must bring suit within three years of their termination, or one year of the new law’s passage, whichever would be sooner.

Anne Gannon is suing Morris-Jenkins, a heating and air conditioning company in Charlotte, alleging age and gender discrimination. She was discharged in July 2014 and filed her suit last September, after HB2 passed. Morris-Jenkins had the case removed to federal court and sought to have Gannon’s suit dismissed because it was filed more than a year after Gannon was sacked.

But on Feb. 28, U.S. District Court Judge Robert Conrad accepted the recommendation of a magistrate judge who ruled that the case could go forward.

The magistrate judge, David Cayer, said that it was well established that when lawmakers shorten a statute of limitations, the new limitations period starts counting from the time the new statute becomes law. So plaintiffs can file claims against former employers in North Carolina as long as they bring them within the old three-year time limit and before July 17 of this year—one year after the new statute of limitations became law. Since Gannon’s suit met both requirements, her case was allowed to proceed.

Josh Van Kampen, Kevin Murphy and Sean Herrmann of Van Kampen Law in Charlotte represent Gannon. Murphy said that the legislature’s sudden moves and counter-moves created a concerning situation for plaintiffs like his client.

“When [HB2] came out, this was an immediate concern in the plaintiff’s bar as to what the ramifications would be for people who were terminated before HB2 was enacted, or terminated between when the law was enacted and when the new law came out,” Murphy said. “So there was a good bit of confusion, but luckily there is some good North Carolina precedent out there that answered those questions.”

Murphy said that a contrary ruling would have created perverse incentives for plaintiffs’ attorneys to file lawsuits as quickly as possible, lest the legislature pull their cause of action out from under them.

Shalanna Pirtle and Stacy Wood of Parker Poe in Charlotte represent Morris-Jenkins. The attorneys declined to comment on the decision, citing the ongoing nature of the case.

Follow David Donovan on Twitter @NCLWDonovan