Wright v. N.C. Office of State Human Res.

824 S.E.2d 925 (Table)

Veronica WRIGHT, Petitioner,

v.NORTH CAROLINA OFFICE OF STATE HUMAN RESOURCES, Respondent.

No. COA18-276

Court of Appeals of North Carolina.

Filed: March 19, 2019

Law Offices of Michael C. Byrne, by Michael C. Byrne, for Petitioner-Appellee.

Attorney General Joshua H. Stein, by Special Deputy Attorney General Matthew Tulchin, for Respondent-Appellant North Carolina Office of State Human Resources.

McGEE, Chief Judge.

North Carolina Office of State Human Resources ("Respondent") (hereinafter "OSHR") appeals from a final decision of the Office of Administrative Hearings ("OAH") granting a motion for summary judgment by Veronica Wright ("Petitioner") and denying OSHR's motions for summary judgment.

I. Factual & Procedural History

OSHR serves as the "Center of Human Resources Expertise" for the State of North Carolina. OSHR posted a job opening for "Diversity and Inclusion Director" on 22 June 2015. Petitioner was offered that position by letter dated 4 August 2015. The letter provided the following information: Petitioner would begin employment 8 September 2015, would report to the State Human Resources Director, C. Neal Alexander, Jr. ("Director Alexander"), and would serve a probationary period of twenty-four months. Petitioner received a second letter dated 4 August 2015, which specified that the position was designated exempt managerial.¹

Then-Governor Pat McCrory reversed the position's exempt designation on 20 January 2016. Director Alexander subsequently approved the exempt designation reversal. Petitioner entered a twelve-month probationary period beginning 20 January 2016.

Roy Cooper (the "Governor") was elected Governor of North Carolina in November 2016. The General Assembly passed Session Law 2016-126 in 2016 that curtailed the Governor's authority by, inter alia : (1) reducing the number of positions from 1,500 to 425 that the Governor was authorized to designate as exempt; (2) conferring immediate career State employee status on a number of employees working in non-exempt positions; and (3) removing OSHR from the list of exempt positions. 2016 N.C. Sess. Law ch. 126, §§ 7, 8.

In a series of suits,² the Governor challenged the constitutionality of portions of Session Law 2016-126. The Governor specifically challenged the portions of Sections 7 and 8 of Part I of Session Law 2016-126, codified at N.C. Gen. Stat. § 126-5(d)(2c), which conferred immediate career status on employees in non-exempt positions (the "Exempt Positions Amendments"). The Chief Justice of the Supreme Court of North Carolina convened a three-judge panel of superior court judges, pursuant to N.C. Gen. Stat. § 1-267.1(b1) (2017), to hear the Governor's constitutional challenges. In Cooper v. Berger, ("Cooper I "), the three-judge panel held that the Exempt Positions Amendments unconstitutionally prevented the Governor from "taking care that the laws are faithfully executed."³ No. 16 CVS 15636, 2017 WL 1433245 (N.C. Super. Ct. Wake Cty. Mar. 17, 2017). The General Assembly subsequently repealed N.C. Gen. Stat. § 126-5(d)(2c), effective 25 April 2017.

Barbara Gibson ("Director Gibson") became Director of OSHR in January 2017. Director Gibson received a letter from the Governor's Office on 18 January 2017 designating Petitioner's position statutorily exempt pursuant to N.C. Gen. Stat. § 126-5(c1)(6). The next day, on 19 January 2017, Petitioner was given a letter explaining that her position was now exempt based upon the Governor's statutory authority to exempt positions in his office. That letter also notified Petitioner that her employment at OSHR was terminated effective "at the end of the workday January 19, 2017."

Petitioner filed a contested case petition on 1 February 2017 with OAH. Petitioner and OSHR each filed a motion for summary judgment. OSHR filed a second motion for summary judgment on 8 May 2017. Administrative Law Judge Melissa Owens Lassiter (the "ALJ") entered a final decision on 25 October 2017, denying OSHR's motions for summary judgment and granting Petitioner's motion for summary judgment.

II. Jurisdiction

As an initial matter, this Court's jurisdiction must be determined.

The General Assembly repealed N.C. Gen. Stat. § 126-34.1 and replaced it with N.C. Gen. Stat. § 126-34.02 in 2013. 2013 N.C. Sess. Law ch. 382, § 9.1(c). Pursuant to N.C. Gen. Stat. § 126-34.02 (2017), "[a]n aggrieved party in a contested case under this section" can appeal a final decision of OAH directly to this Court. However, the present case was filed under N.C. Gen. Stat. § 126-5(h) (2017), which provides "[i]n case of dispute as to whether an employee is subject to the provisions of this Chapter, the dispute shall be resolved as provided in Article 3 of Chapter 150B." Chapter 150B, unlike N.C.G.S. § 126-34.02, does not provide a direct right of appeal to this Court.

During oral argument before this Court, Petitioner's appellate counsel conceded the law regarding this Court's jurisdiction over this action is unclear. As a result, counsel for both parties requested this Court treat OSHR's brief as a petition for writ of certiorari . "This Court does have the authority pursuant to North Carolina Rule of Appellate Procedure 21(a)(1) to ‘treat the purported appeal as a petition for writ of certiorari’ and grant it in our discretion." Luther v. Seawell , 191 N.C. App. 139, 142, 662 S.E.2d 1, 3 (2008) (quoting State v. SanMiguel , 74 N.C. App. 276, 277-78, 328 S.E.2d 326, 328 (1985) ). In the interest of judicial economy, we elect to consider OSHR’s brief as a petition for writ of certiorari , grant the petition, and determine the merits of this appeal.

III. Analysis

OSHR contends the ALJ erred in granting Petitioner's motion for summary judgment in that: (1) Petitioner was not a career State employee because, at the time she was terminated, she had not worked in a non-exempt position for twelve consecutive months; and (2) the Governor had the authority under N.C. Gen. Stat. §§ 126-3(a), 126-5(c1)(6) (2017) to designate Petitioner’s position exempt and to summarily terminate her employment without cause. We disagree.

A. Standard of Review

This Court "appl[ies] the same review standard established by Rule 56 of the North Carolina Rules of Civil Procedure when reviewing an agency's summary judgment ruling, and our scope of review is de novo ." Heard-Leak v. N.C. State Univ. Ctr. for Urban Affairs , 250 N.C. App. 41, 45, 798 S.E.2d 394, 397 (2016). Accordingly, "the ultimate issue that [OSHR's] appeal presents for our consideration is the extent, if any, to which [the ALJ] appropriately entered summary judgment in favor of [Petitioner]." Meherrin Tribe of N.C. v. N.C. State Comm'n of Indian Affairs , 219 N.C. App. 558, 565, 724 S.E.2d 644, 649 (2012).

B. Career State Employee

Chapter 126 of the North Carolina General Statutes establishes the North Carolina Human Resources Act (the "SHRA"). The provisions of the SHRA apply to all non-exempt State employees. N.C.G.S. § 126-5(a)(1), (c). A "career state employee" is defined as one who "(1) [i]s in a permanent position with a permanent appointment, and (2) [h]as been continuously employed by the State of North Carolina or a local entity as provided in G.S. [§] 126-5(a)(2) in a position subject to the [SHRA] for the immediate 12 preceding months." N.C. Gen. Stat. § 126-1.1(a) (2017). A "probationary State employee" is one who has not yet worked the full twelve consecutive months in a non-exempt position following an exempt reversal. N.C.G.S. § 126-1.1. A probationary employee is exempt from the provisions of the SHRA. N.C.G.S. § 126-1.1(b).

OSHR contends that the ALJ erred in concluding Petitioner was a career State employee subject to the protections of the SHRA at the time she was terminated because (1) the notice requirement of N.C.G.S. § 126-5(g) was inapplicable to Petitioner, as her position's exempt designation was pursuant to statute, and (2) the Exempt Positions Amendments did not affect her status as a career State employee. Accordingly, we must determine the applicability of N.C.G.S. § 126-5(g) to a position designated exempt by statute and the effect of the Exempt Positions Amendments on Petitioner's status as a career State employee.

1. Notice

N.C.G.S. § 126-5(g) provides, in pertinent part: "No employee shall be placed in an exempt position without 10 working days prior written notification that such position is so designated." (Emphasis added). Petitioner received notification of her position’s exempt designation and termination on 19 January 2017. The basis of the designation was the Governor's authority, under N.C.G.S. § 126-5(c1)(6), to exempt positions within his office. As Petitioner was notified of her position's exempt designation on the same day the designation took effect, OSHR violated the statutory mandate of N.C.G.S. § 126-5(g).

Moreover, the North Carolina Administrative Code (the "Administrative Code") provides, in pertinent part:

(b) While most positions are filled through systematic recruitment, it is recognized that some positions in Stategovernment are exempt from various provisions of the State Human Resources Act because of the relationship between the position and the responsibility of elected or appointed officials expected to implement the public policy of the State. While these positions are exempt from various provisions of the [SHRA], they are subject to the following requirements:

....

(3) If an employee occupies a subject position that is subsequently designated as exempt, the agency shall provide written notification to the employee that the position has been designated exempt. The exemption shall apply to the employee 10 working days after receiving written notification.

25 N.C. Admin. Code 1H. 0630 (emphasis added). Thus, pursuant to the Administrative Code, an exempt designation does not take effect until ten days after an employee receives written notification. Id. Petitioner's exempt designation, therefore, became effective on 29 January 2017, ten...