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North Carolina Anti-Bias Laws Sprout as ‘Bathroom Bill’ Era Ends

Nov. 22, 2021, 10:30 AM

Workplace discrimination bans covering LGBTQ workers have been enacted this year in more than a dozen North Carolina locales including Charlotte, five years after that city’s earlier attempt at banning bias prompted the state legislature’s so-called Bathroom Bill, sparking national controversy.

State legislators barred North Carolina cities and counties from passing nondiscrimination ordinances after Charlotte said transgender people could use the public restroom of their choice. When the moratorium expired in December 2020, LGBTQ rights advocates were ready with a campaign aimed at local governments.

“Sometimes these high-profile fights illuminate discrimination and raise awareness that these protections are not inscribed in law,” said Kendra R. Johnson, executive director of Equality NC.

Sixteen cities and counties have passed nondiscrimination ordinances this year, most recently Durham County, a close neighbor to the state capital of Raleigh and the University of North Carolina at Chapel Hill. Johnson predicted there could be three or four more before the wave of new ordinances is finished.

The new measures created an archipelago of local laws for employers to navigate, said Greensboro, N.C., attorney Sarah Saint.

In Charlotte—the state’s most-populous city—the expanded protections against employment discrimination are set to take effect Jan. 1, banning bias based on familial status, sexual orientation, gender identity, gender expression, veteran status, pregnancy, and natural hairstyles. The city already barred discrimination based on race, gender, religion, national origin, ethnicity, age, and disability. Charlotte’s expanded protections covering public accommodations, passenger vehicles for hire, and procurement took effect Oct. 1.

The North Carolina trend follows a national movement toward expanded anti-bias protections, highlighted by the landmark 2020 Supreme Court decision in Bostock v. Clayton County that affirmed Title VII of the Civil Rights Act of 1964 includes sexual orientation and gender identity as classes protected against on-the-job bias.

More than half of the state’s new ordinances, including those in Charlotte and Durham County, also ban bias against natural hairstyles or textures that are traditionally associated with race or nationality. Hair-bias protections have spread since California first enacted a statewide ban in 2019. The hair bias bans have been enacted in 14 states and more than 30 cities, according to the CROWN Coalition, a campaign advocating for those policies.

Bathroom Law Preemption

But, unlike those bans on bias in the workplace, housing, and other public accommodations, local regulation of public bathroom and changing facility use remains permanently preempted, with the state legislature retaining that authority.

That preemption stems from 2016, when Charlotte passed its transgender bathroom choice law. Weeks later, the Republican-majority state legislature responded with H.B. 2, the measure that became known as the Bathroom Bill, preempting such local ordinances and requiring that people use facilities designated for the gender listed on their birth certificates.

H.B. 2 drew broad national attention and was slammed as a discriminatory law, including by leaders of the National Basketball Association, which canceled plans to hold the league’s 2017 all-star game in Charlotte.

The Republican-led legislature and newly elected Democratic Gov. Roy Cooper in 2017 passed a compromise bill, H.B. 142, which partially repealed H.B. 2 but kept in place a temporary ban on local nondiscrimination ordinances.

States with Republican-leaning legislatures often preempt local regulation of workplace conditions such as minimum wage or paid sick leave. It’s much less common for states to preempt local nondiscrimination ordinances—only Arkansas and Tennessee block those kind of local laws, according to the Movement Advancement Project, which maps state and local equal rights laws.

No Small-Employer Exemption

A key difference from federal anti-discrimination law is that the local North Carolina ordinances cover employers of all sizes, rather than exempting those with fewer than 15 employees as federal law does, said Saint, an attorney at Brooks, Pierce, McLendon, Humphrey & Leonard LLP in Greensboro.

That difference equates to expanded protections for LGBTQ workers but also new compliance concerns for small businesses accustomed to the federal exemption, said Saint, who represents employers as well as individuals.

“That’s one of the reasons why these ordinances have been moving forward, a knowledge about what Title VII actually says,” she said. “Employees thought Bostock was their savior, only to find out their employer wasn’t big enough for it to matter to them.”

Variations among the local ordinances also create a challenge for employers operating in multiple cities and counties around the state, Saint added.

“They all cover different protected categories. They all have different penalties,” she said. “That element of it makes it hard to navigate in North Carolina.”

Religious Claims

Alongside the policy wins for workers’ rights, employers seeking religious exemptions to anti-bias laws have enjoyed recent successes as well. Among those, a Texas federal judge in an Oct. 31 decision found for-profit businesses could be shielded from LGBTQ discrimination liability based on sincerely held religious beliefs. The decision is expected to be appealed to the U.S. Court of Appeals for the Fifth Circuit.

But winning a religious exemption from workplace discrimination claims can be difficult and depends on the specific facts of each case, as shown by a North Carolina federal judge’s September decision, finding a Charlotte Catholic school’s firing of a gay drama teacher was sex-based discrimination.

“At the very same time that you’re seeing an expansion of protections, you’re seeing these claims of religious freedom,” said Michelle E. Phillips, a labor and employment attorney focused on diversity and inclusion issues with Jackson Lewis P.C. in White Plains, N.Y.

The local ordinances mostly leave the question of religious exemptions up to courts to decide, she said.

But applying the discrimination bans to employers of all sizes could open the door to more frequent and contentious challenges with small businesses seeking exemptions on religious grounds, Phillips and Saint said.

“Family owned or sole proprietorships are going to have those religious beliefs more attributable to the employer,” Saint said.

To contact the reporter on this story: Chris Marr in Atlanta at cmarr@bloomberglaw.com

To contact the editors responsible for this story: Andrew Harris at aharris@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com