Bob Hagemann is a partner at Poyner Spruill LLC in Raleigh, NC and served in the Charlotte City Attorney's Office for twenty-four years, the last seven as City Attorney. This post is based on his presentation for the 2021 North Carolina Law Review Symposium "Home Rule in the 21st Century"
In 2016, the Charlotte City Council considered joining most other major cities in this country in prohibiting discrimination in places of public accommodation based on sexual orientation, gender identity, and gender expression. Some publicly questioned whether the City had the legal authority to do so.
While not a “home rule” state, North Carolina’s statutory grant of the police power to local governments is, subject to common preemption principles, quite broad:
A city may by ordinance define, prohibit, regulate, or abate acts, omissions, or conditions, detrimental to the health, safety, or welfare of its citizens and the peace and dignity of the city….
G.S. § 160A-174(a)).
And the general grant is supplemented by a more specific grant of authority to regulate businesses:
A city may by ordinance, subject to the general law of the State, regulate and license occupations, businesses, trades, professions, and forms of amusement or entertainment and prohibit those that may be inimical to the public health, welfare, safety, order, or convenience.
G.S. § 160A-194(a)).
While no case law in North Carolina directly addresses the scope of that authority in this context, numerous court decisions across the country characterize nondiscrimination statutes and ordinances as an exercise of the police power. The City Attorney advised the Council that, in his opinion, the City had the requisite authority. The City Attorney also observed that if the City lacked the authority to add these characteristics to the nondiscrimination ordinance that dated back to 1968, it necessarily follows that the preexisting prohibition on discrimination based upon race, color, religion, sex, or national origin was equally unauthorized.
Following a lengthy public hearing where emotions ran hot on both sides, the Council adopted the amendments. The North Carolina General Assembly and the Governor quickly responded by introducing, enacting, and signing into law House Bill 2 (“HB2”) all in one day. Often referred to as “the bathroom bill” because it required public agencies to ensure that multiple occupancy bathrooms be designated for and only used by persons based on their biological sex (i.e., what is listed on one’s birth certificate), key for purposes of this discussion, HB2 expressly preempted local ordinances that regulate or prohibit discriminatory practices in employment and in places of public accommodation. In doing so, the legislature declared that that “the regulation of discriminatory practices in employment [and places of public accommodation] is properly an issue of general, statewide concern.” Yet the State’s mechanism to address that statewide concern was simply a conciliation process, a process that lacked any real governmental enforcement mechanism or private cause of action. In addition, HB2 amended “sex” discrimination to read “biological sex” discrimination.
Following a year of national publicity, economic fallout, and plenty of politics, the General Assembly enacted House Bill 142 entitled “An Act to Reset [HB2].” While reported as a repeal of HB2 (it did repeal the bathroom mandate and other unrelated provisions), House Bill 142 stated that “[n]o local government in this State may enact or amend an ordinance regulating private employment practices or regulating public accommodations.” Notably, this prohibition had an expiration date of December 1, 2020. Since the sunset, a number of North Carolina local governments, including Charlotte, have adopted ordinances that prohibit discrimination in employment and public accommodations, including discrimination based on sexual orientation, gender identity, and gender expression.
Ironically, House Bill 142 also provides that all state agencies and local governments “are preempted from regulation of access to multiple occupancy restrooms, showers, or changing facilities, except in accordance with an act of the General Assembly.” And since the General Assembly has not otherwise acted, and this provision was not subject to the sunset, access to multiple occupancy facilities is, essentially, unregulated by State or local governments in North Carolina.
While there has been no indication that the General Assembly intends to respond to the growing list of local governments that have adopted nondiscrimination ordinances, there is always the chance of litigation that raises the question of authority. In addition to the statutory grant of authority cited above, query whether the General Assembly has offered its interpretation by first preempting local authority through HB2, and then by sunsetting the preemptive language found in House Bill 142. Stated another way – why preempt in the first place if authority was lacking? And does not the legislative sunset of preemptive language breathe new life into authority that once existed?