North Carolina Supreme Court Finds Communications of Professor’s Negative Review Findings to Other University Officials Insufficient to Constitute Publication

As previously discussed, the North Carolina Supreme Court recently ruled, in the case of White v. Trew, that an employment defamation action brought by a public University professor against his department head should have been dismissed at the trial court level.  As we explained last week, the Supreme Court first determined that the plaintiff’s action against his department head, a state employee, failed on sovereign immunity grounds.  The Court also determined that the department head’s communication of the negative review findings to NCSU’s College of Engineering Dean and to the University’s in-house counsel did not constitute a publication of the allegedly defamatory statements in any event.  The lack of publication constituted an additional ground for dismissing the complaint.

The Court’s discussion of this second dismissal basis was relatively short and straightforward.  To be actionable, a defamatory statement must be publicized, or communicated to third-party.  While the defendant in this case did share the allegedly defamatory statements with other persons, several state regulations and statutes allowed him to do so.  The Court cited to various regulations that require the department head to review faculty member performance and “to keep the appropriate dean apprised on the status of the reviews.”  Additionally, the regulation authorized the department head to consult with tenured faculty of the department and to “seek such other advice as the department head deems appropriate.”  Finally, the regulation provided that the written review would become part of the personnel file, which would be open for inspection by “any individual in the chain of administrative authority above the faculty member.”

The Court additionally cited to similarly worded state statutes.  From these authorities, the Court concluded that the dean had a clear right to review the review contents and that it was reasonable for the department head to have consulted in-house counsel given the contentious nature of his relationship with the professor under review.  The Court reasoned that it would run contrary to the referenced statutory and regulatory directives to have required the defendant to keep information about the plaintiff’s allegedly hostile and aggressive workplace behavior to himself.  Consequently, the defendant’s communication of the review findings in conformance with the rights and obligations imposed by the statutes and regulations could not constitute a publication for purposes of a libel suit.

On this particular issue, the Supreme Court based its ruling entirely upon the extensive statutory and regulatory language, which provided extensive support for the Court’s reasoning.  It is noteworthy, however, that the Court did not also characterize the communications as privileged in nature.  Other cases have acknowledged that statements communicated in good faith between persons sharing a common interest or duty and relevant to that common interest or duty enjoy a qualified privilege.  By providing no discussion of privilege protection, the ruling arguably supports a narrow application of the qualified privilege in the context of discussing employee review findings.

The law firm of Sharpless & Stavola, P.A., based in Greensboro, North Carolina, provides counsel and representation in the area of employment defamation.  Please contact us with questions or concerns relating to this or other North Carolina employment law issues.

It’s the Most Wonderful Time of the Year – for Social Host Alcohol Liability

So what could the holiday season possibly have to do with North Carolina employment law?  Unfortunately, quite a lot.  Potential employer liability issues abound with year-end parties, where employees are encouraged to participate in festivities free of the usual work place rules, constraints, and inhibitions.  Add to the relaxed environment a free flow of alcohol, and the risk of liability arising from various employee indiscretions increases exponentially.  Much has been written, for example, about the potential for sexual harassment claims to arise from such circumstances.

Another issue that employers and individuals frequently overlook is the potential for social host liability for alcohol related motor vehicle accidents.  Like many jurisdictions, North Carolina law allows persons injured by drunk drivers to sue host providers of alcohol in certain situations.  Under North Carolina’s dram shop statute, for example, a person or entity who furnishes alcohol to a minor can be sued by victims of motor vehicle accidents later caused by the underage or intoxicated driver.  North Carolina statute also prohibits the sale or giving of alcohol to a noticeably intoxicated person.  North Carolina case law also recognizes negligence based theories under which persons can be assessed with tort liability for injuries causes by a drunk driver.

With these principles in mind, consider the typical holiday party.  Often held at a management member’s home, a standard staple is a bar, where courtesy alcoholic beverages are served.  Employees are frequently invited to bring guests, which opens the possibility for underage dates, siblings, student interns, and other guests.  What would normally be considered inappropriate activity is frequently accepted.  Indeed, many people view boisterous activity as directly related to the success of the party.  Conduct that would otherwise be deemed unprofessional and unacceptable is typically expected and, to some extent, welcomed as employees are encouraged to “blow off steam” and build camaraderie.  All too often, guests are served alcohol beyond the point of inebriation and permitted to drive home.

What are some good strategies for minimizing the risk in this area?  Consider the following:

• Hire a professional bartender, one who is trained to notice signs of intoxication.
• In addition to beverages, serve food, which slows the absorption of alcohol and, hopefully, reduces the amount of alcohol consumed.
• Offer soft drinks as well as alcohol.  With surprising frequency, holiday parties overlook soft drinks and/or make them less available to attendees.  Offer a variety of soft drinks so that guests do not feel pressured into drinking alcohol.
• Have one or more designated drivers available.  Instruct these persons to monitor the crowd for potential problems and to take the initiative in offering rides to suspect individuals.
• Before the party, make it known that employees are expected to behave responsibly during the party.

These same principles apply to private parties hosted by individuals.   

Finally, if you have questions about social host liability, or if you are confronting legal issues as a result of an alcohol related accident, be sure to consult attorneys experienced in this important aspect of North Carolina law.

North Carolina Court of Appeals allows Employment Law Action to proceed against State University despite Sovereign Immunity argument

The North Carolina Court of Appeals recently allowed an employment law action to proceed against a North Carolina university.  The case, Martinez v. The University of North Carolina, recognizes the right of individuals to sue the State in cases arising from breach of employment contract.

The plaintiff was a former provost of Winston-Salem State University who was asked by the school’s chancellor to resign his provost position and accept a full-time faculty position.   The plaintiff agreed to the request, and the parties entered a written contract to confirm the terms of the transition.  Under the contract, the plaintiff would continue to receive a full administrative salary of $180,000.00 until June 30, 2009.  He would then “retreat” to the Faculty of the School of Education where he would receive a salary commensurate with salaries of other senior faculty members.

As the transition date approached, WSSU notified the plaintiff that his annual faculty salary would be $85,000.00.  The plaintiff, feeling that this salary was not commensurate with salaries of similarly situated faculty members, initiated a grievance.  A faculty grievance committee determined that the salary was appropriate.  The plaintiff then appealed, in turn, to the new provost and to the chancellor of WSSU, both of whom affirmed the decision.

The plaintiff then filed suit for breach of contract.  WSSU moved to dismiss the suit on grounds that sovereign immunity prevented the suit.  The trial court granted the motion and dismissed the case.   In a decision issued last week, the North Carolina Court of Appeals reversed this ruling, allowing the case to proceed.  The ruling is a significant precedent inasmuch as it permits plaintiffs to circumvent a powerful governmental defense in North Carolina employment law cases based on breach of contract.

Sovereign immunity is a doctrine that generally prevents the State of North Carolina from being sued unless it has consented to the suit.  In considering the trial court’s dismissal on this basis, the Court of Appeals applied an exception to the doctrine.  The exception holds that when the State, through authorized officers and agencies, enters into a valid contract, it implicitly consents to being sued for damages in the event of a breach.  In such circumstances, the state occupies the same position as any other litigant. 

Because WSSU, as an agency of the State, entered into an employment contract with the plaintiff, the Court of Appeals determined that it waived sovereign immunity in the plaintiff’s action for breach of that contract.  Sovereign immunity is often a difficult defense to overcome in suits brought against the government.  The Martinez precedent provides a significant limitation to this defense in North Carolina employment law matters.

Federal Court dismisses Age Discrimination suit brought by North Carolina employment applicant

A recent North Carolina employment law decision confirms the importance of timely filed EEOC charges and adequately framed pleadings in employment discrimination actions.  The case, Hansen v. Siemens Energy, 2012 Westlaw 5388920 (W.D.N.C. 2012), reaffirms important procedural defenses that can arise in response to defectively grounded or presented claims of employment discrimination.

The plaintiff, Elmer Hansen, unsuccessfully applied for a welder maintenance position with Siemens Energy on two separate occasions.  He first applied on September 16, 2010 by electronically uploading his resume to the company’s career website.  After completing an online assessment, Mr. Hansen received a required Career Readiness Certificate, but he did not thereafter receive an invitation to participate in the next phase of training. 

Roughly one year later, Mr. Hansen learned from a CharlotteObserver newspaper article that Siemens still had need for skilled workers.  Mr. Hansen then re-applied for the same welder-maintenance position in January of 2012.  After again receiving no invitation to interview, Mr. Hansen filed a charge of discrimination with the EEOC in March of 2012.  

Mr. Hansen later filed a federal lawsuit against Siemens in which he alleged that the company failed to hire him, on both occasions, because of age discrimination.  Siemens filed a motion to dismiss the complaint, which the Court recently granted.

In its ruling, the Court first dismissed the employment discrimination claim arising from the 2010 application because the plaintiff failed to file a timely EEOC charge of discrimination with respect to that application.  Under the applicable AgeDiscrimination in Employment Act, a person alleging age discrimination must file a charge of discrimination with the EEOC within 180 days of the discriminatory act.  Because the plaintiff’s charge of discrimination was not filed until March of 2012, the Court made short work of dismissing the age discrimination claim as to the 2010 application.

The Court then dismissed the remaining age discrimination claim on grounds that the plaintiff failed to state a claim for relief adequately with respect to the 2012 application.  Here, the Court noted the plaintiff’s obligation to plead facts sufficient to render the claim of age discrimination plausible, as opposed to merely conceivable.  The Court cited to the United States Supreme Court’s Twombly line of cases for this principle.

The Court then determined that the plaintiff’s complaint, even as to the 2012 employment application, was fatally defective in several particulars.  For example, the Court noted that the complaint contained no allegation as to whether the plaintiff’s application was, in fact, rejected, or whether the position sought remained open or was filled by a similarly qualified younger person.  In fact, the complaint failed to present any allegations with respect to what other applicants were considered and/or chosen, or how an inference of discrimination could otherwise be supported.  The Court found the plaintiff’s mere conclusory statement that he believed discrimination had occurred insufficient to state a valid cause of action.

Notably, the plaintiff in this case represented himself in what is known as a pro se capacity.  Early in its decision, the Court noted that pro se complaints are to be construed liberally so as “to ensure that valid claims do not fail for lack of legal specificity.”  The Court further explained that courts must look beyond the face of the complaint to allegations made in any materials filed by the pro se plaintiff in order to ensure that “form does not trump substance.”  At the same time, the Court emphasized that, under the Twombly line of authority, even a pro se plaintiff is obligated to plead facts sufficient to “budge claims across the line from conceivable to plausible.” 

After weighing these somewhat competing considerations, the Court had no apparent reservation about dismissing the case.  The ruling therefore underscores the importance of capable counsel for all parties in employment litigation.

Changes to North Carolina’s Unemployment Insurance Laws are Good News for Terminated Workers

A frequently litigated North Carolina employment issue is the question of whether a terminated employee should be disqualified from unemployment compensation benefits due to misconduct.  North Carolina employment law recently saw statutory changes in this important area that arguably increase the burden that an employer must carry in order to deny a terminated employee unemployment compensation benefits on this ground.

Under North Carolina law, a terminated employee is disqualified from receiving unemployment compensation if the employee was terminated due to misconduct connected with the employee's work. Employee misconduct, sufficient to disqualify an employee from benefits, was previously defined as intentional misconduct that shows a disregard of the employee's job responsibilities or carelessness so extreme as to manifest an equal level of disregard by the employee.  This important disqualifying definition was found in North Carolina General Statute 96-14(2).

In its 2011 session, the North Carolina General Assembly enacted amendments to this statute through Senate Bill 828.  In so doing, the General Assembly rewrote the statute’s definition of the phrase, “misconduct connected with the work.”  Under the amended definition, which became effective November 1, 2012, the pivotal phrase now means:

conduct evincing a willful or wanton disregard of the employer's interest as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of an employee or has explained orally or in writing to an employee or conduct evincing carelessness or negligence of such degree or recurrence as to manifest an intentional and substantial disregard of the employer's interests or of the employee's duties and obligations to the employer.

While this newly implemented definition, on an initial reading, may not appear to significantly change its predecessor, the new language goes to some additional length to underscore the level of employee culpability needed to preclude benefits.  The amended definition, for example, speaks of “willful or wanton disregard,” as opposed to a mere disregard of employer interest or standards.  Similarly, the new definition now refers to “intentional and substantial disregard” in defining the previously unspecified degree of employee carelessness or negligence that can support disqualification. 

The General Assembly went on to amend a portion of the same statute, which previously listed a number of non-exclusive examples of employee misconduct that constitute a sufficient level of misconduct.  The amended statute now states that the examples listed constitute prima facie evidence of misconduct, which may be rebutted by the employee.  Previously, the statute made no provision for employee rebuttal.

Finally, the General Assembly added to the list of potential disqualifying grounds the following:

Refusing to perform reasonably assigned work tasks or failing to adequately perform employment duties as evidenced by no fewer than three written reprimands in the 12 months immediately preceding the employee's termination.

The first portion of this newly added basis for disqualification is nothing new, as insubordination has long been considered a sufficient ground for denying benefits.  The additional language, however, appears significant because of the level of employee fault that must be proven in order to disqualify an employee from benefits due to inadequate work performance.  Under the added language, failure to perform work duties adequately is grounds for denial if evidenced by at least three written reprimands during the 12 months before termination.

Taken as a whole, the above changes to North Carolina General Statute 96-14(2) appear to raise the bar for employers wishing to deny unemployment compensation benefits to terminated employees.  The amendments to the statute evidence that a heightened level of employee fault will be required and that, in the case of inadequate work performance, multiple written warnings will be required in order to substantiate the employer’s claim of poor performance.