Williams v. Blue Cross Blue Shield of NC
2003 N.C. LEXIS 595, 581 S.E.2d 415, 357 N.C. 170 (2003)
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Rule of Law:
Under Article II, Section 24 of the North Carolina Constitution, the General Assembly may not enact a local act that authorizes a single county to create and enforce its own employment discrimination laws, as such legislation constitutes a prohibited local regulation of labor and trade.
Facts:
- In 1987, the Orange County Board of Commissioners established the Orange County Human Relations Commission (HRC).
- The HRC conducted hearings and determined that discrimination existed in Orange County on the basis of race, sex, sexual orientation, veteran status, and other classifications.
- Following these findings, the Board of Commissioners requested enabling legislation from the North Carolina General Assembly to create a comprehensive civil rights ordinance.
- The General Assembly ratified a series of acts between 1991 and 1995 that specifically authorized Orange County to adopt such an ordinance.
- On June 6, 1994, Orange County enacted the Orange County Civil Rights Ordinance, which prohibited employment discrimination and created protected classes not covered by state or federal law, such as 'familial status' and 'veteran status'.
- The Ordinance created a local enforcement mechanism, allowing the HRC to investigate claims, issue subpoenas, and grant right-to-sue letters for private lawsuits in state court.
- Mary Williams, an employee of Blue Cross Blue Shield of North Carolina (BCBSNC), alleged she was forced to resign due to her age and sex.
- Williams filed claims of discrimination against BCBSNC with both the HRC and the federal Equal Employment Opportunity Commission (EEOC).
Procedural Posture:
- Mary Williams sued BCBSNC in Superior Court, Orange County, alleging wrongful discharge based in part on violations of the Orange County Civil Rights Ordinance.
- BCBSNC removed the case to the U.S. District Court for the Middle District of North Carolina.
- The federal court remanded the case back to the Superior Court, Orange County, because Williams asserted only state law claims.
- In state court, BCBSNC filed a counterclaim for a declaratory judgment against Orange County and its related commissions (counterclaim defendants), arguing the enabling legislation and the Ordinance were unconstitutional.
- BCBSNC and the counterclaim defendants filed cross-motions for summary judgment.
- The trial court granted summary judgment for BCBSNC, ruling the employment provisions of the Ordinance were unconstitutional and enjoining their enforcement.
- The counterclaim defendants appealed the trial court's order, and the North Carolina Supreme Court granted discretionary review before the case was heard by the intermediate Court of Appeals.
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Issue:
Does state enabling legislation that authorizes a single county to enact an employment discrimination ordinance violate Article II, Section 24 of the North Carolina Constitution, which prohibits local acts regulating labor or trade?
Opinions:
Majority - Edmunds, Justice
Yes, state enabling legislation that authorizes a single county to enact an employment discrimination ordinance violates Article II, Section 24 of the North Carolina Constitution because it is a prohibited local act regulating labor and trade. The court's reasoning proceeded in two parts. First, it determined the enabling legislation and the resulting Ordinance were 'local,' not 'general,' acts. Applying the 'reasonable classification' test, the court found no rational basis to justify treating Orange County differently from North Carolina's other 99 counties with respect to employment discrimination. The record contained no evidence that employment practices in Orange County were so unique as to warrant special legislation. Allowing such an act would lead to a 'balkanization' of state law, creating a patchwork of employment standards that the constitution was designed to prevent. Second, the court concluded that the act impermissibly 'regulates labor' and 'trade.' By governing numerous aspects of the employer-employee relationship—from hiring to termination—and imposing specific requirements on employers, the Ordinance directly regulates labor. As most employers affected are businesses for profit, it also regulates trade. The court rejected the argument that the legislation was merely 'permissive,' stating that a statute's validity is judged by what is possible under it, not just what has been done. Finally, the court found the Ordinance exceeded the county's inherent police powers because it created a new private cause of action, a power not granted by general statutes.
Analysis:
This decision significantly reinforces the principle of legislative uniformity under the North Carolina Constitution, limiting the ability of local governments to create substantive rights and regulations in areas preempted by the state's prohibition on 'local' legislation. It establishes a strong precedent against county-by-county or city-by-city frameworks for fundamental economic activities like labor and trade. The ruling curtails 'home rule' authority in these specific fields, requiring that regulations like employment discrimination protections be established through general laws applicable statewide, rather than through piecemeal local ordinances. This impacts future attempts by local governments to enact progressive labor policies, such as higher minimum wages or expanded employee protections, that exceed state or federal standards.
