Keep It In The Bathroom If You Can: Effects And Implications Of North Carolina House Bill 2

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Authored by Ashley P. Holmes

On March 23, 2016, the North Carolina General Assembly passed House Bill 2 (“HB2”), a bill prohibiting and limiting protections for transgender people in a variety of settings. While it is clear that the now infamous “Bathroom Bill” has become a lightning rod issue in an election year, what is less clear is how, exactly, HB2 will intersect with existing North Carolina law.

For instance, the language of HB2 prevents local school boards from adopting policies that would allow transgender students who have not yet undergone gender reassignment surgery to use multiple occupancy bathrooms or changing facilities that are designated for the gender with which they identify. Soon after the passage of HB2, however, the U.S. Court of Appeals for the 4th Circuit found that a transgender teen (born female but identifying and living as a male) could move forward in a lawsuit against his school for refusing him access to the multiple occupancy bathroom that matched his gender identity.  In making its ruling, the 4th Circuit relied upon the U.S. Department of Education’s previously stated position that schools violate Title IX when they prohibit students from using bathrooms that match their gender identity.  Although the school facing the lawsuit is located in Virginia, North Carolina is in the 4th Circuit, and the ruling could lead to similar outcomes in lawsuits filed by North Carolina residents.

HB2 has already led to a showdown between the federal government and North Carolina’s governor, Pat McCrory.  In early May, the U.S. Justice Department informed McCrory that HB2 was in violation of federal civil rights law and sought assurance that North Carolina “will not comply with or implement HB2.”  Instead of offering the Justice Department the assurances it sought, McCrory filed a declaratory action seeking a ruling that HB2 is not in violation of federal civil rights laws; on the very same day, Attorney General Loretta Lynch announced that the Justice Department would file a lawsuit against North Carolina based on violations of federal civil rights laws.

In addition to the bathroom issue, HB2 also contains language that calls into question whether transgender employees may bring a civil action under North Carolina law for workplace discrimination. Although employees may still pursue federal discrimination actions under applicable federal laws, including Title VII, which applies to companies with 15 employees.  Federal actions also, in general, require plaintiffs to make substantial investments in litigation early on in the process, as discovery begins sooner than in state courts, and the early costs associated with federal court could prevent plaintiffs from pursuing their actions at all.

HB2 also includes provisions prohibiting municipalities from passing regulations that would raise the minimum wage paid by private employers or impose any “regulation or control on a private contractor’s employment practices.”

Although most of the focus has been on the law’s potential effects on transgender persons, HB2 includes a wide-ranging set of provisions that could have significant impacts on municipal and employment law in North Carolina.  The long-term effects of the law are still unclear, but the law appears to affect much more than who uses which bathroom.  Employers should remain aware of the law and any challenges or changes to it that may come in the future.

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