US Regional Employment 2021

Last Updated September 28, 2021

North Carolina

Law and Practice


Nelson Mullins Riley & Scarborough LLP is based in Raleigh, North Carolina, and has more than a century of labor and employment experience representing clients in federal and state courts and ADR venues both in North Carolina and throughout the USA. The employment team’s experience includes litigating federal and state anti-discrimination laws, wage and hour complaints, non-compete disputes, occupational safety concerns, and immigration and labor law issues. It also has a long and experienced track record litigating, trying and winning employment cases. Members of the team include this chapter's four co-authors, as well as John Branch, Nate Pencook, Hannah Kays, Andrew Brown, Cassie Holt and Shaniqua Singleton. The team is supported by the firm’s national employment team, which includes contributors Buzz Burwell and Jessica Jeffrey, and is chaired by Bret Cohen.

Given the evolving nature of the COVID-19 pandemic, there are constant updates to federal, state, and local health and safety guidelines and procedures for employers. As such, employers must be diligent and proactive in developing proper social distancing policies, implementing rigorous hygiene protocols, developing comprehensive safety procedures, and informing employees of detailed reporting and notification processes.

According to the US Department of Labor, some of the best practices that all employers should consider taking to protect workers regardless of vaccination status are the following:

  • conducting a workplace risk assessment for potential COVID-19 exposure;
  • preparing a response plan; and
  • taking steps to improve ventilation.

These activities are consistent with the Centers for Disease Control and Prevention (CDC) guidance to promote public health and workplace health.

A response plan may include identifying a workplace coordinator who would be responsible for COVID-19 issues and policies. The employer should examine policies for leave, telework and ways they can be flexible and non-punitive, so that sick employees can stay home and away from co-workers. Policies should also account for employees who may need to stay home with their children if there are school or childcare closures, or to care for sick family members.

When possible, employers are encouraged to be flexible with worksites (eg, telework) and flexible work hours (eg, staggered work shifts) to help establish policies and practices that are conducive to social distancing between employees and others. These response plans should be shared with employees and the employer’s expectations should be clearly communicated.

According to the North Carolina Department of Health and Human Services (NCDHHS), employers should not require documentation of a negative test before allowing an employee that tested positive for COVID-19 to return to work. Instead, an employee can end self-isolation and return to normal activities if they can answer yes to all the following questions.

  • Has it been at least ten days since the employee’s symptoms started?
  • Has it been 24 hours since the employee last had a fever without the use of a fever-reducing medication?
  • Have the employee’s symptoms, such as coughing and shortness of breath, improved?

In North Carolina, the following establishments, businesses and institutions are required to follow the NCDHHS guidance with respect to indoor face covering requirements and all other COVID-19-related restrictions and recommendations:

  • schools;
  • childcare facilities;
  • children’s day or overnight camps;
  • certain health care settings;
  • public or private transportation regulated by the state of North Carolina and North Carolina airports, bus and train stations or stops;
  • prisons; and
  • establishments that are providing shelter to people experiencing homelessness.

Additionally, NCDHHS encourages employers to incentivize their employees to receive COVID-19 vaccinations.

Title VII and the Americans with Disabilities Act (ADA) require an employer to provide reasonable accommodations for employees who, because of a disability or a sincerely held religious belief, practice or observance, do not get vaccinated for COVID-19, unless providing an accommodation would pose an undue hardship on the operation of the employer’s business.

As best practice, an employer introducing a mandatory COVID-19 vaccination policy should notify all employees that the employer will consider requests for reasonable accommodation on an individualized basis. An employer is not required to offer an accommodation that poses an undue hardship. However, the meaning of “undue hardship” is different under Title VII and the ADA. Under the ADA an “undue hardship” is a “significant difficulty or expense”, which is a high standard, with employers required to accommodate an employee if at all possible. This includes potentially moving the employee to another open position within the company, and in doing so, favoring the current employee over other applicants. Under Title VII an “undue hardship” is simply anything more than a de minimis cost or disruption to business operations. This could include something as simple as overtime costs, or production interruptions.

Additionally, the ADA requires that employers maintain the confidentiality of employee medical information, including employees’ COVID-19 vaccination status. While employers may still require employees to bring in documentation of their vaccination status, this information, like all other medical information, must be kept confidential and stored separately from the employee’s personnel files under the ADA.

In addition to the continuing impact of COVID-19 on the workplace, social justice movements, such as “Black Lives Matter” and “Me Too”, have recently accelerated diversity, equity and inclusion (DE&I) initiatives in organizations nationwide. Increased trainings, including unconscious bias training, diverse recruitment pools, and other employee-engagement measures are a few examples of DE&I workplace initiatives aimed at addressing some of the fundamental issues raised by “Black Lives Matter” and the “Me Too” movements. 

DE&I job listings increased exponentially after the murder of George Floyd in late May 2020, according to the Society for Human Resources Management. Organizations of all sizes are also utilizing company statements to match increasing demands from consumers and employees to show support for social justice issues. Workplace culture, diversity and inclusion are seemingly more important now than ever before as the HR Policy Association reports that 82% of global employers cited DE&I as a top concern in 2021.

The gig economy, especially through the COVID-19 pandemic, has transformed our lives, from ridesharing services such as Lyft and Uber to grocery and food deliveries from Instacart, DoorDash or Amazon Prime. The gig economy is also transforming the traditional workforce by offering flexibility and autonomy in the place of more traditional jobs. Within the framework of the gig economy, individuals seek work on their terms. Employers hire based on their immediate needs, instead of for long-term planning. The model can offer numerous benefits to employers, particularly in reducing costs, and filling talent gaps.

While the gig economy may sound like an ideal solution for some of the staffing shortages currently plaguing North Carolina, employers should consider how to classify gig workers. Are these workers “employees” or are they “independent contractors”? If employers classify gig workers as “employees” then there are costs associated with that decision, including taxes and benefits. But if employers classify gig workers incorrectly as “independent contractors” then employers could be faced with costly litigation under the Federal Labor Standards Act and the North Carolina Wage and Hour Act. Classifying gig workers correctly will depend on numerous factors, including:

  • the degree of control exerted by the employer;
  • the permanency of the relationship;
  • use of facilities or equipment;
  • the alleged contractor’s opportunities for profit and loss;
  • the amount of skill, initiative, judgment and foresight in open market competition with others required for the success of the claimed contractor; and
  • the extent to which the service rendered by the alleged contractor is an integral part of the employer’s business.

During 2020 the number of employees working remotely skyrocketed. That trend has largely continued throughout 2021. As employers continue to face the challenges of a largely remote workforce, they should pay special attention to employee engagement, and how employers can continue to promote their culture, policies and procedures with a largely remote workforce. As employers begin to shift their workforce back to the office, employers should be cognizant of the challenges some employees will face returning to the office. Employers should be prepared for an increase in requests for accommodations, and how the return to the office will also impact employee engagement and satisfaction.

Union membership in the USA peaked between 1945 and 1955 when 33% of the labor force was organized. Today, the percentage of wage and salary employees who are members of a union is only 10.8%. Out of this pool, slightly more than half of all union members work in the public sector. The percentage of union members employed in the public sector has slightly increased during recent years while the percentage of union members employed in the private sector has slightly decreased.

North Carolina’s workforce reflects relatively low rates of union membership. North Carolina is one of eight states where union members represent less than 4.9% of the available workforce.

North Carolina does not permit traditional collective bargaining in its public sector. While state or local employees are free to join private associations, North Carolina law does not allow these associations to negotiate their members’ wages, hours and working conditions.

North Carolina is one of 27 states that has enacted a “Right to Work” (RTW) Law. Under North Carolina’s RTW Law, employees cannot be forced to join a union or pay dues as a condition of employment.

RTW laws do not apply to employers who are covered by the Railway Labor Act (RLA). In general, the RLA only applies to airline or railroad employers. Because of a series of decisions by the Supreme Court of the United States, under the RLA, employers and unions can only require employees to pay their pro rata share of the union’s actual collective bargaining costs incurred in collective bargaining. Employees covered by the RLA cannot be compelled to pay for activities of the union that are unrelated to collective bargaining, such as expenditures for political activities.

The reconstituted National Labor Relations Board (NLRB) under the Trump administration reversed policy decisions by the prior Obama NLRB that endorsed union organizing and broad protection of workers’ rights. The Obama NLRB decisions addressed, among other topics: the definition of “joint employer status”, which made it easier for unions to organize in situations involving staffing agencies or franchises; “micro units”, which made it easier for employees to organize bargaining units; and a policy to invalidate employer rules if they could be interpreted to violate workers’ rights.

On the issues of joint employer status and micro units, the Trump NLRB returned the rules to their pre-Obama status, while it set new standards for analyzing employee handbooks and policies. The Trump NLRB made it easier for an employer to withstand union organizing. These NLRB decisions were consistent with the Trump administration’s general policy of reducing restrictions on business. While under the past administration, unions filed fewer complaints against employers out of concern that the Trump NLRB would issue pro-business decisions, that will have a negative impact on employees with similar challenges in the future. However, the Biden administration likely will see a reversal in these practices. 

The first year of Joe Biden’s presidency has been marked by his administration’s efforts to further workers’ rights and unionization efforts – and is expected to include the replacement of several Trump-era rulings. His nominees to the NLRB have been very pro-union and the NLRB has increased their budget to hire over 100 new attorneys, specifically expecting a need to address the rising debate over the classification of gig workers. The NLRB will be launching a USD2.1 million program to promote knowledge of workers’ rights and strategy to unionize. The overall efficacy of Biden’s NLRB is still too early to call, but it is clear that he is pushing for pro-worker policies.

COVID-19 prompted uncertainty regarding the rights and obligations of employers whose employees are represented by a union. Although the impact of COVID-19 at the NLRB policy-making level remains unclear at this time, the NLRB recognized the fluidity of the pandemic and resulting regulations and issued advice memoranda granting employers flexibility. With that said, employers should narrowly tailor their actions to what is deemed appropriate in the circumstances and try to discuss such actions with the union prior to implementation.

After the 9/11 terrorist attack on the World Trade Center in New York City on September 11, 2001, the federal structure, laws and rules for complying with the US federal immigration system started a rapid evolution by creating new agencies, consolidating others and establishing concurrent and exclusive jurisdiction for regulation of:

  • employment-based and family-based non-immigrant and immigrant visa classifications;
  • issuance of a visa at US consulates; and
  • admission of visa holders or applicants under visa waivers presenting an application for admission at the US border.

US immigration law is established by US federal statutes and administered though US federal regulations. These statutes are pre-emptive and displace all state laws on the subject matter. States are allowed to supplement but not contradict federal law in this field. Often states enact immigration laws which focus on employment verification, personal identification, entitlement to public benefits all of which entitlements are traditionally regulated at state level. Occasionally, the federal and state laws clash and the state law invariably is pre-empted from legislating in areas where federal law is clearly supreme as a matter of statutory and constitutional law.

From Petition to Admission

Immigrant versus non-immigrant intent and admission documents

All non-US citizens applying for admission at the US border are presumed to have permanent resident intent to stay in the USA upon admission. If the applicant has not been granted permanent residency status in the USA, such person is obligated to prove by written evidence that the purpose of entry is temporary and he or she will depart the USA on or before the departure date assigned at time of admission. The purpose and period of admission is assigned at time of admission and may be further documented by the issuance and placement of a visa in the passport of the applicant.

Admission based on non-immigrant intent may be pursuant to a visa waiver or a non-immigrant visa. In either case, the admission for a term of stay is conditioned proof of the intent to remain in the USA only for the period of authorized temporary stay. This term is electronically controlled and monitored after the applicant crosses the US border. Upon admission, the applicant is granted a term of stay before the end of which the applicant must depart the USA in order to comply with the terms of admission. Failure to depart on time becomes a violation of the terms of admission and will have repercussions for the applicant whether in the short or long term upon future applications filed with the US immigration agencies.

The non-immigrant visa classification of admission sets the scope of authorized activities during the period of presence in the USA. Activities performed outside the scope of the visa classification is a violation which can have serious repercussions for the actor and any employer participating in the violation.

Non-immigrant visa classifications, visa issuance and visa appointments

All visas and documentation of a visa waiver are issued from outside the USA through the US consulate of the country where the applicant is authorized to make application. Further, in respect of the issuance of a visa, only a US consulate may issue a visa; authorization depends upon a personal interview and FBI and Interpol clearances of a background check on the applicant.

Visa appointments are difficult to get because of consulate staffing and Presidential proclamations affecting the applicants of over 30 countries with high instance of COVID-19 infection rates. Consequently, an applicant with an approval from a US immigration agency who resides in a country listed in a Presidential proclamation is likely to require a National Interest Exception (NIE) in order to obtain a visa interview. In addition, because of lengthy delays in obtaining a visa appointment after receiving an approval from a US immigration agency, many applicants seeking a visa interview try to qualify for “emergent” or “exceptional circumstances” for an expedited appointment. The criteria for qualification for an emergent interview can vary depending on the country of origin COVID-19 conditions, local consular staffing and US COVID-19 conditions.

Approval authority for issuance of the visitor visa (B) and the trader/investor visa (E) rests solely at the discretion of a US Consulate and depends on the reciprocal conditions documented by agreement or treaty between the USA and host country. 

Practical advice on seeking an advisor re-immigration benefit under US law

North Carolina employers sponsoring visa applicants should consider:

  • picking an immigration advisor with a verifiable reputation of success and integrity who is licensed or accredited with years of practical experience in the US immigration system;
  • studying the type of benefit sought and options available for your particular case in selecting a US advisor;
  • performing due diligence on the US immigration history of the beneficiary to avoid being implicated in a false presentation to a US government official, since illegal acts or omissions in an application for an immigration benefit is a US federal crime.

Non-immigrant visa classifications for business


  • classification – visa waiver;
  • maximum term – 90 days;
  • term of stay per visit – 90 days;
  • issuer – US Customs and Border Protection (CBP);
  • comment – online application, granted at US border.


  • classification – visitor/tourist;
  • maximum term – ten years;
  • term of stay per visit – six months;
  • issuer – US Consulate;
  • comment – requires interview.


  • classification – treaty trader;
  • maximum term – five years;
  • term of stay per visit – two years;
  • issuer – US Consulate;
  • comment – renewable for as long as criteria met.


  • classification – treater investor;
  • maximum term – five years;
  • term of stay per visit – two years;
  • issuer – US Consulate;
  • comment – renewable for as long as criteria met.


  • classification – student;
  • maximum term – duration of status;
  • term of stay per visit – duration of status;
  • issuer – US Consulate;
  • comment – renewable for as long as criteria met.


  • classification – temporary worker;
  • maximum term – six years;
  • term of stay per visit – two years;
  • issuer – United States Citizenship and Immigration Services (USCIS);
  • comment – specialty occupation, controlled in part by lottery.


  • classification – intern/student;
  • maximum term – 12–18 months;
  • term of stay per visit – based on subcategory;
  • issuer – J-1 agency;
  • comment – depends on subcategory and US sponsor.


  • classification – multinational manager/executive;
  • maximum term – seven years;
  • term of stay per visit – two years;
  • issuer – USCIS;
  • comment – multinational transfer between related entities.


  • classification – multinational;
  • maximum term – five years;
  • term of stay per visit – two years;
  • issuer – USCIS;
  • comment – multinational transfer between related entities (special knowledge).


  • classification – extraordinary ability;
  • maximum term – three years;
  • term of stay per visit – varies, one to three years;
  • issuer – USCIS;
  • comment – evidence-intensive.

Employers often set the predicate for union organizational campaigns when their managers fail to maintain positive and professional relationships with their workforce. This includes situations where managers lack awareness of issues that are important to their employees besides wages, hours and working conditions. The following story provides an example of how an employer can unknowingly prompt a union organizational campaign even when its managers act with good intentions.

A large and successful company, with a long history of very positive relationships with its employees, operated a major facility in a rural area. A highly successful, progressive, and well-intentioned plant manager was transferred from a more urban facility to the rural facility. In reviewing the holidays recognized in the past, the manager decided to reward employees with a new vacation day, but in doing so, the manager cancelled the opening day of deer season as a recognized holiday.

Shortly thereafter, the employer received notice from the National Labor Relations Board (NLRB) that a majority of its employees had indicated their support for a union and that an election would be scheduled for the employees to vote on whether they now wished to be represented by a union. Fortunately, from the company’s perspective, the opening day of deer season was quickly restored as a holiday and the company barely won the subsequent election with a bare majority of the employees voting against union representation.

The moral of this story is simple. In order to minimize the possibility of employees seeking union representation, employers must ensure that their employees believe that they are treated with respect and dignity and that the company understands what is important to them. This can be accomplished only when an employer vigilantly maintains open lines of communication between its managers and the rank and file employees.

The types of questions that may be asked of prospective employees is governed by federal discrimination laws (Title VII, Americans with Disabilities Act, Age Discrimination Act, etc), along with a few North Carolina statutes. 

First, any inquiry about an individual’s membership in a protected class is prohibited by both federal and North Carolina anti-discrimination laws. Protected classes under federal law include race, color, national origin, religion, sex (including pregnancy, childbirth and other related medical conditions), sexual orientation and gender identity, disability, age (40 years of age or older), citizenship status, and genetic information. Under state law, it is also is unlawful to refuse to hire an applicant because of their use of legal tobacco products away from the workplace.

North Carolina law permits an employer to require job applicants to take a pre-employment drug test, but requires certain notices be provided to an applicant regarding their rights and that drug tests be performed by laboratories certified by the State of North Carolina. 

Finally, any employer who intends to make inquiries into a job applicant’s credit history must abide by the federal Fair Credit Reporting Act, which contains requirements concerning obtaining written consent and providing a variety of written disclosures to applicants. These disclosures include forms which must be provided to an applicant before and after taking adverse action, such as not hiring an applicant based on information contained in a credit report.

Restrictive covenants such as non-compete and non-solicitation agreements are generally disfavored in North Carolina. Courts will, however, enforce reasonable restrictions that are tailored to a legitimate business interest.

To be enforceable, North Carolina restrictive covenants must be:

  • in writing;
  • part of an employment contract or in connection with the sale of a business;
  • supported by valuable consideration;
  • reasonable as to time and territory; and
  • reasonable as to scope of activities covered by the restriction.

Valuable consideration is a key component of an enforceable non-compete under North Carolina law. Continued employment is insufficient consideration. Instead, there must be some new consideration – a promotion, a raise, a bonus, or some combination thereof – for a restrictive covenant to be valid under North Carolina law for a current employee.

While North Carolina does not have a hardline rule on the reasonableness of time restrictions, generally North Carolina courts approve of two-year restrictions. The duration and geographic scope of a restrictive covenant are considered together to determine if it is reasonable. Courts may approve longer restrictions if the geographic territory is relatively small; likewise, courts may approve broader geographic territories if the duration of the restriction is relatively short. Regardless, courts rarely approve restrictions of five years or more. Courts will look to six factors in determining whether a non-compete or non-solicitation agreement is reasonable as to time and territory:

  • the geographic area of the restriction;
  • the area where the employee was assigned to work;
  • the area in which the employee actually worked;
  • the area in which the company does business;
  • the nature of the business; and
  • the nature of the employee’s duty and the employee’s knowledge of the business operation.

Additionally, the scope of the activities covered by the non-compete must be tied to the work performed for the employer. Courts have refused to enforce non-competes that prevent an employee from doing any work for a competitor, regardless of whether it is the same nature of the work performed for the employer. Additionally, non-competes that preclude “direct or indirect” competition have been unenforceable due to the scope preventing, for example, ownership of a mutual fund holding shares of a competitor.

Confidential Information

Non-disclosure or confidentiality agreements are not subject to the same restrictions in North Carolina as other restrictive covenants. Unlike non-compete and non-solicitation agreements, confidentiality agreements can be unlimited as to time and territory. Employers should be cautious when attempting to use confidentiality agreements in manners similar to non-compete agreements. North Carolina courts have deemed some agreements that were styled as “confidentiality agreements” to be non-competes in disguise and scrutinized them under the restrictive covenant doctrines described in the preceding section.

Trade Secrets

An employers’ trade secrets qualify as a category of confidential information. North Carolina has adopted the Uniform Trade Secrets Act. (See N.C. Gen. Stat. § 66-152 et seq.) Business or technical information, including but not limited to a formula, pattern, program, device, compilation of information, method, technique, or process are protectable as trade secrets as long as that information is commercially valuable due to “not being generally known or readily ascertainable through independent development or reverse engineering by persons who can obtain economic value from its disclosure or use” and the owner of the information makes “efforts that are reasonable under the circumstances to maintain its secrecy”.

To prevail on a claim for misappropriation of trade secrets, the owner of the trade secret must prove the person accused of misappropriation (i) knew or should have known of the trade secret, and (ii) had a specific opportunity to acquire it for disclosure or use or has acquired, disclosed, or used it without the express or implied consent or authority of the owner.

Employee Privacy

There are no state statutes specifically governing employee privacy. North Carolina is a “one party consent” state, meaning that if one party consents to a communication being recorded, or if there is not a reasonable expectation of privacy in the communication, the communication may be lawfully recorded.

North Carolina law codifies protections for employees against workplace discrimination. The North Carolina Equal Employment Practices Act (NCEEPA) prohibits employers from discrimination against current or prospective employees based on race, religion, color, national origin, sex or handicap (disability). (See N.C.G.S.A. §143 – 422.1, et seq.) The NCEEPA applies to employers with 15 or more employees and provides the same protections to employees as federal law under Title VII of the Civil Rights Act of 1964.

The NCEEPA does not create a private right of action. Nonetheless, an employee can bring a common law claim for wrongful discharge based on violation of the public policy expressed in the Act. Importantly, North Carolina’s courts limit the expansion of common law to unlawful discharge claims and the public policy expressed in the NCEEPA. Thus, while Title VII has been interpreted to include discrimination based on sexual orientation (see the Supreme Court’s landmark decision in Bostock v Clayton County) or pregnancy, to date no state court has similarly interpreted the NCEEPA.

North Carolina law also codifies specific protections for individuals with disabilities. The North Carolina Persons with Disabilities Protections Act (NCPDPA) prohibits discrimination based on a “disabling condition”. However, employers may invite an applicant to identify himself or herself as a person with a disability “in order to affirmatively act on his behalf”. Employers must provide reasonable accommodations to employees and applicants with disabilities once they are apprised of the need for an accommodation. (See N.C.G.S.A. § 168A-4.)

The NCPDPA also makes it unlawful for an employer to retaliate against an employee or any individual assisting the employee in asserting his or rights under the NCPDPA or opposing a discriminatory practice under the statute. (See N.C.G.S.A. § 168A-10.) The NCPDPA provides a private right of action to employees or applicants experiencing disability discrimination. (See N.C.G.S.A. § 168A-11.)

Personnel Records

There is no North Carolina law strictly governing a private employer’s practices regarding personnel records. But employers should be aware of the state and federal laws concerning record retention for documents commonly found in personnel files.

A record retention policy of three years complies with most federal and North Carolina laws, with a few exceptions. Records pertaining to background checks should be retained for five years from the date of the check. (See 15 U.S.C. §1681p.) Employee tax records should be retained for four years from the date the tax is paid. (See 26 CFR 31.6001-1(e)(2); 26 U.S.C.§ 3101-3128.) Workers’ compensation records, medical exams required by law, and hazardous material responses should be kept through the duration of employment plus 30 years. (See 29 CFR § 1910.1020.) Occupational Safety and Health Act (OSHA) forms should be retained for five years following the end of the calendar year that these records cover. (See 29 CFR §1904.44.) Employee benefit plans subject to ERISA should be retained for six years from when the record was required to be disclosed. (See 28 U.S.C. §1027.) Federal procurement contract and related weekly payroll documents should be retained for four years after completion of the contract. (See 48 CFR §4.705-2.)

In North Carolina, almost all safety and health regulations and standards are administered by the Commissioner of Labor, who is elected in a state-wide election. The actual inspection and enforcement of the state OSHA is the responsibility of the Commissioner’s OSHA division.

Employers are required to comply with OSHA standards as well as a catch-all provision known as the General Duty Clause (GDC). Standards include requirements for machine guarding, railings on elevated platforms, electrical requirements, hazard communication rules for hazardous chemicals, rules for the safe excavation for trenches, “lockout and tagout” rules applied to machine maintenance, rules related to working in confined spaces, maintaining a log of all work-related injuries and illnesses, and many other rules and requirements.

The GDC applies to hazards not covered by a standard. Employers are required to maintain conditions of employment that are free from “recognized hazards” that are likely or could cause serious injury of death. Whether a hazard is ”recognized” can turn on whether the employer’s industry has recognized that the particular hazard exists. A classic example of where the GDC might apply includes issues such as hot workplaces and the need to take reasonable steps to protect employees from heat-related illnesses.

Citations for violations are characterized as non-serious, serious, repeat, or willful. The maximum penalty for non-serious and serious violations is USD7,000. The maximum penalty for repeat or willful violations is USD70,000. In cases involving workplace-related deaths or serious injuries, or in cases of egregious and willful violations, NC OSHA can also recommend criminal penalties in the form of a fine of USD10,000 and up to six months in prison.

Employers are obligated to report to NC OSHA any work-related death within eight hours. Hospitalizations must be reported in 24 hours. Employers can be assured that any serious workplace incident will be reported to NC OSHA by some third party, such as a hospital or local fire departments or police. However, it is always better for the employer to report any OHSA-required hospitalizations or deaths prior to the third party, if possible.

Employee Handbook

Employee handbooks or manuals serve as a way for employers to establish: guidelines for conduct; workplace expectations and safety; and parameters for company culture, philosophy, values and mission.

To ensure that the provisions of an employee handbook are not construed to alter North Carolina’s presumption of at-will employment or give rise a breach of contract claim by an employee against their employer, a handbook or manual for North Carolina employees should contain a conspicuous and explicit disclaimer of contractual rights and a clear statement that the handbook or manual is not intended to alter the at-will default rule. The handbook should also state that the employer retains the right to amend the handbook in the future. However, these disclaims may not protect an employer if a handbook contains specific promises pertaining to health care, pensions, or other similar benefits.


North Carolina supplements the federal Consolidated Omnibus Reconciliation Act of 1985 (COBRA) law with its own continuation laws in Article 53 of Chapter 58 of the North Carolina General Statutes. North Carolina’s continuation laws apply to all employers in North Carolina regardless of size, and mirrors COBRA’s 18-month coverage period but does not provide any options for extensions. 

Eligibility requires the departing employee to have been insured continuously under the group policy for at least the three consecutive months preceding termination and does not extend to anyone who is or becomes eligible for another employer or governmental plan within 31 days of termination of employment. Employers are only required to continue hospital, surgical and major medical benefits, not plans for dental, vision and prescription drug care. 

Employers are required provide notice of these options to departing employees, but the employee is responsible for completing and submitting all required documentation provided by the employer.


North Carolina supplements the federal Family Medical Leave Act (FMLA) with two additional types of family-related leave not covered by the FMLA. First, N.C. Gen. Stat § 95-270 prohibits adverse employment actions against employees who take reasonable time off from work to seek legal protection for themselves or a minor child who has been subject to domestic violence or other illegal harassment.

N.C. Gen. Stat § 95-28.3 requires employers to allow employees with a school-aged child to take four hours of leave annually to be involved with their child’s school. The law permits employers to require 48 hours' notice and written verification from the school and does not require employers to pay employees for any time taken pursuant to the law.

Addressing Issues of Possible Termination, including Non-compete Agreements and Vacation Pay/Leave

Employers should both determine and communicate the parameters of the employment relationship at its inception to better maintain control of the termination process. Key considerations in terminating the employment relationship include the nature of the employment relationship, the rationale for ending the employment relationship, whether the employee is bound by any restrictive covenants, whether the employee has possession or control of company property or information (including confidential information), and the potential for a resulting employment dispute or litigation.

Rationale and procedure for ending the employment relationship

While the employer may not be required to tell the employee the reason that they are ending the relationship, the employer must ensure that the rationale does not violate federal or state law. For example, the employer may not terminate someone due to their membership in a protected class or in retaliation for the exercise of certain rights. In addition, North Carolina allows employees to maintain a claim for wrongful termination in violation of public policy which can provide more expansive remedies than those available under federal law.

Possession or control of company property or information

Once the decision to end the employment relationship has been made, but prior to informing the employee of the decision, the employer needs to determine whether the employee is subject to a restrictive covenant, what company property or information the employee may have in their possession, how to get the property or information from the employee, and how to prevent the employee from disseminating company information to third parties. This could entail changing passwords or access to email or electronic documents shortly prior to the termination meeting, requiring all electronic devices to be brought to the meeting and turned over, or even asking for a forensic examination of certain electronic devices if there is already concern about improper sharing of information.

Potential for employment dispute or litigation

The employer also needs to determine the likelihood of an employment dispute and document the termination accordingly. If the employer is already on notice of the likelihood of a dispute, counsel should be consulted to review the evidence supporting a termination and to ensure that no relevant documents or communications are deleted.

Preventing Age Discrimination

Employers should be cognizant of certain protections for individuals over the age of 40 under federal and North Carolina law. The federal Age Discrimination in Employment Act (ADEA) and the Older Workers Benefit Protection Act (OWBPA) prohibit discrimination based on age. (See 29 U.S.C. § 621, et seq.)

When an employer grants a release or is involved in a settlement with an employee over the age of 40, the ADEA and OWBPA require the employer to give the employee 21 days to consider and accept the terms of any agreement. The ADEA and OWBPA also require employers to allow the employee seven days to rescind the agreement after signing. When an employer undertakes a reduction in force or group layoff, the ADEA and OWBPA require the employer to provide affected employees with certain statistical information regarding the other individuals affected by the termination.

Arbitration, Class Action, Mass Terminations

Employers should generally establish whether the termination of an employment relationship, or other employment disputes, will be handled through alternative dispute resolution at the outset of the employment relationship. This could include mandatory mediation prior to filing suit or, most commonly, provisions requiring the arbitration of employment claims. There is clear deference to arbitration in both North Carolina and federal courts. Notably, in North Carolina a mutual agreement by both the employer and the employee to submit claims to arbitration is sufficient consideration to enforce an arbitration agreement.

North Carolina has enacted the Uniform Arbitration Act. (See N.C. Gen. Stat §1-159 et seq.) These provisions give wide latitude to the parties to agree on an arbitrator and determine the best method of arbitration. Notably, an arbitrator may hear dispositive motions, and can only award punitive damages or other exemplary relief if the arbitration agreement itself provides for an award of such damages.

Employers may also want to consider the possibility of eliminating the threat of class action litigation through a well-drafted class action waiver. The Supreme Court recently upheld the enforceability of class action waivers in relation to an employee arbitration agreement, signaling the continued viability of this option for employers moving forward; see Epic Sys. v Lewis, 138 S. Ct. 1612 (2018).

With regard to plant closings or mass layoffs, employers should comply with the Federal Worker Adjustment and Retraining Notification (WARN) Act. Employers must provide 60 days’ written notice when there is either (i) a plant closing, or (ii) a mass layoff at a single site of employment impacting at least 50 employees and 33% of the workforce in a 30-day period. (See 29 U.S.C. § 2101, et seq.) Notably the WARN Act only applies to employers with 100 or more employees.

Employers and employees are free to enter enforceable contracts setting a term of employment and restrictions on the employer’s right to terminate the relationship. Most employees in North Carolina do not have these types of contracts and are instead employed “at will”. This means that the employer or the employee can end their employment relationship at any time, for any reason, and without notice.

Despite the at-will element of North Carolina law, employers should always have a good, legitimate and non-discriminatory reason before they terminate the employment of any employee. Egregious violations, such as overt sexual or racial harassment, assault or battery, threats of violence, the use of illegal drugs at the workplace, and other similar serious acts of misconduct, can justify the immediate discharge of the offending employee. Terminations because of job performance should never be implemented unless the employee in question has received written notice of his job deficiencies and a reasonable opportunity to correct them.

Wrongful Discharge

In North Carolina, state courts have recognized a common law claim for wrongful termination in violation of public policy. The North Carolina Supreme Court first recognized this claim in a case involving a truck driver who alleged that he had been fired for refusing to violate regulations limiting the amount of time a driver can work during a specific time frame.

Employers should be mindful that a three-year statute of limitations applies to claims for wrongful discharge. Because a wrongful discharge claim may be brought within three years of an employee’s discharge, plaintiffs can sue an employer for discriminatory discharge under state law even where they failed to file a timely charge of discrimination with the Equal Employment Opportunity Commission (EEOC) or other applicable federal agency.

In North Carolina, the EEOC is responsible for enforcing federal anti-discrimination laws. Employers are prohibited from discriminating against an employee or potential hire because of race, color, religion, sex (including pregnancy, transgender status, and sexual orientation), national origin, age (40 or older), disability or genetic information. Most employers with at least 15 employees (20 employees in age discrimination cases) are covered by EEOC laws (the most common federal laws enforced per the EEOC website include Title VII, the ADA, GINA, and the ADEA). The EEOC investigates charges of discrimination and aims to facilitate early resolution and settlement. Should the charge fail to settle through mediation, the EEOC will either issue a right-to-sue letter or take legal action on behalf of the complainant.

Additionally, the North Carolina Department of Labor’s Retaliatory Employment Discrimination Bureau is responsible for enforcing the 1992 Retaliatory Employment Discrimination Act (REDA). REDA was enacted to protect from retaliation employees who, in good faith, engage in one of the “protected activities” under the law. REDA protects an array of activities and areas, including workplace safety issues, wage and hour issues, mine safety and health, and areas applicable to genetic testing.

Collective Bargaining Agreements

Collective bargaining agreements (CBAs) are made between an employer and a union that has been recognized by the employer or certified by the NLRB as the exclusive bargaining agent for the employer’s employees within a specified bargaining unit. The employer has a duty to negotiate in good faith over wages, hours and working conditions. As explained above, in North Carolina a CBA cannot require an employee to either pay dues or become a union member for those employees who are covered by the NLRA.

Almost all North Carolina private employers are subject to coverage under the federal Fair Labor Standards Act (FLSA), which governs matters including: the payment of minimum wages, overtime pay requirements and the exemptions from those requirements, record-keeping requirements, and child labor standards. The FLSA is enforced by the United States Department of Labor Wage and Hour division.

North Carolina employers also are subject to the provisions of the North Carolina Wage and Hour Act (NCWHA) which governs, among other things:

  • the time and manner of the payment of compensation to employees, including terminated employees;
  • the written notices regarding wage payment policies that employers must provide;
  • the deductions an employer may make from wages, and the contents of the written agreements required by employees to permit such deductions.

The NCWA is enforced by the North Carolina Commissioner of Labor, Wage and Hour Division. The NCWHA provides for the recovery of unpaid wages, liquidated damages, and attorneys’ fees and costs to a plaintiff prevailing in a civil action.

The North Carolina Retaliatory Employment Discrimination Act, N.C. Gen. Stat. § 95-240 et seq, prohibits employers from discriminating or retaliating against an individual who has filed or threatened to file a claim under the Workers’ Compensation Act, the Occupational Safety and Health Act, the Wage and Hour Act, and certain other North Carolina statutes. 

The federal False Claims Act similarly provides protection against retaliation for employees who bring qui tam actions in federal court for alleged fraudulent or false claims for payment from the federal government.

A number of federal laws also provide whistle-blower protection for employees who report suspected violations of law, including OSHA, the Sarbanes-Oxley Act of 2002, the Clean Air Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the Securities and Exchange Commission’s whistle-blower program.

Employers should carefully investigate all claims of discrimination including allegations of sexual or other illegal harassment, including claims of racial harassment. If an employee is complaining about a manager or an individual in a position of power, that individual should be walled off from any internal investigation. Employers may consider hiring outside counsel to conduct interviews for particularly egregious or potentially widespread claims of hostile work environment or harassment.

If litigation ensues, there is mandatory mediation in North Carolina state and federal courts for employment disputes. Mediators in North Carolina need to complete the trainings required by the North Carolina Judicial Branch and apply for certification. Each federal district court in North Carolina also keeps a list of approved certified mediators for parties to choose from that are approved for that jurisdiction. If the parties do not agree on a mediator, one will be appointed by the court from the approved list.

Employees in North Carolina may pursue claims for discrimination, violation of the North Carolina Wage and Hour Act, and other employment-related claims on behalf of a class of similarly situated employees if such claim meets the requirements for maintaining a class action in Rule 23 of the North Carolina or Federal Rules of Civil Procedure. They may also join in class actions brought by other employees. The Supreme Court of the United States has held that waivers of class arbitration of employment disputes do not violate federal labor law. Accordingly, an employer can obtain a waiver of an employee’s right to bring or join in a class action lawsuit in a properly constructed arbitration agreement with the employee obtained either at the inception of the employment relationship or in exchange for consideration during the employee’s employment.

Choice of Law and Forum Selection Clauses

North Carolina generally will enforce a choice of law provision contained in a written agreement entered between an employer and employee (eg, written employment contract, non-compete/non-disclosure agreement, severance agreement, etc) “as long as they had a reasonable basis for their choice and the law of the chosen State does not violate a fundamental public policy of the state or otherwise applicable law"; Sawyer v Mkt. Am., Inc., 190 N.C. App. 791, 794 (2008). A forum selection clause that requires that all litigation be conducted in a state that has no connection to the terms of the employee’s employment likely will not be enforced.

Prevailing plaintiffs in discrimination cases are entitled to several elements of damages, including back pay (compensation for lost wages from the time of an employee’s unlawful termination or constructive discharge until the time of judgment), front pay (a prospective award of lost wages running from the time of judgment until a date in the future), and emotional distress damages. Punitive damages are also available in cases where the employer’s conduct is found to be outrageous due to an evil motive or reckless indifference to the rights of others. Prevailing discrimination plaintiffs are also entitled to awards of attorneys’ fees and, where applicable, costs.

Nelson Mullins Riley & Scarborough LLP

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Nelson Mullins Riley & Scarborough LLP is based in Raleigh, North Carolina, and has more than a century of labor and employment experience representing clients in federal and state courts and ADR venues both in North Carolina and throughout the USA. The employment team’s experience includes litigating federal and state anti-discrimination laws, wage and hour complaints, non-compete disputes, occupational safety concerns, and immigration and labor law issues. It also has a long and experienced track record litigating, trying and winning employment cases. Members of the team include this chapter's four co-authors, as well as John Branch, Nate Pencook, Hannah Kays, Andrew Brown, Cassie Holt and Shaniqua Singleton. The team is supported by the firm’s national employment team, which includes contributors Buzz Burwell and Jessica Jeffrey, and is chaired by Bret Cohen.

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