Employment Law Daily North Carolina executive order takes aim at gender identity discrimination
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Monday, October 23, 2017

North Carolina executive order takes aim at gender identity discrimination

By Pamela Wolf, J.D.

On October 18, North Carolina’s Democratic Governor Roy Cooper issued an executive order that he says is aimed at making North Carolina a welcoming place to all, by promoting diversity and prohibiting discrimination in government agencies and government contracts on the grounds of race, color, ethnicity, sex, National Guard or veteran status, sexual orientation, and gender identity or expression in employment. The move is one more chapter in the controversy over a law targeting transgender individuals that Cooper refused to defend as North Carolina Attorney General under the previously Republican administration.

Executive Order 24 also directs the Department of Administration to develop guidance to require certain companies that have contracts with the state to implement similar nondiscrimination policies. North Carolina executive agencies contract with more than 3,000 vendors who employ thousands of people—the executive order could impact up to $1.5 billion worth of contracts.

It all began with H.B. 2. The executive order memorializes promises made by Cooper and other North Carolina executive branch defendants in a consent decree that would at least partly resolve litigation challenging H.B. 142, a compromise bill signed by Cooper earlier this year to roll back the most controversial aspects of H.B. 2, same-day legislation that barred and negated any state or local law extending antidiscrimination protections in employment and public accommodations to transgender individuals.

H.B. 2 was a torpedo aimed at a Charlotte ordinance that extended antidiscrimination protections to LGBTQ individuals and permitted use of public restrooms consistent with an individual’s gender identity. H.B. 2 turned out to be, in many ways, the bane of North Carolina because it prompted substantial economic pressure from companies that refused to do business in the state because they saw the measure as permitting discrimination against the LGBTQ community.

‘Repeal’ law. The so-called “repeal” law, H.B. 142, which also cleared both the House and Senate on the same day in March 2017, has been said to repeal H.B. 2 under a compromise. As Attorney General, Cooper had called H.B. 2 unconstitutional and a “national embarrassment.” He went on to defeat former Republican Governor Pat McCrory, who had championed H.B. 2, in the gubernatorial race.

While Section 2 of H.B. 142 does repeal H.B. 2, it also amends another section of the North Carolina General Statutes to provide that regulation of access to multiple occupancy restrooms, showers, or changing facilities must be in accordance with an act of the General Assembly—another words, left to the state. Significantly, the bill also prohibits local governments from enacting or amending an ordinance regulating private employment practices or regulating public accommodations. However, this provision expires on December 1, 2020.

Consent decree. “Earlier this year, I said there was more work to do to protect against discrimination and make North Carolina a welcoming state,” Cooper said in a release. “Today’s executive order and consent decree are important steps toward fighting discrimination and enacting protections throughout state government and across our state.”

In litigation filed under the previous administration, the plaintiffs challenged H.B. 2 and later amended the complaint to challenge H.B. 142. The executive branch defendants came to the conclusion that continued litigation over enforcement of Section 2 of H.B. 142 “will result in the unnecessary expenditure of State resources, and is contrary to the best interests of the State of North Carolina,” according to the consent decree.

The consent decree controls the interpretation and application of H.B. 142 to state agencies, boards, commissions, and departments under the jurisdiction of the governor. It provides that in public facilities subject to control or supervision by those executive branch entities, “transgender people are not prevented from the use of public facilities in accordance with their gender identity.” Nor may Section 2 of H.B. 142 be enforced to bar, prohibit, block, deter, or impede any transgender person from using those public facilities in accordance with that person’s gender identity.

Moreover, the consent decree enjoins the executive branch defendants from prosecuting anyone who uses public facilities under the control or supervision of the executive branch when the use conforms to the person’s gender identity and is otherwise lawful.

“By requiring companies that contract with the state to have nondiscrimination policies, the state can promote protections for more North Carolinians outside of state government,” Cooper said. “We’ve worked with the business community, advocates for the LGBT community, and other North Carolinians who know our state is stronger because of our diversity, and I will keep working to make our state a welcoming and inclusive place.”

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