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Prickett v. North Carolina Office of State Human Resources

Court of Appeals of North Carolina

November 19, 2019

DAVID PRICKETT, Petitioner,
v.
NORTH CAROLINA OFFICE OF STATE HUMAN RESOURCES, Respondent.

          Heard in the Court of Appeals 17 October 2019.

          Appeal by respondent from final decision dated 11 September 2018 Wake County, No. 17 OSP 562 by Judge Melissa Owens Lassiter in the Office of Administrative Hearings.

          Law Offices of Michael C. Byrne, by Michael C. Byrne, for Petitioner-Appellee.

          Attorney General Joshua H. Stein, by Special Deputy Attorney General Matthew Tulchin, for Respondent-Appellant North Carolina Office of State Human Resources.

          ARROWOOD, JUDGE

         Respondent North Carolina Office of State Human Resources ("OSHR") appeals from a final decision of the Office of Administrative Hearings ("OAH") granting a motion for summary judgment by David Prickett ("petitioner") and denying OSHR's motions for summary judgment. For the following reasons, we reverse.

         I. Background

         On 25 September 2014, petitioner was hired as a "Communications Director" for OSHR, and was to report directly to the Chief Deputy State Human Resources Director. His position was characterized as a "confidential assistant," and was therefore deemed statutorily exempt from the State Human Resources Act pursuant to N.C. Gen. Stat. § 126-5(c)(2) (2017). As an exempt employee, petitioner could be fired at-will for any nondiscriminatory reason. Petitioner worked in this exempt position from 13 October 2014 through 22 December 2016, at which point then-Governor Pat McCrory changed petitioner's exempt status to non-exempt.

         On 19 December 2016, following the election of Governor Roy Cooper, the General Assembly passed Session Law 2016-126, which made several amendments to Chapter 126 of the North Carolina General Statutes (the "State Human Resources Act" or "SHRA"). Specifically, an amendment to N.C. Gen. Stat. § 126-5(d)(1) reduced the number of state government positions the Governor could deem "exempt" from the State Human Resources Act from 1500 to 425. 2016 N.C. Sess. Law ch. 126, §§ 7, 8. It also removed OSHR from the list of cabinet department positions the Governor could deem exempt. In addition, a new provision, codified at N.C. Gen. Stat. § 126-5(d)(2c), provided that employees designated exempt pursuant to N.C. Gen. Stat. § 126-5(d)(1) who the Governor changes to "non-exempt" would gain immediate career State employee status (hereinafter the "Career Status Law"). Id.

         As a career State employee, an employee enjoys the protection of the SHRA and can only be fired for cause. Prior to the enactment of the Career Status Law, an employee was required to work in a non-exempt position for at least twelve consecutive months before they could attain career status. See N.C. Gen. Stat. § 126-1.1(a) (2017). During that 12-month period, the non-exempt employee was considered to be probationary and not yet subject to the provisions of the SHRA. Id. The Career Status Law effectively eliminated this probationary period for certain previously exempt employees whose designation was changed to non-exempt.

         Following the passage of these amendments, then-Governor McCrory changed petitioner's position from exempt to non-exempt effective 22 December 2016. On 30 December 2016, Governor-elect Cooper filed a lawsuit, Cooper, III v. Berger, No. 16 CVS 15636, 2017 WL 1433245 ( N.C. Super. Mar. 17, 2017) (hereinafter "Cooper I"), challenging the recent amendments to the SHRA. This lawsuit included a challenge to the Career Status Law. Cooper I, 2017 WL 1433245, at *2. On 3 January 2017, the Chief Justice of the North Carolina Supreme Court appointed a three-judge panel of the Superior Court to hear Cooper I. Id. at *1. While that case was pending, petitioner received a letter on 19 January 2017 informing him that Governor Cooper reversed his position back to exempt status, and that he was terminated as of the end of day. On 27 January 2017, petitioner filed a Petition for Contested Case Hearing in the OAH, challenging his termination on grounds he could only be fired for cause.

         On 17 March 2017, the three-judge panel appointed to hear Cooper I granted summary judgment to Governor Cooper. The panel found that N.C. Gen. Stat. § 126-5(d)(2c), the Career Status Law, was unconstitutional and enjoined its enforcement. Cooper I, 2017 WL 1433245, at *13. The defendants subsequently appealed that decision to this Court. Prior to this Court considering the appeal, the Career Status Law was repealed on 25 April 2017 by Session Law 2017-6. 2017 N.C. Sess. Law 6, § 1. On 26 April 2017, the Cooper I defendants filed a motion asking this Court to dismiss as moot their appeal of the Career Status Law, and to vacate the lower court's decision. On 11 May 2017, this Court granted the motion to dismiss the appeal, but denied the motion to vacate the lower court's decision. On 11 September 2018, the administrative law judge ("ALJ") issued a final decision granting summary judgment to petitioner and denying OSHR's motions for summary judgment. OSHR appealed the ALJ's decision on 11 October 2018.

         II. Discussion

         On appeal, OSHR contends the ALJ erred in granting petitioner's motion for summary judgment and denying its motions for three reasons. First, former Governor McCrory had no authority in the first instance to change petitioner's status from exempt to non-exempt. Second, the ALJ's decision runs contrary to the Superior Court ruling in Cooper I, which found the Career Status Law to be unconstitutional. Finally, any notice violation was procedural in nature, not substantive, and thus the appropriate remedy is not reinstatement of petitioner.

         This Court "appl[ies] the same review standard established by Rule 56 of the North Carolina Rules of Civil Procedure when reviewing an agency's summary judgment ruling, and our scope of review is de novo." Heard-Leak v. N.C. State Univ. Ctr. for Urban Affairs, 250 N.C.App. 41, 45, 798 S.E.2d 394, 397 (2016).

         As an initial matter, we address this Court's jurisdiction to hear the present case. The ALJ instructed the parties to file an appeal directly with this Court pursuant to N.C. Gen. Stat. § 126-34.02 (2017). However, this case was originally filed under N.C. Gen. Stat. § 126-5(h), which provides: "[i]n case of dispute as to whether an employee is subject to the provisions of this Chapter, the dispute shall be resolved as provided in Article 3 of Chapter 150B." N.C. Gen. Stat. § 126-5(h) (2017). Article 3 of Chapter 150B provides a right to a contested case hearing in an administrative proceeding, in which the ALJ shall make a final decision or order. N.C. Gen. Stat. §§ 150B-22, 150B-34 (2017). Article 4 of that Chapter in turn provides "[a]ny party or person aggrieved by the final decision in a contested case . . . is entitled to judicial review of the decision under this Article[.]" N.C. Gen. Stat. § 150B-43 (2017). Thus, Chapter 150B, which governs contested case hearings before an ALJ, also provides a right of appeal of the ALJ's final decisions. However, it is unclear whether an appeal may be made directly to this Court.

         Even if N.C. Gen. Stat. § 126-5(h) does not provide a direct right of appeal to this Court, "[t]his Court does have the authority pursuant to North Carolina Rule of Appellate Procedure 21(a)(1) to 'treat the purported appeal as a petition for writ of certiorari' and grant it in our discretion." Luther v. Seawell, 191 N.C.App. 139, 142, 662 S.E.2d 1, 3 (2008) (quoting State v. SanMiguel, 74 N.C.App. 276, 277-78, 328 S.E.2d 326, 328 (1985)). Acknowledging the law is unclear in this area, the parties have both requested that this appeal be treated as a petition for writ of certiorari. In the ...


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