in the Court of Appeals 17 October 2019.
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.
Offices of Michael C. Byrne, by Michael C. Byrne, for
Attorney General Joshua H. Stein, by Special Deputy Attorney
General Matthew Tulchin, for Respondent-Appellant North
Carolina Office of State Human Resources.
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.
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.
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
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.
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.
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
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.
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).
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
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 ...