{
  "id": 11651807,
  "name": "EMPLOYMENT SECURITY COMMISSION OF NORTH CAROLINA, Appellant/Respondent v. WILLIAM PEACE, Appellee/Petitioner; EMPLOYMENT SECURITY COMMISSION OF NORTH CAROLINA, Appellee/Respondent v. WILLIAM H. PEACE, III, Appellant/Petitioner",
  "name_abbreviation": "Employment Security Commission v. Peace",
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    "judges": [
      "Judge LEWIS concurs.",
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    "parties": [
      "EMPLOYMENT SECURITY COMMISSION OF NORTH CAROLINA, Appellant/Respondent v. WILLIAM PEACE, Appellee/Petitioner EMPLOYMENT SECURITY COMMISSION OF NORTH CAROLINA, Appellee/Respondent v. WILLIAM H. PEACE, III, Appellant/Petitioner"
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      {
        "text": "SMITH, Judge.\nOn 15 October 1985, William H. Peace, III (\u201cPeace\u201d), began his employment with respondent Employment Security Commission (\u201cESC\u201d) as its Equal Employment Opportunity (\u201cEEO\u201d) officer. On 10 April 1991, an incident between Peace and a coworker ultimately led to Peace\u2019s dismissal for alleged unacceptable personal conduct. The State Personnel Commission (\u201cSPC\u201d) adopted, inter alia, the following facts as recommended by the Administrative Law Judge (\u201cALJ\u201d): During his 1985 orientation, Peace was informed that by paying $2.00 per month to the Personnel Office petty fund, he would be entitled to obtain an occasional cup of coffee from a pot located in the personnel file room. He paid the dues; however, his usual practice was to go to the agency\u2019s cafeteria for morning coffee. Prior to 10 April 1991, no one informed Peace that his payment into the petty fund did not entitle him to obtain coffee from the personnel file room. Over the years, on an irregular basis, he obtained coffee from the petty fund coffee pot. At a staff meeting which Peace did not attend, a coffee fund of $3.40 per month was established for any interested participants. Peace was not made aware of a separate coffee fund, nor was he asked to join.\nOn 10 April 1991, Peace got a cup of coffee from the personnel file room. As Peace was leaving the office with the coffee, an exchange took place with Ms. Catherine High, a supervisor in the personnel office, in which she told him that he should pay her for the coffee. Peace refused. Ms. High called Peace \u201cdespicable\u201d and told him she hoped he was fired. She told Peace that if he got another cup of coffee and did not pay her, she would get a cup of coffee and scald him with it. Ms. High informed her supervisor and Mr. Gene Baker, who became Peace\u2019s immediate supervisor as of 22 April 1991, of the incident.\nOn the afternoon of 10 April 1991, Peace contacted the magistrate\u2019s office regarding the incident with Ms. High. Peace was informed that, if he believed Ms. High was capable of carrying out her threat, he should take out a warrant against her. Peace spoke with Ms. High following his conversation with the magistrate\u2019s office, at which time he gave her an opportunity to apologize. Ms. High did not apologize. Thereafter, Peace had the magistrate\u2019s office issue summons against Ms. High charging her with communicating a threat. The charge was dismissed by the trial court as frivolous and Peace was ordered to pay court costs.\nPeace was not contacted by his superiors regarding the incident until he received a predismissal conference memorandum on 5 June 1991, from Gene Baker, his immediate supervisor. Following a 6 June dismissal conference, Peace was discharged for unacceptable personal conduct. In a 7 June letter, Ann Q. Duncan, Chairperson of ESC, explained that Peace was being dismissed for unacceptable conduct, including taking the coffee without paying Catherine High and filing criminal charges against High, which were found to be frivolous. Such conduct, said Duncan, caused Peace\u2019s reputation as the EEO officer at ESC to be called into question and his respect among fellow employees diminished.\nPeace filed two appeals of the ESC decision to discharge him. The bases of his appeals were that ESC lacked \u201cjust cause\u201d to dismiss him pursuant to N.C. Gen. Stat. \u00a7 126-35 (1991), and that he had been discharged in retaliation for having filed discrimination charges against ESC in 1989, for violation of Title VII, Section 704(a) of the Civil Rights Act of 1964, 42 U.S.C. \u00a7 2000e-3 (1988). Peace did not appeal upon a state claim of retaliatory discharge pursuant to N.C. Gen. Stat. \u00a7 126-36 (1987). Pursuant to N.C. Gen. Stat. \u00a7 7A-759 (1987), Peace\u2019s charge of retaliatory discharge was investigated by the Civil Rights Division of the Office of Administrative Hearings.\nThrough its investigation, the Office of Administrative Hearings (\u201cOAH\u201d) found reasonable cause to believe that a violation of Title VII had occurred. OAH presented Peace with three options. He could: (1) receive a right to sue letter; (2) commence a contested case hearing in OAH; or (3) do nothing. Peace chose to commence a contested case hearing with regard to the retaliatory discharge claim. He also filed a petition for contested case hearing pursuant to N.C. Gen. Stat. \u00a7 126-35 on his lack of \u201cjust cause\u201d claim. Pursuant to an order of the Chief Administrative Law Judge of OAH, both cases were consolidated for hearing. A hearing was conducted by ALJ Sammie Chess on 12-14 July 1993.\nPursuant to N.C. Gen. Stat. \u00a7 7A-759(e), an ALJ decision on the merits of a retaliatory discharge claim is a final agency decision binding on the parties absent a petition for judicial review. See N.C. Gen. Stat. \u00a7 150B-45 (1987). However, with regard to the N.C. Gen. Stat. \u00a7 126-35 lack of \u201cjust cause\u201d claim, an ALJ issues a recommended decision to SPC, which then issues a final agency decision also subject to judicial review. N.C. Gen. Stat. \u00a7 126-37 (1991). AU Chess issued two separate decisions following the hearing. In his recommended decision to SPC, AU Chess found that ESC had the burden of proving it had \u201cjust cause\u201d to discharge petitioner. AU Chess concluded that ESC had failed to meet that burden and recommended Peace be reinstated. In his final decision regarding the retaliatory discharge claim pursuant to Title VII, AU Chess also placed the burden of proof on ESC and concluded that Peace\u2019s discharge violated Section 704(a) of Title VII of the Civil Rights Act of 1964, in that his dismissal was retaliatory. Pursuant to that holding, ALJ Chess ordered petitioner reinstated.\nThe ALJ\u2019s recommended decision reinstating Peace for lack of \u201cjust cause\u201d was adopted, with slight modification, by SPC. ESC appealed SPC\u2019s final decision and the ALJ\u2019s final decision separately, pursuant to N.C. Gen. Stat. \u00a7 150B-50 (1987). In a 13 August 1994 order, Judge Narley L. Cashwell upheld the final agency decision of the ALJ with regard to the retaliatory discharge claim in which Peace was ordered reinstated. In a 13 March 1995 order, Judge Wiley F. Bowen reversed the final decision of SPC and dismissed Peace\u2019s petition challenging his dismissal on the \u201cjust cause\u201d claim. ESC appeals Judge Cashwell\u2019s order affirming the retaliatory discharge claim. Peace appeals Judge Bowen\u2019s order reversing the SPC decision to reinstate him.\nThe proper standard of review for the superior court \u201c \u2018depends upon the particular issues presented on appeal.\u2019 \u201d Act-Up Triangle v. Commission for Health Services of the State of North Carolina, 345 N.C. 699, 706, 483 S.E.2d 388, 392 (1997) (citation omitted). If petitioner asks: \u201c \u2018(1) whether the agency\u2019s decision was supported by the evidence or (2) whether the decision was arbitrary or capricious, then the reviewing court must apply the \u201cwhole record\u201d test.\u2019 \u201d Id. (quoting In re Appeal by McCrary, 112 N.C. App. 161, 165, 435 S.E.2d 359, 363 (1993). Under the whole record test, a reviewing court is required to examine all competent evidence in order to determine whether the agency decision is supported by substantial evidence. Id. The definition of substantial evidence includes \u201c \u2018such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.\u2019 \u201d Id. at 707, 483 S.E.2d at 393 (citation omitted). Furthermore, in making arbitrary or capricious determinations concerning the agency decision, the reviewing court \u201c \u2018does not have authority to override decisions within agency discretion when that discretion is exercised in good faith and in accordance with law.\u2019 \u201d Id. at 707, 483 S.E.2d at 393 (citation omitted).\nAppellate review of a superior court order concerning an agency decision requires an examination of the trial court\u2019s order for any errors of law. Id. at 706, 483 S.E.2d at 392. The two tasks involved include: \u201c \u2018(1) determining whether the trial court exercised the appropriate scope of review and, if appropriate, (2) deciding whether the court did so properly.\u2019 \u201d Id. (citation omitted). The whole record test allows a reviewing court to determine whether an administrative decision has a rational basis in the evidence. Id. at 706-07, 483 S.E.2d at 392.\nAs the reviewing court in the \u201cjust cause\u201d case, we must take into account the specialized expertise of the staff of an administrative agency; in this case, the SPC. See High Rock Lake Assoc. v. Environmental Management Comm., 51 N.C. App. 275, 279, 276 S.E.2d 472, 475 (1981). While there is evidence in the record contrary to the Commission\u2019s findings, neither this Court nor the superior court may substitute its judgment for that of the agency. After reviewing the record, we find substantial evidence to support the State Personnel Commission\u2019s findings of fact.\nAt the outset, we note that the actions of both Peace and High were inappropriate and childlike. As a result of both parties\u2019 improper behavior and subsequent refusals to resolve their differences amicably as adults, this matter has involved years of litigation and, as yet, remains unresolved. If there was ever a case that could have been resolved by the parties and participants in an employment controversy and was not, then this must be that case.\nI. Title VII Retaliatory Discharge Claim\nA. The Jurisdiction of OAH in Title VII Cases\nAs a preliminary matter, we address ESC\u2019s argument that the trial court erred in failing to find OAH did not have jurisdiction to hear Peace\u2019s Title VII retaliatory discharge claim, and also in failing to find OAH acted ultra vires by adjudicating such claim. ESC contends that only courts, and not administrative agencies, have jurisdiction to hear Title VII cases, and if OAH is authorized to hear Title VII claims, then it is functioning as a court in violation of N.C. Const. art. IV, \u00a7 1.\nN.C. Const. art. IV, \u00a7 1 provides:\nThe judicial power of the State shall, except as provided in Section 3 of this Article, be vested in a Court for the Trial of Impeachments and in a General Court of Justice. The General Assembly shall have no power to deprive the judicial department of any power or jurisdiction that rightfully pertains to it as a co-ordinate department of the government, nor shall it establish or authorize any courts other than as permitted by this Article.\nN.C. Const. art. IV, \u00a7 3 permits the General Assembly to vest in administrative agencies established pursuant to N.C. Const. art. Ill, \u00a7 11 as part of the executive branch, such judicial powers as are reasonably necessary to accomplish the purposes for which the agencies were created, and also directs that appeals from such agencies shall be to the General Court of Justice.\nTitle VII authorizes the Equal Employment Opportunity Commission (\u201cEEOC\u201d) to enter into worksharing agreements with state and local agencies charged with the administration of state fair employment practices laws in order to fulfill its duty of preventing unlawful employment practices. 42 U.S.C. 2000e-8(b) (1988). When an alleged unlawful employment practice occurs in a state that has a law prohibiting the alleged practice and has established a state or local authority to grant or seek relief from such practice, Title VII provides that \u201c \u2018no charge may be filed [with the EEOC]... by the person aggrieved before the expiration of sixty days after proceedings have been commenced under the State or local law, unless such proceedings have been earlier terminated.\u2019 \u201d Davis v. North Carolina Dept. of Correction, 48 F.3d 134, 137 (4th Cir. 1995) (quoting 42 U.S.C. 2000e-5(c) (1988)). Thus, where state law protects against the kind of discrimination alleged, Title VII requires that plaintiffs resort to state and local remedies before seeking relief under federal law. Id. N.C. Gen. Stat \u00a7 7A-759 designates OAH as the State\u2019s deferral agency for cases deferred by the EEOC as provided in 42 U.S.C. 2000e-5.\nN.C. Gen. Stat. \u00a7 7A-759(e) provides that orders entered by an ALJ after a contested case hearing on the merits of a deferred charge is a final agency decision binding on the parties, and that an ALJ may order whatever remedial action is necessary to give full relief consistent with the requirements of federal statutes and regulations. However, an ALJ\u2019s decision with respect to a deferred charge is not a judicial decision, but rather a final agency decision. This becomes apparent upon an evaluation of the rationale for the creation of OAH. According to the Administrative Procedure Act as originally adopted, 1973 N.C. Sess. Laws ch. 1331, \u00a7 150-30(a), the presiding officers for administrative hearings were designated by either an agency itself or by statute. In an effort to obtain nonbiased hearing officers with specialized knowledge of the issues presented, the General Assembly created OAH, an independent, quasi-judicial agency in order to \u201cprovide a source of independent hearing officers to preside in administrative cases and thereby prevent the commingling of legislative, executive, and judicial functions in the administrative process.\u201d N.C. Gen. Stat. \u00a7 7A-750 (1985). Thus, because OAH was established as part of the executive branch pursuant to N.C. Const. art. III, \u00a7 11, it is not a court, and does not function as such when making final agency decisions on charges deferred from EEOC. See also Utilities Commission v. Finishing Plant, 264 N.C. 416, 422, 142 S.E.2d 8, 12 (1965) (\u201cAdministrative agencies . . . are distinguished from courts. They are not constituent parts of the General Court of Justice.\u201d)\nTo support its argument that only courts, and not administrative agencies, have the authority to hear Title VII claims, ESC cites footnote four in Yellow Freight System, Inc. v. Donnelly, 494 U.S. 820, 108 L. Ed. 2d 834 (1990). This footnote points out that Congress opted for judicial, rather than administrative enforcement of Title VII claims. Id. at 825, 108 L. Ed. 2d 840 n.4. However, this footnote precisely states Congress \u201cpreferred that the ultimate determination of discrimination rest with the Federal judiciary,\u201d and not EEOC. Id. The Court does not attempt to say that state administrative agencies have no authority to hear Title VII claims. In fact, the Court, when discussing the 60-day delay found in 42 U.S.C. 2000e-5(c), says that such delay \u201cis designed to give state administrative agencies an opportunity to invoke state rules of law.\u201d Yellow Freight System, Inc., 494 U.S. at 825, 108 L. Ed. 2d at 841. In light of this language and the plain language of Title VII, we conclude the trial court did not err in failing to find that OAH did not have jurisdiction to hear Peace\u2019s Title VII claim, or that OAH acted ultra vires by adjudicating such claim.\nA. Burden of Proof in Title VII Cases\nAccording to the North Carolina Supreme Court, the claimant carries the initial burden of proof in Title VII cases. See North Carolina Department of Correction v. Gibson, 308 N.C. 131, 137, 301 S.E.2d 78, 87 (1983). In addition, a prima facie showing of retaliatory discharge requires a plaintiff to show: (1) he engaged in some protected activity, such as filing an EEO complaint; (2) the employer took adverse employment action against plaintiff; and (3) that the protected conduct was a substantial or motivating factor in the adverse action (a causal connection existed between the protected activity and the adverse action). See Kennedy v. Guilford Technical Community College, 115 N.C. App. 581, 584, 448 S.E.2d 280, 282 (1994) (adopting the federal rules on prima facie showing in a state retaliatory discharge claim) (plaintiff claimed she was retaliated against for filing race and sex discrimination charges with the EEOC). Petitioner must prove \u201cbut for\u201d causation instead of \u201cmotivating factor\u201d in his prima facie case of retaliatory acts in violation of Title VII. Id.\nAfter plaintiff presents a prima facie case of retaliation, \u201c \u2018the burden shifts to the defendant to show it would have taken the same action even in the absence of protected conduct\u2019 \u201d. Id. (quoting McCauley v. Greensboro City Bd. of Educ., 714 F.Supp. 146, 153 (M.D.N.C. 1987)). Defendant must articulate a legitimate nondiscriminatory reason for its action. Id. at 584-85, 448 S.E.2d at 282. A legitimate reason overcomes the presumption of discrimination from plaintiffs prima facie showing if it has \u201c \u2018a rational connection with the business goal of securing a competent and trustworthy work force.\u2019 \u201d Id. at 585, 448 S.E.2d at 282 (quoting Harris v. Marsh, 679 F.Supp. 1204, 1285 (E.D.N.C. 1987), aff\u2019d in part, rev\u2019d in part on other grounds by Blue v. U.S. Dept. of Army, 914 F.2d 525 (4th Cir. 1990)).\nIf defendant shows a legitimate reason that overcomes the presumption, plaintiff then has to show that the reason was only a pretext for the retaliatory action. Id. Therefore, \u201c \u2018a plaintiff retains the ultimate burden of proving that the [adverse employment action] would not have occurred had there been no protected activity\u2019 engaged in by the plaintiff.\u201d Id. (quoting Melchi v. Burns Int\u2019l Sec. Servs. Inc., 597 F.Supp. 575, 583 (E.D. Mich. 1984)).\nIn the instant case, plaintiff Peace claims the true reason he was discharged is because he filed discrimination claims against the EEOC in 1989, a protected activity, instead of the proffered reasons surrounding the coffee incident in 1991. However, the ALJ erred by placing the initial burden of proof on the defendant employer to show an absence of retaliatory purpose prior to Peace\u2019s prima facie showing of retaliatory discharge. Since the trial court affirmed the ALJ who had improperly placed the burden of proof on ESC, this retaliatory discharge claim must be reversed and remanded to the lower court for further remand to OAH for proceedings not inconsistent with this opinion.\nII. \u201cJust Cause\u201d Claim\nWith respect to his \u201cjust cause\u201d claim, Peace contends the trial court erred in determining that SPC\u2019s decision and order improperly placed the burden of proof on ESC. He argues that because ESC is in a better position to \u201cferret out the reasoning behind his termination\u201d than he is, ESC should have the burden of proof.\nN.C. Gen. Stat. \u00a7 126-35 states, in pertinent part, \u201c[n]o career State employee subject to the State Personnel Act shall be discharged, suspended, or demoted for disciplinary reasons, except for just cause.\u201d It is undisputed in the instant case that Peace had a property interest of continued employment created by N.C. Gen. Stat. \u00a7 126-35 and protected by the Due Process Clause of the United States Constitution. See Leiphart v. N.C. School of the Arts, 80 N.C. App. 339, 348, 342 S.E.2d 914, 921, cert. denied, 318 N.C. 507, 349 S.E.2d 862 (1986). In Mathews v. Eldridge, 424 U.S. 319, 335, 47 L. Ed. 2d 18, 33 (1976), the United States Supreme Court set forth three factors to be considered in determining what process is due when an individual is faced with the deprivation of a property interest:\n[F]irst, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government\u2019s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.\nWe acknowledge that the private interest affected, the first factor to be considered under the Mathews test, is of the utmost importance. Courts \u201chave frequently recognized the severity of depriving a person of the means of livelihood.\u201d Cleveland Board of Education v. Loudermill, 470 U.S. 532, 543, 84 L. Ed. 2d 494, 504 (1985). We also acknowledge the State\u2019s substantial interest in maintaining employee discipline and efficiency.\n[T]he Government\u2019s interest, and hence the public\u2019s interest, is the maintenance of employee efficiency and discipline. Such factors are essential if the Government is to perform its responsibilities effectively and economically. To this end, the Government, as an employer, must have wide discretion and control over the management of its personnel and internal affairs.\nArnett v. Kennedy, 416 U.S. 134, 168, 40 L. Ed. 2d 15, 41 (1974). The central issue in the present case concerns the second Mathews factor: whether placing the burden of proof on an employee to show he was terminated without \u201cjust cause\u201d creates a substantial risk of erroneous termination.\nWe first note the absence of a statute or other authority allocating the burden of proof in \u201cjust cause\u201d claims. Though we attempt to place such burden in a manner that will obviate the risk of erroneous termination, we believe the burden of proof would have been more properly allocated by our General Assembly, or even possibly by SPC pursuant to the rule-making authority found in N.C. Gen. Stat. \u00a7\u00a7 126-4 (6), (7a), (9), and (11) (1995) and 126-26 (1995).\nAccording to 1 Kenneth S. Broun, Brandis & Broun on North Carolina Evidence \u00a7 30 (4th ed. 1993), the burden of proof encompasses both the burden of producing evidence and the burden of persuasion. The burden of producing evidence is the burden of a party to satisfy the trier of fact that sufficient evidence has been presented to justify a finding in that party\u2019s favor. Id. The burden of persuasion is the burden of convincing the trier of fact. Id. This burden generally falls on the party who will lose if the trier of fact is in doubt after all the evidence is in. Id.\nWhen statutes fail to dictate with whom the burden of persuasion lies, the burden is judicially allocated based on \u201cconsiderations of policy, fairness and common sense . . . .\u201d Id. at \u00a7 37. For cases in which the burden of proof remains unallocated, it has been suggested that the burden be placed \u201cupon the party who has peculiar knowledge of the facts and who, therefore, is better able to produce proof.\u201d Id. In the instant case, the party having particular knowledge as to the cause of Peace\u2019s dismissal is ESC. An employee allegedly dismissed for \u201cjust cause\u201d would be faced with an almost insurmountable task in attempting to prove he or she was dismissed for something short of \u201cjust cause,\u201d in that the employee would be forced to prove a negative. We believe the better view is to allocate the initial burden of proof to the employer to prove that an employee was dismissed for \u201cjust cause\u201d and then have the employee come forward with evidence showing that his or her dismissal was made without \u201cjust cause.\u201d Here, SPC expressly adopted the ALJ\u2019s Conclusion of Law Number 2, which states \u201c[w]here just cause is an issue, the Respondent [ESC] bears the ultimate burden of persuasion.\u201d Taking into account \u201cthe specialized expertise of the staff of an administrative agency,\u201d we give great deference to SPC\u2019s decision to place the burden of proof on ESC. High Rock Lake Assoc., 51 N.C. App. at 279, 276 S.E.2d at 475. However, in light of our Supreme Court\u2019s recent decision in Soles v. City of Raleigh Civil Service Comm., 345 N.C. 443, 480 S.E.2d 685, we are compelled to find that placing the burden of proof in \u201cjust cause\u201d claims on the employee does not pose a substantial threat of erroneous termination and therefore does not violate due process.\nIn Soles, petitioner was hired by the City of Raleigh on 5 April 1984 as an Engineering Aide I and was promoted to Engineering Aide II on 13 August 1986. Id. at 444, 480 S.E.2d at 686. Petitioner was terminated from his employment on 2 December 1990 for \u201c \u2018personal conduct detrimental to City service.\u2019 \u201d Id. at 445, 480 S.E.2d at 686. Following an unsuccessful appeal to the City Manager, petiioner petitioned for an administrative hearing before the Raleigh Civil Service Commission alleging he had been \u201c \u2018dismissed without justifiable cause.\u2019 \u201d Id. The Commission concluded petitioner had failed to establish by the greater weight of the evidence that he had been terminated without justifiable cause. Id. Petitioner then sought judicial review alleging that the Commission\u2019s finding that he had \u201c \u2018failed to establish by the greater weight of the evidence that he was terminated without justifiable cause\u2019 \u201d violated his constitutional rights. Id. at 445-46, 480 S.E.2d at 686-87. The trial court reversed the Commission\u2019s decision on the grounds that allocating the burden of proof to petitioner violated his right to due process, and this Court unanimously affirmed. Id. at 446, 480 S.E.2d at 687.\nOn appeal, our Supreme Court held that petitioner possessed no constitutionally protected property interest in his continued employment with the City, and that placing the burden of proof on him to prove he was dismissed without just cause did not violate due process. Id. at 447-48, 480 S.E.2d at 688. The Court stated \u201cwhile the placement of the burden of proof is rarely without consequence and frequently dispositive of the outcome of the litigation, \u2018[o]utside the criminal law area, where special concerns attend, the locus of the burden of persuasion is normally not an issue of federal constitutional moment.\u2019 \u201d Id. at 449, 480 S.E.2d at 689 (quoting Lavine v. Milne, 424 U.S. 577, 585, 47 L. Ed. 2d 249, 256 (1976)). The Court also observed that a constitutional right to a certain allocation of the burden of proof exists only when a fundamental right is at issue. Soles, 345 N.C. at 449, 480 S.E.2d at 689. The Court then stated, \u201c[wjhere, as here, no fundamental right is at issue, the allocation of the burden of proof in civil cases is irrelevant to constitutional questions of procedural due process.\u201d Id. In conclusion, the Court cited Arnett v. Kennedy, 416 U.S. 134, 40 L. Ed. 2d 15, which held that due process did not require a pre-termination evidentiary hearing for a federal employee who could be terminated only for cause, for the proposition that \u201cif it is permissible to dismiss an employee without any eviden-tiary hearing whatsoever, it is similarly permissible to discharge an employee after an evidentiary hearing in which the burden of proof is placed on the employee.\u201d Soles, 345 N.C. at 450, 480 S.E.2d at 689.\nWhile Soles involved a city employee with no constitutionally protected interest in continued employment, we are nevertheless guided by the Soles decision in determining where the burden of proof should fall in a \u201cjust cause\u201d claim pursuant to N.C. Gen. Stat. \u00a7 126-35 involving a state employee with a constitutionally protected property interest in continued employment. While this issue was not directly before the Court in Soles, the Court made the statement that \u201c[a]ssuming a situation existed in which an employee was entitled to procedural due process protection, we agree with the City and hold that the allocation of the burden of proof to a disciplined employee does not violate the employee\u2019s guarantees of procedural due process.\u201d Soles, 345 N.C. at 448, 480 S.E.2d at 688. Thus, based on Soles, we hold that the burden of proof in \u201cjust cause\u201d claims pursuant to N.C. Gen. Stat. \u00a7 126-35 may be allocated to an employee without violating due process. The trial court therefore did not err by determining that SPC\u2019s decision and order improperly placed the burden of proof on ESC.\nIII. Peace\u2019s Motion for Rule II Sanctions\nPro se plaintiff Peace asserts in his brief that Rule 11 sanctions should be imposed against the ESC attorneys. Peace claims that ESC frivolously submitted yet another appeal after losing on this retaliatory discharge claim below, and additionally for appealing two other cases between these two parties. Furthermore, Peace claims the attorneys filed an appeal for the mere purpose of delay and to increase Peace\u2019s legal fees. In light of our rulings, this claim for sanctions is dismissed.\nIV. Conclusion\nIn both appeals, the ALJ improperly placed the burden of proof on the employer. In Gibson, the North Carolina Supreme Court held that the burden of proof is on the employee in Title VII cases, including retaliatory discharge claims. North Carolina Dept. of Correction v. Gibson, 308 N.C. at 137, 301 S.E.2d at 87. Thus, the retaliatory discharge claim is reversed and remanded to the trial court for further remand to the ALJ for proceedings not inconsistent with this opinion. Furthermore, in light of the Supreme Court\u2019s decision in Soles v. City of Raleigh Civil Service Commission, 345 N.C. 443, 480 S.E.2d 685, Peace\u2019s \u201cjust cause\u201d claim is remanded to the superior court for further remand for the application of the proper burden of proof. Finally, Peace\u2019s motion for sanctions is denied.\nReversed and remanded in No. 93 CVS 10599.\nRemanded in No. 94 CVS 11517.\nJudge LEWIS concurs.\nJudge GREENE dissents in part.",
        "type": "majority",
        "author": "SMITH, Judge."
      },
      {
        "text": "Judge Greene\ndissenting in part.\nI disagree with the majority\u2019s affirmance of the trial court\u2019s determination that the State Personnel Commission improperly placed the burden of proof on the Employment Security Commission of North Carolina, and would reverse the trial court on this issue.\nFirst, I agree with the majority\u2019s well-reasoned explanation of why the burden of proof in a termination without just cause case is more fairly placed upon the employer. I add only that this Court has repeatedly acquiesced in the placement of the burden of proof on the employer in just cause cases. See Davis v. N. C. Dept. of Human Resources, 110 N.C. App. 730, 432 S.E.2d 132 (1993) (not addressing placement of the burden of proof on the employer); Walker v. N. C. Dept. of Human Resources, 100 N.C. App. 498, 504, 397 S.E.2d 350, 355 (1990) (affirming the trial court\u2019s conclusion that the employer \u201chad not met its burden of showing just cause to uphold the terminations\u201d) (emphasis added), disc. review denied, 328 N.C. 98, 402 S.E.2d 430 (1991); Employment Security Comm. v. Wells, 50 N.C. App. 389, 391, 274 S.E.2d 256, 258 (1981) (\u201cnot reaching] the question of whether [the employer] failed to carry the necessary burden of proof to show just cause for petitioner\u2019s dismissal from its employ\u201d because case remanded on other grounds).\nI disagree with the majority\u2019s conclusion that Soles v. City of Raleigh Civil Service Comm., 345 N.C. 443, 480 S.E.2d 685 (1997), mandates placement of the burden of proof on the employee in just cause cases. Soles merely stands for the proposition that, where a pre-existing rule mandates placement of the burden of proof on the employee, such placement does not violate the employee\u2019s due process rights. Soles, 345 N.C. at 448, 480 S.E.2d at 688. There is no pre-existing rule mandating placement of that burden on the employee in this case. Soles does not, either explicitly or implicitly, require courts to place the burden of proof on the employee in just cause cases.\nAbsent specific guidance from our Supreme Court or our General Assembly, I do not believe we should depart from our customary practice of placing the burden of proof on the employer in just cause cases.",
        "type": "dissent",
        "author": "Judge Greene"
      }
    ],
    "attorneys": [
      "Attorney General Michael F. Easley, by Chief Deputy Attorney General Andrew A. Vanore, Jr., and Assistant Attorney General Valerie Bateman, for North Carolina Department of Justice; and Chief Counsel T.S. Whitaker and Attorney Fred R. Gamin, for North Carolina Employment Security Commission, respondent appellant (No. COA94-1283), respondent appellee (No. COA95-678).",
      "Hilliard & Jones, by Thomas Hilliard, III, for petitioner appellant (No. COA95-678).",
      "William H. Peace, III, petitioner appellee (No. COA94-1283), pro se."
    ],
    "corrections": "",
    "head_matter": "EMPLOYMENT SECURITY COMMISSION OF NORTH CAROLINA, Appellant/Respondent v. WILLIAM PEACE, Appellee/Petitioner EMPLOYMENT SECURITY COMMISSION OF NORTH CAROLINA, Appellee/Respondent v. WILLIAM H. PEACE, III, Appellant/Petitioner\nNo. COA95-678\nNo. COA94-1283\n(Filed 2 December 1997)\n1. Administrative Law and Procedure \u00a7 9 (NCI4th); Labor and Employment \u00a7 120 (NCI4th)\u2014 Title VII retaliatory discharge claim \u2014 jurisdiction of OAH\nThe Office of Administrative Hearings (OAH) had jurisdiction to hear an ESC employee\u2019s claim for retaliatory discharge in violation of Title VII of the Civil Rights Act of 1964 and did not act ultra vires in adjudicating such claim. The OAH does not function as a court in violation of N.C. Const, art. IV, \u00a7 1 when making final agency decisions on Title VII charges deferred from the Equal Employment Opportunity Commission. N.C.G.S. \u00a7 7A-769.\n2. Labor and Employment \u00a7 121 (NCI4th)\u2014 Title VII claim\u2014 burden of proof\nPlaintiff carries the initial burden of proof in Title VII retaliatory discharge cases. In order to make a prima facie showing of a Title VII retaliatory discharge, plaintiff must show that (1) he engaged in protected activity, (2) the employer took adverse employment action against plaintiff, and (3) a but for causal connection existed between the protected activity and the adverse action. If plaintiff presents a prima facie case of retaliation, defendant employer must articulate a legitimate nondiscriminatory reason for its action. If defendant employer shows a legitimate reason that overcomes the presumption of discrimination from plaintiffs prima facie showing, plaintiff then has to show that the reason was only a pretext for the retaliatory action.\n3. Labor and Employment \u00a7 121 (NCI4th)\u2014 Title VII action\u2014 burden of proof\nThe Office of Administrative Hearings erred in placing the initial burden on defendant employer to show an absence of retaliatory purpose in a Title VII retaliatory discharge case prior to plaintiff employee\u2019s prima facie showing of a retaliatory discharge.\n4. Public Officers and Employees \u00a7 66 (NCI4th)\u2014 state employee \u2014 continued employment \u2014 property interest\u2014 due process\nA state employee had a property interest in continued employment created by N.C.G.S. \u00a7 126-35 and protected by the Due Process Clause of the United States Constitution.\n5. Public Officers and Employees \u00a7 66 (NCI4th)\u2014 state employee \u2014 dismissal for just cause \u2014 burden of proof\nThe employer had the initial burden to produce evidence that a state employee was dismissed for \u201cjust cause,\u201d and the employee must then come forward with evidence that his or her dismissal was without \u201cjust cause.\u201d\n6. Public Officers and Employees \u00a7 66 (NCI4th)\u2014 state employee \u2014 dismissal for just cause \u2014 burden on employee\u2014 due process\nPlacing the burden of proof on the state employee in determining whether the employee was dismissed for \u201cjust cause\u201d within the purview of N.C.G.S. \u00a7 126-35 does not pose a substantial threat of erroneous termination and thus does not violate due process.\nJudge Greene dissenting in part.\nAppeal by Employment Security Commission from order entered 12 August 1994 in case 93 CVS 10599 by Judge Narley L. Cashwell in Wake County Superior Court, affirming a final order of the Office of Administrative Hearings reinstating Peace as an Equal Employment Opportunity Commission Officer based on retaliatory discharge. Appeal by Peace from an order entered 13 March 1995 in case 94 CVS 11517 by Judge Wiley F. Bowen in Wake County Superior Court, which order concluded that \u201cjust cause\u201d existed for terminating Peace and reversed the State Personnel Commission\u2019s decision that Peace be reinstated. Both Peace appeals were thereafter consolidated and were originally heard in the Court of Appeals on 7 May 1996. See Employment Security Comm. v. Peace, 122 N.C. App. 313, 740 S.E.2d 63 (1996), disc, review allowed and remanded, 345 N.C. 640, 483 S.E.2d 706 (1997). Heard on grant of discretionary review in the Supreme Court on 11 June 1996. The cases sub judice were then remanded to this Court for reconsideration in light of the Supreme Court\u2019s ruling in Soles v. The City of Raleigh Civil Service Comm., 345 N.C. 443, 480 S.E.2d 685, reh\u2019g denied, 345 N.C. 761, 485 S.E.2d 299 (1997). Heard on remand in the Court of Appeals on 1 April 1997.\nAttorney General Michael F. Easley, by Chief Deputy Attorney General Andrew A. Vanore, Jr., and Assistant Attorney General Valerie Bateman, for North Carolina Department of Justice; and Chief Counsel T.S. Whitaker and Attorney Fred R. Gamin, for North Carolina Employment Security Commission, respondent appellant (No. COA94-1283), respondent appellee (No. COA95-678).\nHilliard & Jones, by Thomas Hilliard, III, for petitioner appellant (No. COA95-678).\nWilliam H. Peace, III, petitioner appellee (No. COA94-1283), pro se."
  },
  "file_name": "0001-01",
  "first_page_order": 37,
  "last_page_order": 51
}
