Bauer v. Charter Schools USA, Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH CAROLINA

WESTERN DIVISION

NO. 5:21-CV-492-FL

BRIAN BAUER, )

)

Plaintiff, )

)

v. ) ORDER

)

CHARTER SCHOOLS USA, INC., )

)

Defendant. )

This matter is before the court on defendant’s motion to dismiss (DE 10), pursuant to

Federal Rule of Civil Procedure 12(b)(6). The motion has been briefed fully and the issues raised

are ripe for ruling. For the following reasons, the motion is granted in part and denied in remaining

part as moot.

STATEMENT OF THE CASE

Plaintiff commenced this action against defendant, his former employer, on October 29,

2021, in Wake County Superior Court, asserting claims for wrongful discharge in violation of the

public policy of North Carolina and breach of implied covenant of good faith and fair dealing.

Plaintiff seeks actual damages, interest, and costs.

Defendant removed the action to this court on the basis of diversity jurisdiction and filed

the instant motion to dismiss for failure to state a claim upon which relief can be granted. Plaintiff

noticed a voluntary dismissal of his claim for breach of implied covenant of good faith and fair

dealing,1 and he responded in opposition to the remainder of defendant’s motion pertaining to

wrongful discharge.

STATEMENT OF FACTS

The facts alleged may be summarized as follows. Plaintiff is a citizen and resident of

Johnston County, North Carolina, and defendant is a Delaware corporation engaged in the business

of administering and operating charter schools. “At all times relevant to this litigation, [d]efendant

was operating Cardinal Charter Academy, located at 1020 St. Charles Place in Cary, North

Carolina.” (Compl. (DE 1-3) ¶ 6). “On or about July 12, 2021, [d]efendant hired [plaintiff] to

serve as School Principal for Cardinal Charter Academy.” (Id. ¶ 7). “In taking the position as

School Principal, [plaintiff] relocated himself and his family from Charlotte, North Carolina to

Johnston County.” (Id. ¶ 8).

“Plaintiff started as School Principal at Cardinal Charter Academy on or about August 31,

2021.” (Id. ¶ 9). “Upon taking the position, [p]laintiff learned that there were more than 20 vacant

staff positions at Cardinal Charter Academy due to actions by the prior school administration.”

(Id. ¶ 10). “Within 45 days of his hiring, [p]laintiff had hired 22 new staff, eight of whom were

African American.” (Id. ¶ 11).

According to the complaint, “[w]hile North Carolina’s public policy is to ‘protect and

safeguard the right and opportunity of all persons to seek, obtain and hold employment without

discrimination or abridgement on account of race, religion, color, national origin, age, sex or

handicap,’ the Board for Cardinal Charter Academy disapproved of Plaintiff’s diverse hiring

practices.” (Id. ¶ 12). “At least one member of the Cardinal Charter Academy Board explicitly

stated her disapproval of the hiring practices to [p]laintiff.” (Id. ¶ 13). This alleged “disapproval

1 Because of plaintiff’s voluntary dismissal, defendant’s motion as it pertains to plaintiff’s breach of implied

covenant of good faith and fair dealing is denied as moot.

of [p]laintiff’s diverse hiring practices was also expressed by [d]efendant’s North Carolina State

Director, Maggie Nampon.” (Id. ¶ 14).

“During [p]laintiff’s employment as School Principal, he also helped to author the school’s

Reopening Plan which included, in part, a school-wide mask mandate among school staff.” (Id. ¶

15). “Cardinal Charter Academy’s Reopening Plan was drafted, in part, to bring the school into

compliance with the StrongSchoolsNC guidelines issued by the North Carolina Department of

Health and Human Services.” (Id. ¶ 16). “Specifically, as part of Cardinal Charter Academy's

2020-2021 “Reopening Plan,” the school required ‘all persons on campus to wear masks that meet

school mask requirements at all times . . . Employees may remove cloth face coverings indoors

only when working alone in a classroom or office.’” (Id. ¶ 17). Cardinal Charter Academy’s rules

for mask wearing allegedly “were consistent with the Wake County Public School System’s rules

regarding the subject.” (Id. ¶ 18).

“On or about July 30, 2021, the North Carolina Department of Health and Human Services

issued interim guidance regarding the wearing of masks by school personnel.” (Id. ¶ 19).

“Pursuant to the ‘StrongSchoolsNC Public Health Toolkit (K-l2),’ the North Carolina Department

of Health and Human Services stated that ‘All schools should require all children and staff in

schools K-12th grade to wear face coverings consistently when indoors.’” (Id. ¶ 20).

“Upon taking the position as School Principal, [p]laintiff observed that a large number of

his staff were disregarding the school, county, and state’s rules regarding the wearing of masks.”

(Id. ¶ 21). “Following this observation, on or about August 20, 2021, [p]laintiff held a meeting

during which he castigated the staff to achieve their compliance with the mask mandate.” (Id. ¶

22). “Cardinal Charter Academy’s Reopening Plan also instituted protocols that required the

quarantining of students in certain circumstances.” (Id. ¶ 23). “After the school year began,

[p]laintiff began enforcing the Reopening Plan, including the quarantine requirements.” (Id. ¶ 24).

“Plaintiff received complaints from school parents regarding the Reopening Plan’s quarantine

provisions, including from members of the school’s board whose children had been required to

quarantine.” (Id. ¶ 25).

“On or about September 2, 2021, [d]efendant fired [p]laintiff.” (Id. ¶ 26). “Defendant’s

decision to fire [p]laintiff came without any warning.” (Id. ¶ 27). “Plaintiff has been unable to

find new employment since his sudden firing.” (Id. ¶ 28).

COURT’S DISCUSSION

A. Standard of Review

“To survive a motion to dismiss” under Rule 12(b)(6), “a complaint must contain sufficient

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft

v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

“Factual allegations must be enough to raise a right to relief above the speculative level.”

Twombly, 550 U.S. at 555. In evaluating whether a claim is stated, “[the] court accepts all well-

pled facts as true and construes these facts in the light most favorable to the plaintiff,” but does not

consider “legal conclusions, elements of a cause of action, . . . bare assertions devoid of further

factual enhancement[,] . . . unwarranted inferences, unreasonable conclusions, or arguments.”

Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009).2

B. Analysis

Defendant argues that plaintiff’s wrongful discharge claim fails as a matter of law because

plaintiff does not allege a violation of North Carolina public policy. The court agrees.

2 Internal citations and quotation marks are omitted from all citations unless otherwise specified.

“An employer wrongfully discharges an at-will employee if the termination is done for [1]

an unlawful reason or [2] purpose that contravenes public policy.” Garner v. Rentenbach

Constructors Inc., 350 N.C. 567, 571 (1999). “[T]he public-policy exception was designed to

vindicate the rights of employees fired for reasons offensive to the public policy of this State.” Id.

“In order to support a claim for wrongful discharge of an at-will employee, the termination itself

must be motivated by an unlawful reason or purpose that is against public policy.” Id.

“Although the definition of ‘public policy’ approved by [the North Carolina Supreme

Court] does not include a laundry list of what is or is not ‘injurious to the public or against the

public good,’ at the very least public policy is violated when an employee is fired in contravention

of express policy declarations contained in the North Carolina General Statutes.” Amos v. Oakdale

Knitting Co., 331 N.C. 348, 353 (1992) (quoting Coman v. Thomas Manufacturing Co., 325 N.C.

172, 175 (1989)); see Whiting v. Wolfson Casing Corp., 173 N.C. App. 218, 222 (2005) (“The

public policy exception to the at-will employment doctrine is confined to the express statements

contained within our General Statutes or our Constitution.”).

In addition, “sitting in diversity, a federal court should not create or expand a State’s public

policy.” Time Warner Ent.-Advance/Newhouse P’ship v. Carteret-Craven Elec. Membership

Corp., 506 F.3d 304, 314 (4th Cir. 2007). “[A]bsent a strong countervailing federal interest, the

federal court should not elbow its way into this controversy to render what may be an uncertain

and ephemeral interpretation of state law.” Id.

In this case, plaintiff identifies in his complaint two sources for a violation of public

policy:1) the North Carolina Equal Employment Practices Act (“NCEEPA”), N.C. Gen. Stat. §

143-422.2, and 2) guidelines of the North Carolina Department of Health and Human Services.

The court addresses each in turn below.

1. NCEEPA

In pertinent part, NCEEPA provides:

It is the public policy of this State to protect and safeguard the right and opportunity

of all persons to seek, obtain and hold employment without discrimination or

abridgement on account of race, religion, color, national origin, age, sex or

handicap by employers which regularly employ 15 or more employees.

N.C. Gen. Stat. § 143-422.2(a). While NCEEPA refers to “discrimination or abridgement on

account of “race,” it does not cover claims based upon “retaliation” or “harassment.” McLean v.

Patten Communities, Inc., 332 F.3d 714, 719 (4th Cir. 2003); Whitt v. Harris Teeter, Inc., 359 N.C.

625 (2005) (same, applied to retaliation and hostile work environment); see Jones v. Duke Energy

Corp., 43 F. App’x 599, 600 (4th Cir. 2002) (stating that the court declines “to expand the

provisions of the NCEEPA” beyond its plain terms).

Here, plaintiff does not allege facts permitting an inference that defendant deprived

plaintiff the right or opportunity to seek, obtain or hold employment without discrimination on

account of his race. He claims, rather, that he was terminated because of “his hiring of racially

diverse staff.” (See Compl. ¶ 32). Such a claim, however, is more attenuated than a claim of

retaliation under NCEEPA. Where NCEEPA does not create a claim based on retaliation for

opposition to discriminatory practices, then it follows that it does not establish a claim based on

retaliation for promoting practices that are beneficial to members of a protected class.

Plaintiff argues that he does not assert a “retaliation” claim, but rather an “associational

discrimination claim[.]” (Pl’s Opp. (DE 15) at 5). Regardless of the label plaintiff seeks to place

on his claim, however, it is akin to a retaliation claim, in that plaintiff is not targeted allegedly

because of his own race but rather for the race of others whom he supported. In any event,

NCEEPA does not reference a public policy based upon “association” with others of different

races. Moreover, neither the North Carolina Supreme Court nor the North Carolina Court of

Appeals has recognized a claim under NCEEPA based upon “associational discrimination,” and

no federal court applying North Carolina law has done so either. See, e.g., Sampson v. Leonard,

No. 4:10-CV-121-D, 2012 WL 3822193, at *6 (E.D.N.C. Sept. 4, 2012) (“No North Carolina

appellate court appears to have addressed whether discrimination due to an interracial relationship

equates to race discrimination under section 143–422.2.”). Even if such a theory of interpretation

of NCEEPA is conceivable, this court cannot now be the first to so pronounce under the principle

that this “court should not create or expand a State’s public policy.” Time Warner Ent.-

Advance/Newhouse P’ship, 506 F.3d at 314.

Cases cited by plaintiff are inapposite. In Weidman v. Exxon Mobil Corp., 776 F.3d 214,

221 (4th Cir. 2015), the court recognized a wrongful discharge claim based on plaintiff’s “refusing

to participate in illegal pharmacy distribution activities.” In the instant case, by contrast, plaintiff

does not allege he was fired for refusing to participate in any illegal activities. In Hui Minn Lee v.

Mkt. Am., Inc., No. 1:18CV1046, 2020 WL 1274226, at *8 (M.D.N.C. Mar. 17, 2020), and

Jackson v. Weight Watchers Int’l, Inc., No. 3:10CV363, 2011 WL 1843223, at *4 (W.D.N.C. May

16, 2011), the courts recognized wrongful discharge claims based on the plaintiffs’ own race,

national origin, or age, whereas here, plaintiff does not allege discharge based on his own race,

national origin, or age. Accordingly, those cases illustrate what is lacking in plaintiff’s allegations.

Plaintiff argues that the court should “remand the case back to North Carolina court,” in

the event the court is unable to expand the state’s public policy to encompass plaintiff’s claim

under NCEEPA, citing Willard v. Indus. Air, Inc., No. 1:20-CV-00823, 2021 WL 309116, at *1

(M.D.N.C. Jan. 29, 2021), as an example of this procedure. Willard, however, was not a case

based on diversity jurisdiction, but rather one removed on the basis of federal question jurisdiction,

where the federal claim then was dismissed as a matter of law. See id. at *1. The court had

jurisdiction over the state law claim solely by virtue of supplemental jurisdiction, under which 28

U.S.C. § 1367(c) provided a mechanism for remand. See id. * 7. There is no such applicable

mechanism for remand in this case. Therefore, the dismissal rather than remand is required.

In sum, that part of plaintiff’s wrongful discharge claim premised upon NCEEPA is

dismissed as a matter of law.

2. North Carolina Department of Health and Human Services Guidelines

In his complaint, plaintiff asserts that the North Carolina Department of Health and Human

Services has stated that “[a]ll schools should require all children and staff in schools K-12th grade

to wear face coverings consistently when indoors.” (Compl. ¶ 20). He also suggests that state

guidelines set forth a policy to ensure that “all persons on campus to wear masks that meet school

mask requirements at all times” and that “staying home when sick is essential to keep infections

out of schools.” (Id. ¶ 31). Guidelines promulgated by a state agency, however, are not North

Carolina public policy because they are not “express policy declarations contained in the North

Carolina General Statutes.” Amos, 331 N.C. at 353; see Whiting v. Wolfson Casing Corp., 173

N.C. App. 218, 222 (2005). As a result, they cannot create public policy on which a wrongful

discharge claim may be based. See id. Therefore, there is no actionable public policy basis for

plaintiff’s claim that he was wrongfully discharged for insisting on compliance with such

guidelines.

In opposition to dismissal, plaintiff cites several other North Carolina Statutes that he

contends set public policy in North Carolina. For example, plaintiff cites to N.C. Gen. Stat. §

130A-136, as requiring a principal “who has reason to suspect that a person within the school . . .

has a communicable disease . . . [to] report information required by the Commission to the local

health director of the county.” Plaintiff also cites to N.C. Gen. Stat. § 115C-288(e), as requiring

a principal to “assign duties to teachers with regard to the general well-being and the medical care

of students,” and § 115C-307(b), which imposes a duty on all teachers to “promote the health of

all pupils.”

Application of these statutes to the alleged facts, however, is a stretch. These statutes set

forth the powers and duties of principals and teachers, generally. For example, in context, § 115C-

307(b) provides:

It shall be the duty of all teachers, including student teachers, substitute teachers,

voluntary teachers, and teacher assistants when given authority over some part of

the school program by the principal or supervising teacher, to encourage

temperance, morality, industry, and neatness; to promote the health of all pupils,

especially of children in the first three grades, by providing frequent periods of

recreation, to supervise the play activities during recess, and to encourage

wholesome exercises for all children.

N.C. Gen. Stat. § 115C-307(b) (emphasis added). None of the aforementioned statutes require

adherence to the “mask mandate” and the “quarantining of students” that plaintiff alleges he

required prior to his termination. (Compl. ¶¶ 22-23). In any event, plaintiff has not identified

North Carolina case law that has determined that these statutes establish the public policy of North

Carolina regarding mask mandates and quarantining of students. To so hold here would amount

to an expansion of the state’s public policy and a federal court “elbow[ing] its way into this

controversy to render what may be an uncertain and ephemeral interpretation of state law.” Time

Warner Ent.-Advance/Newhouse P’ship, 506 F.3d at 314. This is especially the case where the

executive order governing COVID-19 restrictions in July 2021 includes the caveat that it is “not

intended to create . . . any individual right, privilege, or benefit, whether substantive or procedural

at law or in equity by any party against . . . any other person.” North Carolina Executive Order

224 (July 29, 2021) at Section 5.

Plaintiff argues that this case is analogous to Deerman v. Beverly California Corp., 135

N.C. App. 1 (1999). Deerman, however, is instructively distinguishable. There, the court

concluded as follows: “If plaintiff, as alleged, was terminated for meeting the minimum

requirements of the practice of nursing as established and mandated by the [Nursing Practice Act,

N.C. Gen. Stat. § 90-171.20(7)] and regulations thereunder, then such termination violated the

public policy of this state to ensure the public a minimum level of safe nursing care.” Id. at 12

(emphasis added). The court noted that the Nursing Practice Act

includes “teaching and counseling” as a function of the practice of nursing. See

G.S. § 90–171.20(7). As such, plaintiff was obligated under the facts herein to

provide “teaching and counseling” to her patient or the patient’s family “regarding

the client's health status and health care for the purpose of (A) increasing

knowledge; (B) assisting the client to reach an optimum level of health functioning

...; [and] (D) making referrals to appropriate resources.” Rule 36.0224(h).

Id. (emphasis added). The court determined that the statute and regulations cited “evidence a clear

public policy in North Carolina to protect public safety and health by maintaining minimum

standards of nursing care.” Id. at 6. Accordingly, the court held that plaintiff stated a claim for

wrongful discharge where she allegedly was terminated after “advis[ing] the family of a patient

that they should consider changing physicians for the patient.” Id. at 5-6.

In this case, by contrast, plaintiff has not alleged any actions he took prior to termination

that similarly were required by public health statute and regulations. Indeed, plaintiff alleges that

the North Carolina Department of Health and Human Services stated that “[a]ll schools should

require” masks, not that they must require masks. (Compl. ¶ 20 (emphasis added)). Further, unlike

the nurse in Deerman, plaintiff is not a licensed health care provider, and there is no practice of

being a principal that is similar to the “practice of nursing,” subject to “minimum standards of

competency . . . to provide the public safe nursing care,” as in Deerman. 135 N.C. App. at 8-9.

Lastly, even if North Carolina public policy conceivably could be extended based upon the

reasoning in Deerman to statements made in statutes governing duties and authorities of principals,

this court sitting in diversity is not in the position to extend public policy in this manner. See Time

Warner Ent.-Advance/Newhouse P’ship, 506 F.3d at 314.

In sum, that part of plaintiff's claim for wrongful discharge in violation of public policy

based upon Department of Health and Human Services guidelines fails as a matter of law.

CONCLUSION

Based on the foregoing, defendant’s motion (DE 11) is GRANTED IN PART and DENIED

IN PART AS MOOT, as set forth herein. Plaintiffs claim for wrongful discharge is DISMISSED

for failure to state a claim upon which relief can be granted. The clerk is DIRECTED to close this

case.

SO ORDERED, this the 13th day of July, 2022.

United States District Judge

1]