The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:23-CV-320-BO
JOANNE HONN, )
Plaintiff,
V. ORDER
THE TOWN OF PIKEVILLE, )
Defendant.
This cause comes before the Court on defendant’s motion for partial summary judgment
[DE 21]. Plaintiff has responded and the motion is ripe for ruling. For the following reasons, the
motion is granted.
BACKGROUND
The Town of Pikeville employed plaintiff as town clerk. [DE 27, § 1]. Plaintiff prepared
checks for payment of the town’s financial obligations and maintained employment and payroll
records for the town. /d. at § 2. After Hurricane Florence damaged the town in 2018, it received
monetary grants for repair and reconstruction from the Federal Emergency Management Agency
(FEMA) and the North Carolina Department of Public Safety (NCDPS). /d. at §§ 5, 6. Thereafter,
checks from the town’s account issued to various affected entities, including a check for $1,779.08
made out to plaintiff. /d. at §§ 7, 8. The parties dispute whether plaintiff herself signed the check
as payer on behalf of the town. See id.
On May 6, 2020, the town’s attorney Harry Lorello notified plaintiff that the Town Board
of Commissioners had voted to dismiss her. Jd. at § 12. The notice contained detailed grounds for
plaintiffs dismissal:
(1) Unauthorized altering of time between sick and vacation; (2) willfully refusing
to perform assigned tasks including reconciling bank accounts, forcing the Town
to incur additional expenses in the amount of $5,000 and constituting direct
insubordination; (3) failing to abide by the Town’s mandate requiring “punching
in” and “punching out,” with over 100 documented instances of Plaintiff's failure
to comply with this policy, despite repeated e-mails and directives from the Town
to correct this issue; (4) keeping a second, unauthorized set of books for time and
payroll on Plaintiff's work computer rather than utilizing the Town’s payroll
system, resulting in a discrepancy between the payroll system and Plaintiff's
unauthorized records; (5) “penciling in” time-cards; and (6) unauthorized self-
awarding of compensatory time, violating Section 9 of the Town’s Personnel
Policy, which states that employees in exempt positions, such as the Town Clerk,
do not receive pay for hours worked in excess of normal work periods.
Id. at 13; [DE 22-4]. Plaintiff disputes the truth of all these allegations, but not that they appeared
in her notice of dismissal or that they served as the purported basis for her termination. [DE 27, ]
13].
On June 1, 2020, less than a month later, the Board voted to reinstate plaintiff to her former
position, and plaintiff returned to serve as town clerk. /d. at 27. On June 2, 2020, the very next
day, town administrator Lisa Jones reported to the Wayne County Sheriff's Department that
plaintiff had embezzled funds. [DE 26-3, § 89]. On June 17, plaintiff was arrested in her workplace
and charged with embezzlement and obtaining property by false pretense. [DE 27, § 29]. The town
terminated her salary and benefits that same day and advised her to remain away from the town
office. Jd. at § 30. On December 6, 2022, the criminal charges against plaintiff were dismissed. /d.
at 31.
Plaintiff now sues the town, alleging claims based on (1) denial of procedural due process
under 42 U.S.C. § 1983 of the United States Constitution and Article 1, Sections 1 and 19 of the
North Carolina Constitution; (2) denial of substantive due process under 42 U.S.C. § 1983 of the
United States Constitution and Article 1, Sections 1 and 19 of the North Carolina Constitution; (3)
denial of equal protection and due process under the North Carolina Constitution; and (4) recovery
of salary and benefits allegedly due her as a public officer. Plaintiff moved for partial summary
judgment on the first two causes of action. [DE 21].
ANALYSIS
A motion for summary judgment may not be granted unless there are no genuine issues of
material fact for trial and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue
of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “Where, as here, the
nonmoving party bears the ultimate burden of proof at trial, the moving party may discharge its
initial burden at summary judgment by ‘showing .. . that there is an absence of evidence to support
the nonmoving party’s case.”” Anderson v. Diamondback Inv. Grp., LLC, 117 F.4th 165 (4th Cir.
2024) (quoting Celotex, 477 U.S. at 325 (1986)).
If that burden has been met, the nonmoving party must then come forward and establish
the specific material facts in dispute to survive summary judgment. Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 588 (1986). In determining whether a genuine issue of material
fact exists for trial, a trial court views the evidence and the inferences in the light most favorable
to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007). However, “[t]he mere existence
of a scintilla of evidence” in support of the nonmoving party’s position is not sufficient to defeat
a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). “A
dispute is genuine if a reasonable jury could return a verdict for the nonmoving party. A fact is
material if it might affect the outcome of the suit under the governing law.” Libertarian Party of
Virginia v. Judd, 718 F.3d 308, 313 (4th Cir. 2013) (internal quotation marks and citations
omitted). Speculative or conclusory allegations will not suffice. Thompson v. Potomac Elec. Power
Co., 312 F.3d 645, 649 (4th Cir. 2002).
Defendant’s motion first relies on plaintiff's lack of a liberty or property interest to form
the basis of her due process claims. “In assessing a procedural due process claim, unless there has
been a deprivation of a protected liberty or property interest by state action, the question of what
process is required is irrelevant, for the constitutional right to due process is simply not
implicated.” Jota Xi Chapter Of Sigma Chi Fraternity v. Patterson, 566 F.3d 138, 146 (4th Cir.
2009) (cleaned up). The same is true of substantive due process claims.
Plaintiff had neither a liberty nor a property interest in continued employment.' “North
Carolina is an at-will employment state.” Knight v. Vernon, 214 F.3d 544, 553 (4th Cir. 2000).
“As such, an employee-at-will does not have a constitutionally protected right to continued
employment and does not have the benefit of the protections of procedural due process.” Young v.
Annarino, 123 F. Supp. 2d 915, 923 (W.D.N.C. 2000).
A liberty interest, however, can also exist in a person’s “reputation” or ability “to engage
in any of the common occupations of life.” Sciolino v. City of Newport News, 480 F.3d 642, 646
(4th Cir. 2007). Specifically, “a Fourteenth Amendment ‘liberty interest is implicated by public
announcement of reasons for an employee's discharge.’” /d. at 645-46. To establish a protected
liberty interest on this theory, Plaintiff must establish that the charges against her “(1) placed a
stigma on [her] reputation; (2) were made public by the employer; (3) were made in conjunction
with [her] termination or demotion; and (4) were false.” /d. at 646 (4th Cir. 2007).
' Plaintiff has no liberty interest in continued employment with the town. “There is no violation of a liberty interest in
the loss of a particular job.” Brewington v. Bedsole, No. 91-120-CIV-3-H, 1993 WL 819885, at *26 (E.D.N.C. May
14, 1993). Plaintiff also had no property interest in continued employment. “[A] property interest in employment can
be created by statute, ordinance, or express or implied contract,” and “the sufficiency of the claim of entitlement must
be decided by reference to state law.” Pittman v. Wilson Cnty., 839 F.2d 225, 227 (4th Cir. 1988). In Pittman, the
Fourth Circuit found that a county employment policy creating restrictions on the circumstances by which an employee
could be discharged did not create a property interest in county employment, because the policy was imposed without
“the formality required for the enactment of an ordinance.” /d. at 229. Plaintiff has not alleged the policies surrounding
the Town of Pikeville’s employee discharge procedures are formal ordinances.
The first, third, and fourth of these above elements are generally either established or
disputed by the parties. The only element seriously at issue is whether the town “made public” its
reasons for discharging plaintiff. In Sciolino, 480 F.3d 642, the Fourth Circuit clarified what
constitutes publication in this context. Alleged harms to reputation alone are insufficient to invoke
protection of the Due Process Clause without “some more tangible interests such as employment.”
Paul v. Davis, 424 U.S. 693, 701 (1976). Therefore, Sciolino specifically held a plaintiff must
demonstrate a likelihood, not just a possibility, that prospective employers or the public at large
will inspect the defamatory personnel file. 480 F.3d at 650.
Plaintiff appears to contend that either the notice of dismissal which the town conveyed to
her on May 6, 2020, the statements Jones made to the Sheriff's Department on June 2, 2020, or
plaintiffs final termination immediately following the criminal charges brought against her on
June 17, 2020, were publications that implicate her liberty interest in her reputation.
I. Notice of Dismissal
The town’s reasons for terminating plaintiff are summarized in its notice of dismissal. [DE
22-4]. Plaintiff, depending on N.C.G.S. § 160A-168(b)(11), contends that this notice is a
publication giving rise to a liberty interest in her reputation.
(b) The following information with respect to each city employee is a matter of
public record .. . (11) Date and type of each dismissal, suspension, or demotion for
disciplinary reasons taken by the municipality. If the disciplinary action was a
dismissal, a copy of the written notice of the final decision of the municipality
setting forth the specific acts or omissions that are the basis of the dismissal.
N.C.G.S. § 160A-168(b)(1 1).
It is plain from this statute that the notice of dismissal is a public record. The fact that the
town’s reasons for discharging plaintiff are passively available to plaintiff's prospective
employers, however, does not elevate the town’s conduct to active publication. In Ledford v.
Delancey, a predecessor to Sciolino, the Fourth Circuit explained that a “[p]laintiff has a right that
his personnel file contain no substantially false information with respect to his work performance
or the reasons for his discharge when that information is available to prospective
employers.” Ledford v. Delancey, 612 F.2d 883, 887 (4th Cir. 1980). In Ledford, though, the
plaintiff had already alleged the circulation of false information to prospective employers. Sciolino
established a different standard applicable when a plaintiff has not alleged actual circulation,
relying instead on porential circulation to constitute publication. Sciolino, 480 F.3d at 647-648.
The standard expressed in Sciolino requires “a likelihood that prospective employers” will
“inspect the file.” 480 F.3d at 650.
A plaintiff can meet this standard in two ways. First, the employee could allege
(and ultimately prove) that his former employer has a practice of releasing
personnel files to all inquiring employers. Second, the employee could allege that
although his former employer releases personnel files only to certain inquiring
employers, that he intends to apply to at least one of these employers. /n either case,
he must allege that the prospective employer is likely to request the file from his
former employer.
Id. (emphasis added).
Because of N.C.G.S. § 160-168(b)(11)’s mandate, plaintiff has established that the town
has a practice of releasing personnel files to inquiring employers. Plaintiff does not allege any
likelihood that prospective employers will request the file. She does allege in her amended
complaint that the actions of the town rendered her “unemployable.” [DE 1-1, p. 43, 4 111-112].
However, given that the criminal charges filed against her were brought by a different agency, and
plaintiff has not asserted that the Town of Pikeville’s publications, rather than the criminal charges,
were viewed by her prospective employers or formed the basis for adverse hiring decisions, this
statement is conclusory.
Plaintiff might purport that on May 6 when she received the notice of dismissal, the Town
of Pikeville itself was a prospective employer that in fact accessed the defarnatory statements in
that notice. Given that the town reinstated her, this argument would be sophistical arid moot.
II. Jones’ Statements to the Sheriff's Department
On June 2, 2020, a day after the town reinstated plaintiff as town clerk, Jones visited the
Sheriff's Department and reported that plaintiff had embezzled funds. [DE 26-3, § 89]. As a
threshold matter, although the bringing of criminal charges certainly implicates the liberty interests
of the accused, plaintiff's employer itself brought no criminal charges. Its involvement was
confined to the report. The inquiry here is whether Jones’ statements to the Sheriff's Department,
on their own, are a publication implicating plaintiff’s liberty interest in her reputation among future
employers.
Crucially, immediately before Jones reported plaintiff's alleged embezzlement to the
Sheriff's Department, the town had reinstated plaintiff. Jones’ statements to the Sheriff were not
made “in conjunction with [her] termination or demotion,” meaning the statements fail the third
Sciolino factor. Sciolino, 480 F.3d at 646. The United States Supreme Court in Paul vy. Davis,
establishing what has come to be known as the “stigma plus” test, recognized that “[p]ublication
of stigmatizing charges alone, without damage to ‘tangible interests such as employment,’ does
not invoke the due process clause.” Johnson v. Morris, 903 F.2d 996, 999 (4th Cir. 1990) (citing
Paul v. Davis, 424 U.S. 693, 701 (1976)). For a defamatory statement to iraplicate a liberty interest,
it is not sufficient that it creates a stigma; it must accompany adverse employment action such as
termination of government employment.
Plaintiffs case fails the “stigma plus” test. In fact, the employment action most proximate
to Jones’ visit with the Sheriff was unequivocally positive: plaintiff had just been reinstated. Her
final termination, on June 17, 2020, was the result of charges being brought against her by an
entirely different agency than the town. There is no indication the town would have terminated
plaintiff based only on Jones’ statements to the Sheriff in the absence of criminal charges.
III. Final Dismissal
Plaintiff's final, June 17 termination fails to implicate a liberty interest for the same reasons
as plaintiff's initial May 6 termination fails to implicate a liberty interest, namely, because plaintiff
fails to allege a likelihood that prospective employers would inspect the town’s statement of
reasons for her termination. Furthermore, the only new relevant information in her personnel file
at plaintiff's final termination, as compared to her May 6 termination, was that criminal charges
had been brought against her. Even if plaintiff alleged that the town published this information in
a public record and a likelihood that her prospective employers would inspect her file, the town’s
publication of plaintiff's criminal charges would independently fail to implicate a liberty interest.
The Fourth Circuit has held that an employer’s public announcement of a criminal
investigation into its employee’s job performances, even when accompanying a termination, is not
a constitutional deprivation of liberty. See Jackson v. Long, 102 F.3d 722, 730 (4th Cir. 1996).
“While there can be no doubt that the announcement of an investigation places suspicion on those
persons being investigated, that suspicion is inherent when undertaking any investigation.” See id
Because the town’s conduct deprived plaintiff of no liberty interest, she was not entitled to
a name-clearing hearing, and this Court need not reach the issue of whether she was afforded the
opportunity for one. Plaintiffs lack of a protected liberty interest renders all remaining factual
disputes immaterial, and defendant is entitled to a judgment as a matter of law.
CONCLUSION
For the foregoing reasons, defendant’s partial motion for summary judgment
[DE 21] is GRANTED.
SO ORDERED, this és day of September 2025.
TERRENCE W. BOYLE
UNITED STATES DISTRIC DGE