Ayers v. Currituck Cnty. Dep't of Soc. Servs.

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA23-420

Filed 2 April 2024

Office of Administrative Hearings, No. 17 OSP 08518

JUDITH M. AYERS, Petitioner,

v.

CURRITUCK COUNTY DEPARTMENT OF SOCIAL SERVICES, Respondent.

Appeal by Respondent from final decision entered 31 January 2023 by

Administrative Law Judge Melissa Owens Lassiter in the Office of Administrative

Hearings. Heard in the Court of Appeals 1 November 2023.

Hornthal, Riley, Ellis, & Maland, L.L.P., by John D. Leidy, for petitioner-

appellee.

Teague, Campbell, Dennis & Gorham, L.L.P., by Luke A. West and Jennifer B.

Milak, and The Twiford Law Firm, P.C., by Courtney Hull, for respondent-

appellant.

MURPHY, Judge.

For the third time, Respondent-Appellant Currituck County Department of

Social Services (“DSS”) appeals from an Office of Administrative Hearings (“OAH”)

final decision reversing the dismissal of Petitioner-Appellee Judith Ayers from her

position as Social Worker Supervisor III for unacceptable personal conduct (“UPC”).

Having twice remanded, we now affirm.

A State agency may only discipline a career state employee for just cause.

N.C.G.S. § 126-34.02 (2023). “Just cause is a flexible concept, embodying notions of

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equity and fairness, that can only be determined upon an examination of the facts

and circumstances of each individual case.” Wetherington v. N.C. Dep’t of Pub. Safety

(“Wetherington I”), 368 N.C. 583, 591 (2015) (marks omitted). This requires the

agency to consider various factors and balance the equities to arrive at the

appropriate level of discipline. See Wetherington v. NC Dep’t of Pub. Safety

(“Wetherington II”), 270 N.C. App. 161, 194, disc. rev. denied, 374 N.C. 746 (2020). It

does not permit the agency to manipulate its inquiry to contrive just cause for a

preordained level of discipline. See id. at 185-201 (reversing the ALJ’s determination

of just cause where the agency shoehorned a per se rule into the case’s eponymous

multifactor just cause analysis).

An agency’s determination of just cause is subject to both administrative and

judicial review. See Harris v. N.C. Dep’t of Pub. Safety, 252 N.C. App. 94, 98, aff’d

per curiam, 370 N.C. 386 (2017). At both levels, the tribunal reviews whether the

facts support the existence of just cause de novo. Id. at 100, 102. However, “the

[administrative law judge (‘ALJ’)] is the sole fact-finder, and the only tribunal with

the ability to hear testimony, observe witnesses, and weigh credibility.” Id. at 108.

Where the ALJ concluded the agency lacked just cause based on its findings of

fact and where those findings were supported by substantial evidence, the agency

must show the ALJ’s determination was an error of law. In such cases, if the agency

merely argues how its own version of the facts might have supported a contrary

conclusion without demonstrating that the ALJ committed errors of law, the agency

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does not carry its burden of proving it acted with just cause because “we defer to the

ALJ’s findings of fact [when supported by substantial evidence], even if evidence was

presented to support contrary findings.” Id.

Here, we hold the ALJ’s findings of fact, to the extent necessary for the

ultimate just cause determination, were supported by substantial evidence in the

record. We further hold, upon de novo review, that there was no error in the ALJ’s

determination that DSS lacked just cause to dismiss Ayers for her single instance of

UPC in light of the facts and circumstances of this case. Accordingly, we affirm the

ALJ’s final decision to retroactively reinstate Ayers with back pay and attorneys’ fees,

subject to a two-week suspension without pay and subject to her taking additional

cultural diversity and racial sensitivity training.

BACKGROUND

The facts of Ayers’s UPC and DSS’s initial response are fully set out in the

initial appeal. Ayers v. Currituck Cnty. Dep’t of Soc. Servs. (“Ayers I”), 267 N.C. App.

513, 514-19 (2019). The facts of the ALJ’s Final Decision on Remand from Ayers I are

fully set out in the second appeal. Ayers v. Currituck Cnty. Dep’t of Soc. Servs. (“Ayers

II”), 279 N.C. App. 514, 515-19 (2021). Partially borrowing from Ayers II, “we include

a recitation of the facts and procedural history relevant to the issues currently before

us”:

A. Prior to Incident

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. . . Ayers had been employed with DSS from 2007 until the

incident in 2017. Ayers was the supervisor for the Child

Protective Services Unit at DSS who reported directly to

the DSS Director. Neither party contests that Ayers was a

career State employee.

Ayers consistently received positive work performance

reviews and had never been disciplined as a DSS employee

before the incident occurred. Until 30 June 2017, her boss

was the DSS Director, Kathy Romm, who had hired Ayers;

Romm had asked Ayers whether she wanted to take her

position upon Romm’s retirement. Ayers declined to

pursue the position, and Romm hired another DSS

employee, Samantha Hurd. Both Ayers and Hurd are

Caucasian women.

Prior to Hurd’s promotion, she supervised DSS’s Foster

Care Unit, and she and Ayers had a history of

disagreements and conflict in their roles. The

disagreements and conflict continued after Hurd’s

promotion.

B. Incident

On 3 November 2017, Hurd asked Ayers about a racial

demarcation–“NR”–that a social worker had included on a

client intake form; Hurd did not recognize the demarcation,

asked Ayers what it stood for multiple times, and Ayers

responded with a racial epithet. Ayers claimed she said

“nigra rican,” while Hurd claimed Ayers said “[n-----] rican”

(“the N word”). According to testimony from Hurd and

Ayers, Ayers initially laughed about the comment, but

became apologetic and embarrassed soon afterward. After

investigation, Hurd and Ayers discovered the client

referred to on the form was Caucasian.

C. Disciplinary Action

The incident occurred on Friday, 3 November 2017, and

Hurd conferred with DSS’s counsel over the following

weekend. After receiving guidance, Hurd applied a twelve-

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factor test, derived from a guide for North Carolina public

employers published by the University of North Carolina

at Chapel Hill Institute of Government, to Ayers’s

comment and instituted disciplinary proceedings against

her on Monday, 6 November 2017. . . .

....

After meeting with Ayers, Hurd placed her on

investigatory status with pay, and subsequently

terminated her employment with DSS; Ayers appealed,

and Hurd affirmed her decision. Ayers filed a Petition for

a Contested Case Hearing with the Office of

Administrative Hearings.

D. 13 June 2018 ALJ Decision

An ALJ held a contested case hearing on 19 April 2018 and

reversed Hurd’s termination decision in a Final Decision

filed 13 June 2018 (“First ALJ Order”). Findings of Fact 23

and 47 in the First ALJ Order described Ayers’s and Hurd’s

different recollections of the word Ayers used, but the First

ALJ Order also included the word “negra-rican,” which was

a third variation of the word. A fourth variation, “negro-

rican,” appeared in Conclusion of Law 13. The ALJ applied

the three-prong test from Warren, determined the first

prong of “whether the employee engaged in the conduct the

employer alleges[,]” was not met in light of the

disagreements on verbiage, and reversed Hurd’s

termination of Ayers. DSS appealed the First ALJ Order.

E. Ayers I

In an opinion filed 1 October 2019, we vacated and

remanded the First ALJ Order. We noted Finding of Fact

23 from the First ALJ Order, which included a third and

incorrect variation of the word used when describing the

disagreement on epithet verbiage between Ayers and

Hurd, was the “critical finding driving the ALJ’s analysis”

in its reversal of Hurd’s termination decision. We found,

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the ALJ’s [f]inding is not supported by the

evidence in the [r]ecord[, particularly Ayers’s

own testimony]. It is then apparent the ALJ

carried out the remainder of its analysis

under the misapprehension of the exact

phrase used and that the ALJ’s

understanding of the exact phrase used was

central to both the rest of the ALJ’s [f]indings

and its [c]onclusions of [l]aw. Therefore, we

vacate the [First ALJ Order] in its entirety

and remand this matter for the ALJ to

reconsider its factual findings in light of the

evidence of record and to make new

conclusions based upon those factual findings.

In addition to noting “the ALJ’s conclusions and

considerations of the ‘totality of the circumstances’ were

also grounded in its misapprehension of the evidentiary

record[,]” we held either “‘n----- rican’ or the variant ‘nigra

rican’” “constitute[d] a racial epithet[,]” and DSS “met its

initial burden of proving [Ayers] engaged in the conduct

alleged under Warren.” In vacating the First ALJ Order,

we instructed the ALJ to “make new findings of fact

supported by the evidence in the record and continue its

analysis under Warren of whether [Ayers] engaged in

unacceptable conduct constituting just cause for her

dismissal or for the imposition of other discipline.”

F. ALJ Decision on Remand

On remand, the ALJ entered its Final Decision on Remand

(“Second ALJ Order”) on 5 May 2020, made additional

findings of fact and conclusions of law, applied the three-

prong Warren test, and reversed DSS’s termination of

Ayers. The ALJ decided the first two prongs of the Warren

test–Ayers engaging in the conduct alleged and the conduct

constituting unacceptable personal conduct–were met. . . .

[Specifically, the ALJ concluded Ayers’s conduct was that

for which no reasonable person should expect to receive

prior warning, a willful violation of DSS’s written

personnel policy, and conduct unbecoming of an employee.]

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However, the ALJ concluded the third prong of the Warren

test–whether DSS had just cause for the disciplinary action

taken under N.C.G.S. § 126-35(a)–was not met. In

concluding a lesser disciplinary measure was warranted,

the Second ALJ Order focused on: Ayers’s “ten-year

employment history with no prior disciplinary actions" and

high performance reviews; that Hurd “did not think it was

significant whether anyone heard [Ayers’s] comment”; the

lack of evidence that this one-time comment was

harassment of a specific individual or caused actual harm

to DSS, until DSS revealed the incident to others; and that

DSS’s decision “was influenced by . . . past philosophical

differences [between Hurd and Ayers] and their past

history.” However, the Second ALJ Order also found that

“[DSS] did not consider if [Ayers’s] . . . comment caused any

actual harm to the agency’s reputation. [DSS] only

considered potential harm to the agency.” The Second ALJ

Order also acknowledged the lack of resolution regarding

whether anyone other than Hurd heard Ayers’s epithet,

which the ALJ deemed a “necessary consideration.”

Despite the lack of resolution of the resulting harm factor

from Wetherington I, the Second ALJ Order retroactively

reinstated Ayers with a two-week suspension without pay,

ordered back pay, and ordered reimbursement of Ayers’s

attorney fees.

Id. (alterations in original) (citations omitted); (citing Warren v. N.C. Dep’t of Crime

Control & Pub. Safety (“Warren I”), 221 N.C. App. 376, disc. rev. denied, 366 N.C. 408

(2012)).

G. Ayers II

DSS appealed the Second ALJ Order, arguing “(A) ‘the ALJ made findings of

fact not supported by substantial evidence’ in its Second ALJ Order; (B) specific

conclusions of law from the Second ALJ Order are erroneous; and (C) DSS ‘had just

cause to dismiss [Ayers].’” Id. at 520 (alterations in original). In an opinion filed 5

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October 2021, we determined we could not meaningfully conduct our appellate review

because, “[f]or us to conduct meaningful appellate review regarding just cause for

disciplinary action, the ALJ must [have made] complete findings of fact regarding the

harm to DSS resulting from Ayers’s UPC, including whether any occurred”; but

the ALJ found that Hurd, as DSS’s representative in the

disciplinary decision regarding Ayers, did not consider the

necessary resulting harm factor, and thus did not consider

all of the required factors.

....

Substantial evidence support[ed] the ALJ’s determination

that Hurd, and DSS, did not consider a required factor

under Wetherington I.

Id. at 520, 524-26. Accordingly, we “remand[ed] to the ALJ with instructions to

remand to DSS to conduct a complete, discretionary review regarding Ayers’s UPC

and corresponding disciplinary action.” Id. at 526.

H. DSS’s Investigation on Remand and Final Agency Decision Addendum

Per our instructions, the ALJ further remanded to DSS “to conduct a complete

disciplinary review[.]” In the course of this investigation, Hurd reviewed the prior

documentation of the case: the First and Second ALJ Orders; our Ayers I and Ayers

II opinions; conference and hearing transcripts; termination, reply, and appeal letters

between Ayers and Hurd; various DSS policies and job descriptions; the North

Carolina State Administrative Code; and the case file whose incomplete reporting

was the genesis this now-half-decade-long series of appeals and remands. Hurd

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additionally reviewed DSS’s daily reception logs of visitors and determined a client

was in the building at the time of Ayers’s UPC but did not further investigate whether

the client was aware of the incident. Hurd also, for the first time, interviewed Tiffany

Sutton, a black employee under Ayers’s supervision whom Hurd previously identified

as speculatively having overheard Ayers’s UPC. Sutton had not overheard Ayers’s

UPC but learned of it at some indeterminable time from gossip surrounding Ayers’s

absence. Hurd did not interview any other employee as part of this investigation.

Upon concluding her investigation, Hurd issued DSS’s Final Agency Decision

Addendum (“Addendum”) setting forth Hurd’s and DSS’s bases for resulting and

potential harm, including:

Harm to the agency’s provision of services

The ability to perform the essential functions of the Social

Work Supervisor III position has been irreparably harmed

as a result of your conduct. Your unacceptable conduct

caused a complete abrogation of your ability to fulfil

operational and personnel responsibilities. These duties

require supervisors to function autonomously with little to

no supervision. Engaging in this conduct altered your

ability to perform independently in the work environment.

Further, your ability to testify objectively before any

tribunal has been called into question. That is a risk I

cannot accept. Your ability to supervise any program or

exercise sound judgement [sic] in any dynamic has been

completely compromised.

You are unable to complete any job task in the agency

without total supervision. This is a burden the agency

cannot bear. Your conduct interrupted the normal duties

of the Director and other supervisory personnel causing

them to assume your workload, a disruption to the

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workflow of the agency with no other back-up position

available. A bias was demonstrated by stereotyping a

family[.] . . . Bias negatively affects every aspect on the

continuum of social services programming, including child

welfare reporting. During the time between the pre-

disciplinary conference and the local appeals hearing you

submitted contradictory information regarding your

conduct. . . . This insubordination[1] caused harm to the

agency, as such undermines the ability to trust your

judgement [sic], or allow you to complete essential job

duties autonomously as is required. Thus, I have no

confidence in your ability to be forthcoming and honest in

all aspects of your work. You cannot be permitted to

perform work in any capacity within the agency with

certitude you will not alter, suppress, or omit material

facts. Moreover, your conduct has damaged my confidence

in your ability to serve with integrity as Director’s

Designee and there was no back up to fulfil that role in your

absence.

Harm to morale

Your conduct offended a Currituck County employee, the

Social Services Director. I consider your conduct to be

highly offensive, vulgar, crude, and discriminatory. It

further harmed the morale of the agency by creating an

uncomfortable and untrusting team atmosphere among

subordinates, colleagues, and your immediate supervisor.

The authority given to you as a supervisor was undermined

1 The ALJ found,

Hurd never charged Petitioner with being insubordinate in any

disciplinary letter or advised Petitioner that she was being terminated

from employment for being insubordinate. The first time [] Hurd

determined that Petitioner was engaged in insubordination in

November 2017, was in Hurd’s [21 March 2022] Final Agency Decision

Addendum. . . . [T]he evidence presented in these proceedings failed to

show that Petitioner was insubordinate during the DSS local appeals

hearing.

DSS challenges this finding but does not argue we should consider Ayers’s alleged insubordination in

our analysis of just cause.

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by your actions and the conduct destroyed the trust of your

employer to rely upon you to make fair, objective decisions

without concern for prejudice.

Harm to agency mission and work of the agency

The conduct violated the following policies: 1.) [DSS’s] Civil

Rights Action [sic] of 1964 Requirements policy, 2.) The

Currituck County Personnel Policy, . . . and 3.) The . . .

[DSS] Family Services manual . . . .

Violating policy constitutes harm to the agency because it

frustrates the purpose of having a policy to follow at all.

Between the investigatory leave period and the local

appeals hearing, you failed to demonstrate introspection

regarding your conduct. This negates any prospect of

rehabilitation without unacceptable risk. The agency

suffered yet more harm by having to post the position,

recruit, and train a replacement. In the interim, the

Director and another supervisor assumed your job duties

which interfered with the daily business operations of the

agency.

Harm to agency budget

. . . . As a result of the lack of cooperation and subsequent

dismissal, the department was required to retain an

attorney, incur legal expenses, hire and train a

replacement for the position, and interrupt other personnel

from their duties to be involved in the litigation process.

Detrimental to state service- social harm

[The Addendum cursorily characterizes Ayers’s UPC as

hate speech and offensive conduct detrimental to state

services. DSS does not argue we should consider this

‘social harm’ in our just cause analysis.]

Potential harm

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. . . . [T]he Director is accountable to the social services

board, and is responsible and accountable for the actions,

conduct and performance of departmental employees. . . .

The [DSS] Board agrees with my decision to terminate your

employment. Retaining your employment in any capacity

within the department after using a racial epithet during

the course of your governmental duties, would cause the

board to doubt my ability to effectively administer our

programming, personnel and distrust my decision making

and judgement. This would adversely affect the

relationship between the Director and the board and would

damage the integrity they expect regarding the

performance of my duties. . . .

As referenced, your conduct severely violated crucial

polices [sic] and rules. An employee who cannot be trusted

to follow rules when in the presence of the Social Services

Director, cannot be trusted to follow rules when working

independently. Your continued employment in any

capacity would make the agency vulnerable to negligent

retention and supervision which would subject the county

to liability.[2] Additionally, your good faith and credibility

could be of great concern, thereby damaging your

testimony in the multiple cases in which you are required

to testify. Continuing to entrust you with the oversight of

child welfare cases, or any other matters within the agency

knowing that you have demonstrated overt racism, bias

and stereotyping in the course of your work, subjects the

county to additional liability.

Your conduct violated the agency’s compliance with the

Civil Rights Act of 1964. The violation could potentially

affect the agency’s receipt of federal funding. Your actions

would affect public trust, client confidence, and destroy the

agency’s credibility in the community if I simply ignored

your remarks and returned you to any employment.

2 We do not opine on Hurd’s legal conclusions, except to the extent discussed in our analysis

as necessary for our ultimate just cause conclusion.

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After conducting a thorough investigation and careful

review of the totality of facts and circumstances, I affirm

my decision to terminate your employment . . . for

unacceptable personal conduct. I conclude you are unable

to complete any of the above duties fairly or independently

without total and continuous supervision. The need and

frequency of total supervision required to continue your

employment in a supervisory position or any other position

within the department is an accommodation the

department is unable to implement. There are no positions

available within the department of social services that do

not include interacting with and providing services to the

public in a fair, non-biased manner. . . .

I. 31 January 2023 ALJ Decision

On 31 January 2023, the ALJ entered its Amended Final Decision on Remand,

containing additional findings of fact and conclusions of law. The ALJ found the

Addendum “unreasonable and [] most likely the result of [Hurd’s] bias in favor of

supporting and justifying her original action in dismissing Petitioner.” She further

found the Addendum’s bases for actual harm “[were] all either descriptions of

potential harm or resulted from [] Hurd’s decision to dismiss Petitioner and were not

caused by or the result of the incident itself” and that “Hurd’s subjective opinion”

“that Petitioner was not fit to be entrusted with her supervisory or other duties” was

“unsubstantiated, speculative, [] unreasonable[,] not supported by a preponderance

of the evidence[,] and [] contrary to other evidence in the record.”

Determining “Petitioner’s unacceptable conduct did not cause Respondent to

experience any actual harm[,]” the ALJ concluded DSS lacked just cause to dismiss

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Ayers and retroactively reinstated Ayers with back pay and attorney fees, subject to

a two-week suspension without pay and additional cultural diversity and racial

sensitivity training.

DSS appeals, again arguing it had just cause to dismiss Ayers and challenging

specific findings of fact and conclusions of law. On this appeal, DSS additionally

requests we reverse the ALJ’s award of attorneys’ fees based on its view of the merits.

ANALYSIS

A. Standard of Review

“It is well settled that in cases appealed from administrative tribunals,

questions of law receive de novo review, whereas fact-intensive issues such as

sufficiency of the evidence to support an agency’s decision are reviewed under the

whole-record test.” N.C. Dep’t of Env’t & Nat. Res. v. Carroll, 358 N.C. 649, 659

(2004); see N.C.G.S. § 150B-51(c) (2023). “Under the de novo standard of review, the

[reviewing] court considers the matter anew and freely substitutes its own judgment

for the agency’s.” Wetherington II, 270 N.C. App. at 172. In contrast, under the whole

record test,

[the reviewing court] may not substitute its judgment for

the [ALJ’s] as between two conflicting views, even though

it could reasonably have reached a different result had it

reviewed the matter de novo. Rather, a court must

examine all the record evidence—that which detracts from

the [ALJ’s] findings and conclusions as well as that which

tends to support them—to determine whether there is

substantial evidence to justify the [ALJ’s] decision.

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Substantial evidence is relevant evidence a reasonable

mind might accept as adequate to support a conclusion.

We undertake this review with a high degree of deference

because it is well established that

[i]n an administrative proceeding, it is the prerogative and

duty of [the ALJ], once all the evidence has been presented

and considered, to determine the weight and sufficiency of

the evidence and the credibility of the witnesses, to draw

inferences from the facts, and to appraise conflicting and

circumstantial evidence. The credibility of witnesses and

the probative value of particular testimony are for the

[ALJ] to determine, and [the ALJ] may accept or reject in

whole or part the testimony of any witness.

Harris, 252 N.C. App. at 100 (fifth, sixth, seventh, and eighth alterations in original)

(marks and citation omitted); see Carroll, 358 N.C. at 674 (“[T]he ‘whole record’ test

is not a tool of judicial intrusion; instead, it merely gives a reviewing court the

capability to determine whether an administrative decision has a rational basis in

the evidence.”).

Thus, “we recognize the ALJ is the sole fact-finder, and the only tribunal with

the ability to hear testimony, observe witnesses, and weigh credibility. As such, we

defer to the ALJ’s findings of fact, even if evidence was presented to support contrary

findings.” Harris, 252 N.C. App. at 108. We review the ALJ’s findings of fact and

conclusions of law based on their substance rather than their label. See Watlington

v. Dep’t of Soc. Servs. of Rockingham Cnty, 261 N.C. App. 760, 768 (2018) (quoting In

re Simpson, 211 N.C. App. 483, 487-88 (2011)) (“When this Court determines that

findings of fact and conclusions of law have been mislabeled by the trial court, we

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may reclassify them, where necessary, before applying our standard of review.”).

“Generally, any determination requiring the exercise of judgment or the application

of legal principles is more properly classified a conclusion of law. Any determination

made by logical reasoning from the evidentiary facts, however, is more properly

classified a finding of fact.” Simpson, 211 N.C. App. at 487. (marks and citation

omitted).

The ALJ “need not recite all of the evidentiary facts but must find those

material and ultimate facts from which it can be determined whether the findings

are supported by the evidence and whether they support the conclusions of law

reached.” See Rittelmeyer v. Univ. of N.C. at Chapel Hill, 252 N.C. App. 340, 350-51,

disc. rev. denied, 370 N.C. 67 (2017); see, e.g., Ayers II, 279 N.C. App. at 523-27

(remanding based on the lack of findings and evidence of the necessary resulting

harm factor). An ultimate finding is a finding supported by other evidentiary facts

reached by natural reasoning. In re G.C., 384 N.C. 62 67 (2023). “A . . . finding of an

ultimate fact is conclusive on appeal if the evidentiary facts reasonably support the

[tribunal’s] ultimate finding.” State v. Fuller, 376 N.C. 862, 864 (2021). Likewise,

evidentiary facts are conclusive on appeal if supported by substantial evidence in the

record or unchallenged by the parties. In re Berman, 245 N.C. 612, 616-17 (1957)

(“The administrative findings of fact . . . if supported by competent, material and

substantial evidence in view of the entire record, are conclusive upon a reviewing

court, and not within the scope of its reviewing powers.”); Brewington, 254 N.C. App.

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1, 17 (2017), disc. rev. denied, 371 N.C. 343 (2018) (quoting Koufman v. Koufman, 330

N.C. 93, 97 (1991)) (“Where no exception is taken to a finding of fact . . ., the finding

is presumed to be supported by competent evidence and is binding on appeal.”).

We need not review every challenged finding of fact, only those necessary “to

determine whether the ALJ properly ruled that [DSS] [failed to] establish[] by a

preponderance of the evidence that [it] had just cause to terminate [Ayers’s]

employment[.]” See Blackburn v. N.C. Dep’t of Pub. Safety, 246 N.C. App. 196, 210,

disc. rev. denied, 368 N.C. 919 (2016).

B. ALJ and Appellate Court Just Cause Review

State employees in North Carolina enjoy legislatively-enacted career

protections. Among these is that no career State employee “shall be discharged,

suspended, or demoted for disciplinary reasons, except for just cause.” N.C.G.S. §

126-35 (2023). “This Section establishes a condition precedent that must be fulfilled

by the employer before disciplinary actions are taken.” Brown v. Fayetteville State

Univ., 269 N.C. App. 122, 130 (2020) (emphasis added) (marks omitted). This is true

for every career State employee, and one’s “position as a supervis[or] . . . does not

lower the standard that must be met in order to justify his dismissal.” Whitehurst v.

E. Carolina Univ., 257 N.C. App. 938, 948 (2018).

An employee who believes she was disciplined without just cause may pursue

a grievance. Under the grievance procedure, she is entitled to an informal final

agency decision that specifically sets forth the basis for her dismissal. N.C.G.S. §

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126-34.01 (2023). She may appeal that decision to the OAH “as a contested case

pursuant to the method provided in [N.C.G.S.] § 126-34.02” and N.C.G.S. § 150B-22

et seq. Harris, 252 N.C. App. at 98. On appeal to the OAH, the agency must show

just cause by a preponderance of the evidence, N.C.G.S. § 150B-25.1(c) (2023),3 and

the “ALJ is free to substitute their judgment for that of the agency regarding the legal

conclusion of whether just cause existed for the agency’s action.” Harris, 252 N.C.

App. at 102. The ALJ enters a final decision, specifying findings of fact and

conclusions of law, N.C.G.S. § 150B-34(a) (2023), and may reinstate the employee and

award back pay and attorneys’ fees as appropriate “without regard to the initial

agency’s determination.” Harris, 252 N.C. App. at 102; see N.C.G.S. § 126-34.02(a),

(e) (2023). A party may appeal the ALJ’s final decision directly to this Court, N.C.G.S.

§§ 7A-29(a), 126-34.02(a) (2023),4 and we review the existence of just cause de novo.

Wetherington II, 270 N.C. App. at 190.

Just cause may be based on either unsatisfactory job performance or UPC. 25

N.C.A.C. 1J.0604(b) (2023). DSS alleges Ayers’s conduct met three grounds of UPC,

as enumerated in the North Carolina Administrative Code:

3 Specifically, the statute reads, “[t]he burden of showing by a preponderance of the evidence

that a career State employee subject to Chapter 126 of the General Statutes was discharged,

suspended, or demoted for just cause rests with the agency employer.” N.C.G.S. § 150B-25.1(c) (2023).

Despite the clarity of this language, DSS, at times, misapprehends the burden of proof, stating,

“Respondent contends Petitioner failed to meet her burden of proving Respondent acted without ‘just

cause’ in terminating her employment.”

4 Previously appeal was to the Superior Court, as governed by N.C.G.S. § 150B-43. See

N.C.G.S. § 126-37(b2) (2012). Hence, some cases refer to the reviewing court as the “trial court.” E.g.,

Carroll, 358 N.C. at 660 (“[T]he trial court applies the whole record test . . . .”).

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(a) conduct for which no reasonable person should expect

to receive prior warning;

...

(d) the willful violation of known or written work rules;

(e) conduct unbecoming a [S]tate employee that is

detrimental to [S]tate service . . . .

See 25 N.C.A.C. 1J.0614(8)(a), (d)-(e) (2023).

Whether an agency has just cause to discipline an employee based on UPC

requires three inquiries:

[t]he proper analytical approach is to first determine

whether the employee engaged in the conduct the employer

alleges. The second inquiry is whether the employee’s

conduct falls within one of the categories of [UPC] provided

by the Administrative Code. [UPC] does not necessarily

establish just cause for all types of discipline. If the

employee’s act qualifies as a type of unacceptable conduct,

the tribunal proceeds to the third inquiry: whether that

misconduct amounted to just cause for the disciplinary

action taken. Just cause must be determined based upon

an examination of the facts and circumstances of each

individual case.

Warren I, 221 N.C. App. at 383. The ALJ concluded—and Ayers does not contest in

this appeal—that Ayers’s use of a racial epithet was UPC under all three of DSS’s

alleged examples under the North Carolina Administrative Code. Ayers II, 279 N.C.

App. at 519. Accordingly, we consider the third inquiry: whether DSS has proven by

the preponderance of the evidence that Ayers’s UPC amounts to just cause to dismiss

her. We conclude DSS did not meet its burden.

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C. The Just Cause Framework

“Whether conduct constitutes just cause for the disciplinary action taken is a

question of law we review de novo.” Warren I, 221 N.C. App. at 378. “Just cause, like

justice itself, is not susceptible of precise definition. It is a flexible concept,

embodying notions of equity and fairness[.]” Carroll, 358 N.C. at 669 (marks and

citations omitted). “Inevitably, [the just cause] inquiry requires an irreducible act of

judgment that cannot always be satisfied by the mechanical application of rules and

regulations.” Id. Rather, “public agency decision-makers must use discretion in

determining what disciplinary action to impose in situations involving alleged

unacceptable personal conduct[.]” Brewington, 254 N.C. App. at 25 (characterizing

this as the “primary holding” of Wetherington I, 368 N.C. at 593); see also Warren I,

221 N.C. App. at 382 (“[N]ot every instance of unacceptable personal conduct as

defined by the Administrative Code provides just cause for discipline.”).

Accordingly, “[a] formulaic approach” “comparing the misconduct in this case

to the misconduct in . . . cases in which our appellate courts have held just cause for

dismissal existed . . . is unpersuasive, as just cause ‘. . . can only be determined upon

an examination of the facts and circumstances of each individual case.’” Watlington,

261 N.C. App. at 770 (quoting Carroll, 358 N.C. at 669). However, we look to

precedent to guide our application of the facts and circumstances of each individual

case: consideration of “factors such as the severity of the violation, the subject matter

involved, the resulting harm, the [employee’s] work history, [and] discipline imposed

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in other cases involving similar violations . . . is an appropriate and necessary

component of a decision to impose discipline upon a career State employee for

unacceptable personal conduct[,]” Wetherington I, 368 N.C. at 592, to “the extent

there was any evidence to support them. [The disciplining agency] [can]not rely on

one factor while ignoring the others.” Wetherington II, 270 N.C. App. at 190. Where

the agency ignores a required factor—or purports to consider it but actually applies

a per se rule—we will not give the agency an additional “bite[] at the apple” to

consider the factor, so long as the record permits our meaningful de novo review of

the factor.5 Compare Wetherington II, 270 N.C. App. at 191-201 (disallowing further

discretionary factfinding despite the agency’s failure to consider “severity of the

violation,” “resulting harm,” and “discipline imposed in other cases involving similar

violations” factors), with Ayers II, 279 N.C. App. at 523-27 (remanding based on our

inability to meaningfully review the “resulting harm” factor).

In Wetherington II, we separately analyzed each of the five Wetherington

factors. Wetherington II, 270 N.C. App. at 191-200. There, the petitioner,

then a trooper with the North Carolina State Highway

Patrol, misplaced his hat during a traffic stop; he then lied

about how he lost his hat, which was later recovered,

mostly intact. [The highway patrol] terminated [his]

employment as a trooper based upon its “per se” rule that

any untruthfulness by a state trooper is unacceptable

personal conduct and just cause for dismissal.

5 In contrast, where an incomplete investigation frustrates our meaningful de novo review of

a required factor, we remand for further investigation, as we did in DSS’s prior appeal. Ayers II, 279

N.C. App. at 523-27.

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Id. at 162. On the trooper’s initial appeal, our Supreme Court held the patrol’s “use

of a rule requiring dismissal for all violations of the [p]atrol’s truthfulness policy was

an error of law”6 and remanded for the patrol to make a proper just cause analysis.

Wetherington I, 368 N.C. at 593. On remand, the patrol affirmed its termination of

the trooper. On appeal from that determination, we held the patrol’s second

consideration “was substantively no different” than its prior application of a per se

rule and “conclude[d] as a matter of law, on de novo review, that [the trooper’s]

unacceptable personal conduct was not just cause for dismissal.” Wetherington II,

270 N.C. App. at 163, 199.

Here, DSS likewise failed to undertake a proper just cause analysis initially.

Ayers II, 279 N.C. App. at 523-25. On remand, DSS again considered the UNC School

of Government twelve-factor test, see id. at 516-17, 524, but did so “along with the

five Wetherington factors.” Although Wetherington I’s recognition of the “flexible

definition of just cause” and description of “factors such as” the five it explicitly

addressed contemplates that additional factors may sometimes be relevant to just

cause, Wetherington I, 368 N.C. at 591-92 (emphasis added) (marks omitted), DSS

makes no argument that the twelve factors of the UNC School of Government were

either appropriate or necessary to its analysis of just cause here. We believe the

6 Thus, the law is no longer—as DSS seeks to rely—that “[o]ne act of UPC presents ‘just cause’

for any discipline, up to and including dismissal.” Hilliard v. N.C. Dep’t of Corr., 173 N.C. App. 594,

597 (2005).

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Wetherington factors are sufficient for us to analyze de novo whether Ayers’s conduct

constituted just cause for her termination, so we do not consider the twelve-factor

test.

D. Analyzing the Just Cause Factors

Having discussed the just cause framework, we turn to whether DSS had just

cause to dismiss Ayers. Before analyzing the appropriate and necessary factors,

however, we address generally DSS’s challenges to findings of fact. DSS purports7 to

challenge 39 of 139 findings of fact and 28 of 52 conclusions of law—several of which,

in actuality, are findings of fact, see Watlington, 261 N.C. App. at 768—as

unsupported by substantial evidence. These challenges, as well as DSS’s discussion

of resulting harm, frequently highlight how Hurd’s version of the facts in DSS’s Final

Agency Decision Addendum differ from the ALJ’s findings. This approach is

unpersuasive because the ALJ “was not obligated to find facts based on” a party’s

“own view of the record,” Brewington, 254 N.C. App. at 23, and because “we defer to

the ALJ’s findings of fact, even if evidence was presented to support contrary findings.”

Harris, 252 N.C. App. at 108 (emphasis added).

We turn to our just cause analysis and consider each of the “appropriate and

necessary” factors in turn. Wetherington I, 368 N.C. at 592. In doing so, we address

7 DSS does not specifically argue nine of these findings.

See Brewington, 254 N.C. App. at 17

(“[B]ecause finding of fact 11 is the only finding that [the petitioner] challenges with a specific

argument, issues concerning the remaining challenged findings have been abandoned.”).

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specific challenged findings of fact as necessary. See Wetherington II, 270 N.C. App.

at 178 n. 8.

1. Severity of the Violation

We first address the severity of Ayers’s UPC. Since our Administrative Code

defines UPC flexibly such that “there is no bright line test to determine whether an

employee’s conduct establishes [UPC,]” Carroll, 358 N.C. at 675; see 25 N.C.A.C.

1J.0614(8) (2023), we cannot pragmatically assess Ayers’s UPC against some baseline

violation. See Watlington, 261 N.C. App. at 770 (marks omitted) (“[C]omparing the

misconduct in this case to the misconduct in . . . cases in which our appellate courts

have held just cause for dismissal existed . . . is unpersuasive, as just cause . . . can

only be determined upon an examination of the facts and circumstances of each

individual case.”). Rather, for this factor, we examine the potential harmfulness and

frequency of Ayers’s UPC. See id. at 770-71 (considering potential harm and the

frequency of the petitioner’s misconduct, albeit without explicitly discussing the

Wetherington factors); accord Davis v. N.C. Dep’t Health & Hum. Servs., 269 N.C.

App. 109 (2019) (unpublished) (“[T]he potential for harm does speak to the severity

of the violation.”).

In Wetherington II, our severity analysis discussed the context and effects of

the trooper’s UPC in a manner that, at first, appears duplicative of the “subject

matter involved” and “resulting harm” factors, but actually suggests a potential harm

inquiry. We said that the trooper’s “untruthful statement regarding losing his hat

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was not a severe violation of the truthfulness policy” because “[i]t did not occur in

court and it did not affect any investigation, prosecution, or the function of the

Highway Patrol”; rather, it “was about a matter . . . all parties concede was not very

important.” Wetherington II, 270 N.C. App. at 191. Thus, our discussion connected

the lie’s out-of-court context to its lack of effects on patrol’s investigatory and

prosecutorial functions. In this light, any apparent redundancy between this factor

and “resulting harm” merely reflected that the particular circumstances created

minimal, if any, potential harm.

In Wetherington II’s severity analysis, we further considered the isolated

nature of the trooper’s UPC. Specifically, the trooper’s conduct was not “an elaborate

lie full of fabricated details” but rather contained only a singular fabricated detail:

“the lie or ‘untruth’ lay only in the hat’s location when [the trooper] misplaced it.”

Wetherington II, 270 N.C. App. at 191-92. Conversely, in Watlington v. Department

of Social Services of Rockingham County, we considered that the frequency of the

dismissed employee’s UPC displayed a “repeated inclination” to engage in it.

Watlington, 261 N.C. App. at 770-71 (considering the employee’s five instances of

exchanging gifts with social services clients).

Here, the ALJ concluded “[t]he preponderance of evidence proved there was

only a minimal degree of potential risk that Petitioner’s racial comment could or

would have affected [] Respondent’s integrity, employee morale, or provision of

services.” DSS points to several unavailing bases for potential harm. Primarily, it

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argues it has shown “widespread potential harm” in that its continued employment

of Ayers would reflect poorly on Hurd’s “credibility and trust” in the eyes of the county

board of social services. See N.C.G.S. §§ 108A-1 to -11 (2023). DSS grounds this

argument in the Addendum, but the ALJ made no findings of fact that reflect how

Ayers’s UPC could have affected Hurd’s individual reputation in the eyes of the board.

See Harris, 252 N.C. App. at 100. Regardless—as consistent with the ALJ’s final

decision—we do not see how an adverse reflection on Hurd’s individual reputation, if

any, based solely on Hurd’s own assertions, created any potential to undermine the

mission of DSS or is otherwise relevant to whether DSS had just cause to dismiss

Ayers.

DSS further posits that “Petitioner’s UPC exposed DSS to vulnerability for

negligent retention and supervision liability” and “violated DSS’s compliance with

the Civil Rights Act of 1964[,]” see 42 U.S.C. § 2000d, et seq., which “could jeopardize

the receipt of federal funding.” The ALJ found,

123. While [] Hurd and Respondent claim that Petitioner

violated various policies that Respondent is required to

follow, [] Hurd and Respondent failed to demonstrate how

Petitioner violated any of these policies when she

spontaneously uttered a racial slur in a vacant office to her

supervisor. . . .

DSS argues this finding is contrary to several portions of the record: the policies

themselves, Hurd’s testimony, the Addendum, and Sutton’s testimony. But none of

this evidence demonstrates how DSS’s usage of non-dismissal forms of discipline to

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address Ayers’s UPC would have subjected the agency to tort liability or violated

federal law.

Despite this lack of identifiable liability, Ayers’s conduct carried a risk of

significant potential harm, albeit a relatively low risk of that harm coming to pass.

Ayers’s use of a racial slur in an office, with the door open, created the possibility that

her subordinate employees or a client in the building might have overheard the

language. And the impact of such a slur having been heard was potentially great;

Sutton testified that merely learning of Ayers’s “inappropriate, disrespectful, and

belittling” words after-the-fact adversely affected her professional relationship with

Ayers, undermined Ayers’s supervisory authority, and was inconsistent with DSS’s

core values. This conduct, if exposed to a subordinate or client, “would have affected

[] Respondent’s integrity, employee morale, [and the] provision of services,” not only

by virtue of the morale impact on any listeners who have been personally affected by

the slur, but also by severely undermining confidence that DSS’s employees were

discharging their duties in a manner that upheld the dignitary equality of all persons,

regardless of race.

However, our “severity of the violation” inquiry does not end there. While

gravity of the harm, had it come to pass, speaks to the severity of the conduct, “that

Petitioner’s conduct . . . was an aberrant and unintended event” mitigates this

severity. The ALJ found,

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139. The preponderance of the evidence established that

Petitioner’s conduct on [3 November 2017] was an aberrant

and unintended event. There was no evidence that

Petitioner acted maliciously, with any racially-motivated

reason or with any racially motivated intent to offend,

harass, or belittle any given ethnicity, race, or anyone with

whom she worked. Instead, the evidence proved that

Petitioner’s statement was a careless mistake and a

“momentary lapse in judgment” by a highly effective and

professional employee.

This finding is best characterized as an ultimate fact, and it is reasoned from ample

evidentiary facts; in particular, those reflecting that Ayers has not otherwise made

inappropriate remarks and expressed immediate and consistent embarrassment,

regret, and remorse:

35. Petitioner immediately regretted her statement, told []

Hurd that she could not believe she had said that, and

apologized to [] Hurd.

....

37. Shortly after Petitioner made the above-described

statement, Petitioner and [] Hurd left the vacant office to

locate the file for the “F” family. On the way, Petitioner

apologized to [] Hurd again and said something like, Please

don’t tell anyone about what I said, especially the first part.

It’s Friday.” Petitioner made this request because she was

embarrassed and surprised by what she had said.

....

45. [After the 6 November 2017 pre-disciplinary

conference], Petitioner apologized and told [] Hurd:

It was [an] inappropriate comment . . . It was

a guess. It was words [that] just came out of

her mouth. I shocked myself. I apologize. I

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don’t use these words in my personal life, my

work life. I don’t allow this in staffing. We

were solving a ‘word problem.’ I apologize for

me and to you. These comments were not to

the family - I think not it means ‘non-

reported.’ It was in a vacant office. It is

inappropriate.

....

60. At the 2018 Hearing, Petitioner admitted she

“absolutely said something that’s improper.” “I’m still

embarrassed by that.” “I apologize for making that

comment. I know the comment was unacceptable. It would

be unacceptable in any setting, personal or professional.”

61. She “had never made an off-color remark like that

before in her [[] Hurd’s] presence or anyone else’s presence,

at work or even my personal life.”

....

114. . . . . The evidence at both the initial hearing and at

the reconvened hearing showed without question that

Petitioner was remorseful about making a racial comment

during the [i]ncident, . . . . Respondent failed to present

any credible evidence to rebut those facts.

....

124. . . . A preponderance of the evidence showed that

Petitioner demonstrated introspection regarding her

conduct in the [i]ncident, both immediately following the

[i]ncident, throughout the local administrative processes,

during the 2018 Hearing, and during the 2022 Hearing.

....

128. Despite the passage of over four and one-half years

between the [i]ncident and the 2022 Hearing, Respondent

presented no evidence of any form of unprofessional

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conduct by Petitioner in any setting other than during the

[3 November 2017] [i]ncident.

129. Petitioner consistently expressed regret and

embarrassment about the incident in her conversations

with and written submissions to [] Hurd following the

[i]ncident.

130. While testifying before the Undersigned on two

separate occasions, several years apart, Petitioner has

consistently demonstrated that she regrets and is

embarrassed by her conduct from the [i]ncident.

In other words, although the harm itself may have been great under different

circumstances, we cannot ignore the ALJ’s findings that the circumstances

themselves, including the time of day and volume of potential listeners in the

building, created a low risk of such a harm actually coming to pass and were

uncharacteristic of Ayers’s past and future behavior relative to the incident.

DSS seeks to resist finding of fact 139 by challenging each of the above findings

save for number 35. Specifically, DSS argues that Ayers has not been consistently

remorseful. It acknowledges that several “findings imply Petitioner has in all ways

been remorseful and taken responsibility for her egregious utterance” but adds that,

“[n]otwithstanding the ALJ’s discretion to [determine] matters of credibility, the

record does not bear this out.” However, several of the findings quoted above directly

quote the evidence that “bears out” Ayers’s remorse and acceptance of responsibility.

DSS also argues we cannot “ignore . . . DSS’s repeated findings and conclusions

made throughout DSS’s investigation that Ayers showed no remorse and did not take

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responsibility.” But it was the ALJ’s prerogative to assess the credibility and weight

of DSS’s investigatory findings. See Harris, 252 N.C. App. at 100. Moreover, the ALJ

found Ayers’s statements during DSS’s investigation were “reasonably attributable

to Petitioner’s concern that [] Hurd had already made her decision about the

[i]ncident” and that, “if she provided any more testimony about the [i]ncident, [] Hurd

would just ‘pick it apart and . . . make a deal out of that too.’” We hold the ALJ’s

ultimate fact 139 is properly reasoned from evidentiary facts, which in turn are

supported by substantial evidence in the record.

Accordingly, the ALJ’s finding and conclusion that Ayers’s UPC was “an

aberrant and unintended event” rather than a pattern of misconduct mitigates the

severity of Ayers’s UPC. Nevertheless, we reiterate that Ayers’s UPC carried a risk

of significant potential harm.

2. Subject Matter Involved

Turning to the subject matter involved, DSS does not identify the subject

matter, arguing only “[t]here is no dispute . . . that the subject matter is most serious.”

Ayers, meanwhile, identifies the subject matter as “improper language[.]” However,

the subject matter is best identified as the meaning of “NR” in the race field on DSS’s

intake form.

In Wetherington II, we considered the subject matter to be, trivially, “the loss

of the hat”; that is, the object of the trooper’s lie and not dishonesty generally.

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Wetherington II, 270 N.C. App. at 192. Likewise, here, we consider the object of

Ayers’s racial slur. The ALJ found this was the meaning of “NR”:

115. . . . Petitioner was only answering Hurd’s question

regarding what did the letters “NR” mean. Given those

facts, there was no proof that Petitioner was referring to

the specific family listed on the form when she blurted out

her racial comment.

Again, pointing to the Addendum, DSS contends that Ayers intended her slur to

describe the family listed on the DSS form. However, the ALJ credited Ayers’s

contrary testimony that she was not referencing the family but “trying to decipher

the race code.” Undeterred by this evidence, DSS makes a conclusory argument that,

“Ayers’[s] own testimony on these issues does not and cannot amount to ‘substantial

evidence.’” But it is well established that “the probative value of particular testimony

[is] for the [ALJ] to determine, and [the ALJ] may accept [or reject] . . . the testimony

of any witness.” Harris, 252 N.C. App. at 100 (second and third alterations in

original).

Accepting finding of fact 115, this subject matter is not any person or family,

mitigating its seriousness. However, we are also cognizant that, in light of the form’s

coding being used as a racial demarcation, the subject matter and decision to use the

epithet carries an irretractable gravity, even when not referring to a particular

person or family. Thus, the mitigation on this factor is, ultimately, only partial.

3. Resulting Harm

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We proceed to “resulting harm.” In Ayers II, we considered the factor as “harm

to DSS” and held DSS had only considered “the potential for harm to the reputation

of, and workers at, DSS[.]” Ayers II, 279 N.C. App. at 525. Thus, we “remand[ed] to

the ALJ with instructions to remand to DSS” to investigate resulting harm to DSS.

Id. at 527. Unsurprisingly, on this appeal, the parties devote the bulk of their

arguments to this factor and related factual issues.

DSS identifies several bases for resulting harm. Specifically, DSS points to the

disruption caused by Ayers’s mandated absence, legal fees incurred by DSS in

defending Ayers’s dismissal, harmful rumors of Ayers’s UPC upon her absence,

Ayers’s frustration of policies, Hurd’s diminished trust in Ayers, and Hurd’s personal

offense upon hearing Ayers’s UPC. Although DSS contends that “[Hurd], within her

discretion, determined that there was irreparable harm to DSS. . . . . [Her]

determination that harm resulted was a sufficient exercise of that discretion[,]” an

agency’s discretion does not permit it to classify any and all harm as “resulting

harm.”8 See Wetherington II, 270 N.C. App. at 194 (rejecting the highway patrol

supervisor’s discussion of potential harm as a basis for resulting harm). Thus, we do

not defer to Hurd’s determinations of harm but, rather, consider the ALJ’s findings

related to each of DSS’s proposed bases of resulting harm.

8 In Ayers II, we rejected DSS’s similar argument that its discretion permitted it to ignore the

“resulting harm” factor entirely. Ayers II, 279 N.C. App. at 524-25.

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The ALJ ultimately found each basis for resulting harm either resulted from

the discipline itself or was not factually supported:

113. In the Final Agency Decision Addendum, [] Hurd

characterized several matters as actual harm purportedly

resulting from the [i]ncident. However, these matters are

all either descriptions of potential harm or resulted from []

Hurd’s decision to dismiss Petitioner and were not caused

by or the result of the [i]ncident itself.

....

133. After conducting an investigation specifically to

determine whether the agency suffered any actual harm

resulting from the [i]ncident, [] Hurd was unable to show

that the agency suffered any actual harm. However, []

Hurd tried to portray the potential for harm as actual harm

even though much of the potential harm was speculative,

based only on her subjective belief, or is contrary to or

otherwise refuted by the passage of nearly five (5) years

since [] Hurd dismissed Petitioner.

We agree with the ALJ’s legal conclusion that “potential harm [and matters]

result[ing] from [] Hurd’s decision to dismiss Petitioner” are not resulting harm. See

Wetherington I, 368 N.C. at 592; Wetherington II, 270 N.C. App. at 194-95. Further,

we consider the ALJ’s findings and conclusions to the effect that DSS has not

otherwise shown resulting harm are best classified as ultimate findings of fact. Thus,

for each of DSS’s bases, we inquire whether DSS may fairly characterize it as

resulting harm; and, if so, we further consider whether the ALJ’s ultimate finding

that the basis lacks factual support was appropriately reasoned from evidentiary

findings supported by substantial evidence.

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a. Ayers’s Absence and DSS’s Legal Expenses

We have previously distinguished between resulting harm and mere potential

harm. E.g., Wetherington II, 270 N.C. App. at 194-95. This case requires us to further

distinguish between the harm proximately resulting from the UPC and that resulting

ipso facto from an agency’s imposition of discipline. When an agency disciplines an

employee for UPC, we inquire “whether that misconduct amounted to just cause for

the disciplinary action taken.” Warren I, 221 N.C. App. at 383 (emphasis added). Any

harm resulting from the discipline had not yet resulted when the agency was required

to determine whether just cause existed for the discipline.9 See Brown, 269 N.C. App.

at 128-32 (adopting the U.S. Supreme Court’s reasoning that “after-acquired evidence

. . . could not serve as a valid justification for upholding the employee’s termination

because the employer did not know [this evidence] until after she was discharged”

and applying it to contested cases brought by career State employees).10

DSS’s proposed bases for resulting harm illustrate this point. DSS argues

Ayers’s UPC “interrupted [Hurd’s] normal duties and require[ed] others to pick up

her workflow” and notes “[t]he [Final Agency Decision] Addendum also addressed

the actual harm to DSS’s budget[.]” However, it does not challenge that “any

9 DSS argues that some harm—specifically employee resignations—might have resulted had

it not terminated petitioner. We decline to speculate what harm would and would not have resulted

had DSS opted for a non-dismissal form of discipline.

10 Brown further held “this type of evidence could be used to limit the employee’s relief[,]” at

least where the evidence creates an independent and lawful basis for the termination. Brown, 269

N.C. App. at 128. DSS does not ask us to limit Ayers’s relief should we conclude it lacked just cause.

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interruption of [] Hurd’s duties, other staff’s duties, or workflow at DSS was not due

to the [i]ncident itself . . . [but rather] resulted from [] Hurd’s decision to place

Petitioner on leave and Petitioner’s resulting absence from the agency after [] Hurd

dismissed Petitioner.”

These bases seek to use of the fact of Ayers’s dismissal to justify the dismissal,

but “[f]airness and equity do not allow just cause for dismissal to be predicated upon”

the dismissal itself. Cf. Whitehurst, 257 N.C. App. at 947 (“Fairness and equity do

not allow just cause for dismissal to be predicated upon [the petitioner’s] failure to

respond appropriately to facts of which he had no knowledge.”). Rather, this

circularity “is functionally indistinguishable from [a rule of] ‘per se’ dismissal[.]”

Wetherington II, 270 N.C. App. at 191. A contrary holding would place disciplined

State employees in a Catch-22, as an exercise of their right to appeal, see N.C.G.S. §§

126-34.01 to -.02 (2023), would subject the agency to legal expenses and potentially

tip the scales in favor of just cause, even where none had existed prior.11

b. Rumors of Ayers’s UPC

DSS also points to harm to Sutton upon learning of rumors of Ayers’s UPC as

a basis for resulting harm. Learning of Ayers’s words “disappointed and shocked”

11 Such a result could raise due process implications as well.

Brewington, 254 N.C. App. at 27-

28 (“It is well established that career State employees enjoy a property interest in continued

employment. This property interest is created by state law, N.C.[G.S.] § 126-35(a), and is guaranteed

by the Due Process Clauses of the Fifth and the Fourteenth Amendments to the United States

Constitution.”).

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Opinion of the Court

Sutton, and she understandably considered them “inappropriate, disrespectful, and

belittling.” However, Sutton did not witness Ayers’s UPC and only learned of it

because of Ayers’s absence from work after her dismissal. The dismissal itself

required DSS have just cause. N.C.G.S. § 126-35 (2023). DSS could not have relied

upon after-the-fact office gossip as potential harm—realized only after the

dismissal—as “resulting harm” to show just cause for the dismissal. Brown, 269 N.C.

App. at 128-32.12

c. Frustration of Policies

12 DSS fairly notes, “[r]egardless of when or how she learned of the conduct, Sutton was

harmed.” Consistent with the “flexible concept” of just cause, Carroll, 358 N.C. at 669, we do not ignore

this but have more appropriately considered it as potential harm—not-yet realized when DSS imposed

discipline.

DSS also notes, “[i]t is likely that in many situations, properly investigating the use of racial

slurs to a supervisor, will necessarily result in harm to colleagues who learn of the slurs. As such,

Ayers’[s] use of the slurs, even though it was a single incident and even though she had little prior

discipline, [or, more accurately, no prior discipline,] constitutes good cause for dismissal.” DSS,

elsewhere, argues, “[it] cannot possibly be the law of North Carolina” that “[Hurd] was required to ask

other social workers whether they also heard the racial slurs” because such an investigation “would

necessarily be causing additional harm to the agency by spreading the vile racist slurs throughout the

agency[.]”

Whether DSS considers such a holding possible or not, we held DSS was required to conduct a

complete investigation, sufficient for the ALJ to make findings of fact regarding resulting harm,

including discerning “whether anyone else heard such statement[.]” Ayers II, 279 N.C. App. at 526

(emphasis omitted). To consider harm caused by or “spread” by an investigation as “resulting harm”

would tie the level of resulting harm to the thoroughness of an agency’s investigation therein. This

would create tension between just cause’s “notions of equity and fairness” and an agency’s discretion

over how to conduct its investigation. See Brewington, 254 N.C. App. at 14, 25.

We are mindful that, if mere knowledge of an employee’s UPC would create harm, and if the

very act of investigating UPC spreads knowledge of the UPC, it could be unavoidable for an agency to

investigate just cause without spreading harm. If and when such cases arise, we trust agencies will

exercise their discretion over their investigations in a manner to minimize that harm. We note, for

example, that Hurd’s transcribed interview of Sutton in this case utilized open-ended questioning that

did not require Hurd to repeat Ayers’s words, not even in redacted fashion.

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AYERS V. CURRITUCK CNTY. DEP’T OF SOC. SERVS.

Opinion of the Court

Another of DSS’s bases for resulting harm is an even more naked application

of a per se rule. DSS argues “[t]he Addendum addressed harm to the DSS’s mission

and work by frustrating the purpose of numerous policies[.]” Although Ayers’s policy

violation was certainly relevant to whether Ayers’s conduct constituted UPC, Ayers

does not contest that prong of Warren. Rather, at this prong, we consider whether

this particular “frustrati[on] of the purpose” of a policy “amounted to just cause for

the disciplinary action taken.” Warren I, 221 N.C. App. at 383. Restating the fact of

the UPC does not advance this inquiry. Further, although Hurd testified that “a

supervisor who disregards policy is harmful because supervisors are intended to be

leaders” at DSS and it is “important that they demonstrate compliance with those

policies personally[,]” Ayers’s position as supervisor or leader “does not lower the

standard that must be met in order to justify [her] dismissal.” See Whitehurst, 257

N.C. App. at 948.

d. Hurd’s Diminished Trust in Ayers

DSS’s remaining bases for resulting harm lack factual support. DSS argues it

showed harm to Hurd in that “Petitioner’s UPC justifiably obliterated [Hurd’s] trust

in Petitioner’s judgment, . . . [and] there was simply no way Petitioner could function

autonomously without total supervision or eliminate the risk of another abhorrent

racial outburst.” Although this reads more like potential harm, it is relevant to just

cause regardless (to the extent it is supported in fact) and we address it here.

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Opinion of the Court

In Wetherington II, we held a supervisor’s unreasonable belief that an

employee would repeat his UPC if permitted to remain in his position is not a proper

basis for resulting harm. There, the trooper’s supervisor claimed in his dismissal

letter to the trooper that

I have no confidence that you can be trusted to be truthful

to your supervisors or even to testify truthfully in court or

at administrative hearings. . . . [Y]our ability to perform

the essential job functions of a Trooper is reparably limited

due to the Highway Patrol’s duty to disclose details of the

internal investigation to prosecutors[.] . . . If you were to

return to duty with the Highway Patrol I could not, in good

conscience, assign you to any position . . . within the

Highway Patrol . . ., any assignment would compromise the

integrity of the Highway Patrol and the ability of the State

to put on credible evidence to prosecute its cases.

Wetherington II, 270 N.C. App. at 165. But while “[i]t [was] easy to understand the

resulting harm to the agency from a trooper’s intentional lie about substantive facts

in sworn testimony or in the course of his official duties[,]” the trooper had made no

lie of that sort, and the highway patrol “ha[d] never been able to articulate how this

particular lie was so harmful.” Id. at 195 (emphasis added). Rather, the highway

patrol’s analysis was “substantively no different” than a per se rule because any “sort

of untruthfulness, in any context” would have permitted dismissal under the highway

patrol’s reasoning. Id. at 195, 199.

Under Wetherington II, Hurd and DSS could not reasonably presume Ayers’s

one instance of UPC meant she would have a future “racial outburst” in the manner

that the highway patrol assumed the trooper’s single lie meant he would have

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Opinion of the Court

perjured himself given the opportunity; they needed some reasonable ground for the

belief. As DSS notes, Hurd was simultaneously the sole witness, “principal

investigator,” and administer of discipline, making this basis for harm wholly

dependent on the reasonableness of her individual belief. However, the ALJ found

this belief to be unreasonable:

114. [] Hurd subjectively believed that Petitioner was not

fit to be entrusted with her supervisory or other duties for

Currituck DSS and claimed this belief constituted “harm”

resulting from the [i]ncident. However, Hurd’s subjective

belief was unsubstantiated, speculative, and unreasonable.

[] Hurd’s subjective opinion on these matters was not

supported by a preponderance of the evidence and was

contrary to other evidence in the record. The evidence at

both the initial hearing and at the reconvened hearing

showed without question that Petitioner was remorseful

about making a racial comment during the [i]ncident, that

Petitioner’s comment was uncharacteristic of her, and that

there was no reasonable expectation or likelihood that

Petitioner would repeat such comment. Respondent failed

to present any credible evidence to rebut those facts.

On the other hand, the ALJ expressly found, based on supporting evidence on the

record, “Hurd’s decision to dismiss Petitioner from employment was influenced by []

Hurd’s past philosophical differences with Petitioner and their past history.”

These findings were amply reasoned from unchallenged findings of fact that

reflect the “friction[,]” and “difficult but professional relationship[,]” and “significant

philosophical differences” between Hurd and Ayers. Indeed, DSS admits that Hurd

relied, in part, on these “prior difficulties” to determine “there was irreparable harm

to DSS[.]” Further, Romm—the former DSS director over both employees—“did not

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Opinion of the Court

think [Ayers’s] conduct on [3 November 2017] was typical or characteristic of [her]

behavior” and had no “doubts or concerns about [her] fitness to be a supervisor at []

DSS[,]” despite her UPC.

DSS further challenges finding of fact 114 based on its opinions that Ayers was

not remorseful and had a “racist upbringing[.]” But the ALJ’s findings reflect neither

of these, and any evidence in support of its opinions does not preclude the ALJ’s

findings to the contrary. See Harris, 252 N.C. App. at 108.

e. Hurd’s Personal Offense

DSS’s last basis of resulting harm is that “[h]earing the statement harmed

[Hurd’s] morale, who considered it highly offensive, vulgar, crude, and

discriminatory.” The ALJ found “Respondent presented no evidence . . . that

Petitioner’s comment during the [3 November 2017] [i]ncident affected . . . the morale

of any DSS employees . . . . [T]he [i]ncident did not affect . . . the morale of any

employee[.]” Citing a portion of Hurd’s 2018 testimony, DSS argues “[i]t is not true

there was no evidence of it negatively impacting the morale of any DSS employee . . .

Hurd is an employee[] . . . [and] testified to the unsettling effect this had on her.”

However, “the probative value of particular testimony [is] for the [ALJ] to determine,”

id. at 100 (second alteration in original), and we have, in Ayers II, already considered

the effect of this testimony and held Hurd’s consideration that she “thought [Ayers’s

UPC] was extremely offensive and inflammatory” was not consideration of resulting

harm. Ayers II, 279 N.C. App. at 525. We may not revisit our conclusion that Hurd’s

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Opinion of the Court

personal offense was not resulting harm to DSS. Wetherington II, 270 N.C. App. at

172-73 (“According to the doctrine of the law of the case, once an appellate court has

ruled on a question, that decision becomes the law of the case and governs the

question both in subsequent proceedings in a trial court and on subsequent appeal.”).

Having considered each of DSS’s proposed basis for resulting harm, we hold

the ALJ’s ultimate findings that DSS has not shown resulting harm are properly

reasoned from evidentiary facts supported by substantial evidence in the record. The

facts, as the ALJ found based on substantial evidence, do not show that Ayers’s UPC

had caused any resulting harm to DSS, its reputation, its employees, or its ability to

provide services to the public at the time DSS dismissed Ayers. This factor weighs

against the existence of just cause to dismiss Ayers.

4. Ayers’s Work History

Having discussed at length the “resulting harm” factor, we turn to Ayers’s work

history. Analyzing this factor in Whitehurst v. East Carolina University, we

considered both the dismissed employee’s performance reviews and her disciplinary

history. Whitehurst, 257 N.C. App. at 938.

DSS does not challenge the ALJ’s findings related to Ayers’s work history:

10. From 2011 through 2017, [] Romm conducted the

annual evaluations of Petitioner.[] Romm consistently

rated Petitioner as “substantially exceeded” expectations

in all areas and rated Petitioner’s performance as

“Excellent” in all areas. An “Excellent” rating was the

highest possible evaluation rating an employee can receive

in a performance evaluation.

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Opinion of the Court

11. [] Romm never had any concerns about Petitioner’s

professionalism, adherence to policy, attitude, or her work

performance.

12. Until her dismissal, Petitioner had not received any

prior disciplinary action during her employment with

Respondent.

....

132. In the [8 November 2017] termination letter and the

[21 November 2017] Final Agency Decision, [] Hurd

referenced a [21 July 2017] conversation with Petitioner to

show she had placed Petitioner on prior notice that

Petitioner’s conduct towards [] Hurd was inappropriate

and unprofessional. However, the preponderance of the

evidence showed that [] Hurd actually relied upon the [21

July 2017] conversation to show support for, and further

justify, her decision to dismiss Petitioner even though she

never documented her [21 July 2017] conversation with

Petitioner as a disciplinary action. . . . Hurd never issued

any disciplinary action to Petitioner for prior job

performance or conduct deficiencies. [] Hurd never

documented the [21 July 2017] matter in writing or as a

disciplinary action. There was no evidence [] Hurd

documented “many discussions” with Petitioner about any

prior unacceptable conduct.

DSS does not argue we should consider the 21 July 2017 conversation and concedes

Ayers’s work history is “mitigation[.]” As Ayers received consistently excellent

performance reviews and had no prior disciplinary actions, “[t]his factor could only

favor some disciplinary action short of termination.” Wetherington II, 270 N.C. App.

at 196.

5. Discipline Imposed in Other Cases Involving Similar Violations

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Opinion of the Court

We now turn to the final Wetherington factor. DSS argues “[t]he ALJ’s reliance

on the lack of prior DSS discipline for similar conduct is misleading as no employee

had ever used a racial epithet at work before.” To the extent the ALJ considered that

DSS permitted employees to use non-racial profanity in the workplace, we agree with

DSS that this was error. However, this does not end our inquiry into this factor.

Consistent with just cause’s “notions of equity and fairness[,]” Carroll, 358

N.C. at 669, we have characterized this factor as whether “this dismissal was based

upon disparate treatment[.]” Wetherington II, 270 N.C. App. at 198-99. “Similar

violations” are not limited to factually similar UPC; rather, the similar violations only

need “some relevant denominator . . . for comparison.” Id. at 199. “Although there is

no particular time period set for this factor, [there is] no legal basis for relying only

upon disciplinary actions during a particular [director’s] tenure.” Id.

In Warren’s second trip to this Court, we considered a State employee’s

dismissal for a violation of his agency-employer’s policy against unbecoming personal

conduct by driving his patrol vehicle while off duty and with an open bottle of liquor

in the trunk. Warren v. N.C. Dep’t of Crime Control & Pub. Safety (“Warren II”), 267

N.C. App. 503, 506-10 (2019). Under the first two prongs, we held the employee

violated the policy and that the violation was UPC. Id. at 506-08. But, at the third

prong, we held there was no just cause for the employee’s termination, in part because

the disciplinary actions [the] respondent has taken for

unbecoming conduct typically resulted in either: a

temporary suspension without pay, a reduction in pay, or a

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Opinion of the Court

demotion of title. In fact, where the conduct was equally or

more egregious than that of petitioner (i.e., threats to kill

another person, sexual harassment, assault), the employee

was generally subjected to disciplinary measures other

than termination.

Id. at 509.

Here, DSS does not challenge the ALJ’s findings that

21. During Romm’s nineteen years as Director of Currituck

DSS, Romm dismissed three individuals for engaging in

unacceptable personal conduct. Each of these employees

had engaged in either a pattern or a series of unacceptable

personal conduct repeatedly over a period of time. One

employee lied to Romm for months regarding an

unauthorized destruction of case records. A second

employee refused to perform a core duty of her position. []

Romm fired that employee when the employee failed to

perform a second core duty involving the safety of children

and after the supervisor advised the employee of the

serious consequences that could result from her continued

refusal to perform her duties. A third employee falsely

reported, written and verbally, the status of cases over

several months.

22. [] Ro[m]m never terminated anyone for unacceptable

personal conduct based solely on a one-time incident. She

never terminated anyone for unacceptable personal

conduct based on something the employee said in a private

conversation.

....

[Conclusion of law] 46. In this case, it was undisputed that

neither [] Hurd nor [] Romm had encountered a similar

conduct violation at Currituck DSS in the past. Neither []

Hurd nor [] Romm had dismissed any employee based on a

single incident of misconduct in the past. In fact, prior

disciplinary practices at Respondent demonstrated that

dismissal was not ordinarily imposed for a single act of

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Opinion of the Court

misconduct, and generally an employee would only be

dismissed following a warning and repetition of some act of

misconduct.

While we do not compare for all purposes the relative egregiousness of Ayers’s use of

a racial slur to previously dismissed DSS employees’ dishonesty and dereliction of job

duties, we conclude these prior instances of UPC establish the “relevant

denominator[.]” Wetherington II, 270 N.C. App. at 199. DSS has not historically

imposed dismissal as the discipline for an employee’s first instance of UPC. Since

Ayers’s dismissal for a single instance of UPC is contrary to DSS historical practice,

this factor weighs against the existence of just cause to dismiss Ayers.

E. Balancing the Equities

Having analyzed each of the Wetherington factors, we reach the “irreducible

act of judgment[,]” Carroll, 358 N.C. at 669, of whether DSS had just cause to dismiss

Ayers.

DSS implores us to accord deference to its determination of just cause.

Specifically, it argues Hurd “was best positioned to determine the impact of

Petitioner’s misconduct” based on her education and training, as well as in that “[s]he

is of long tenure in that DSS and was selected by her predecessor for her integrity

and judgment[.]” It further argues, “[a]s the supervisor, witness to the slurs, and

principal investigator, [Hurd] had to rely on her judgement [sic] and discretion in

determining whether harm was caused. The ALJ failed to give her sufficient

deference in the challenged Conclusions of Law.” However, “[the ALJ] . . . owe[d] no

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Opinion of the Court

deference to [Hurd’s] conclusion of law that [] just cause existed” and was “free to

substitute [her] judgment for that of [Hurd] regarding the legal conclusion of whether

just cause existed for [DSS’s] action.” Harris, 252 N.C. App. at 102.

We likewise review the ALJ’s legal conclusion de novo. See, e.g., Wetherington

II, 270 N.C. App. at 190. There is no “formulaic approach” for this determination.

See Watlington, 261 N.C. at 770. Although not every Wetherington factor must favor

the existence of just cause for it to exist,13 e.g., id. at 770-72 (determining just cause

existed despite a lack of resulting harm), we may not ignore the absence of factors.

See Wetherington II, 270 N.C. App. at 190 (“[The disciplining agency] could not rely

on one factor while ignoring the others.”)

We hold DSS failed to meet and carry its burden of proving it had just cause to

dismiss Ayers for her UPC. In doing so, we do not “compar[e] the misconduct in this

case to the misconduct in . . . cases in which our appellate courts have held just cause

for dismissal existed” or did not exist, Watlington, 261 N.C. at 770, but hold only

“upon an examination of the facts and circumstances of [this] individual case[,]” as

found by the ALJ and supported by substantial evidence. Carroll, 358 N.C. at 669.

Ayers’s use of a racial slur in the workplace, even when not directed at a particular

person and seemingly without the intent to convey racial animosity, was a severely

unprofessional and insensitive choice. But the ALJ did not, and we cannot, ignore

13 Thus, DSS is correct when it argues “actual harm is not necessary to support a decision to

terminate under the law.”

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Opinion of the Court

the considerable circumstances in mitigation: Ayers immediately and consistently

recognized and regretted the wrongfulness of her conduct, DSS has not shown any

harm had resulted by the time it terminated Ayers, Ayers had an otherwise

unblemished employment history, and DSS has not historically dismissed employes

for a single instance of UPC. In other words, despite the severity and seriousness,

DSS has not established why appropriately addressing Ayers’s UPC required it to

deviate from its historical disciplinary practices where Ayers’s UPC was an aberrant

incident for which she readily accepted responsibility and felt remorse, especially

where no actual harm resulted.

To conclude our just cause analysis, we address one more argument from DSS.

It argues that

to suggest that an agency tasked with protecting minority

children is not harmed when a State employee says the N-

word to her supervisor when trying to determine the race

[of] a family receiving critical services[] is disingenuous to

the equal rights movement and jurisprudence. Discipline

amounting to nothing more than a slap on the wrist is a

slap in the face to that policy and to all people receiving

services therefrom. This [C]ourt should not cosign such

inexplicable leniency and should instead draw a judicial

line in the sand about what is and what is not appropriate

within our governmental agencies.

Reasonable people can disagree about whether “the equal rights movement and

jurisprudence” is best served by DSS’s desired zero-tolerance policy14 or one that

14 DSS acknowledges that “Hurd, by her actions, was setting ‘a very strong zero tolerance

standard[.]’”

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Opinion of the Court

offers those who engage in UPC an opportunity to learn from their mistakes and earn

a second chance. But any “judicial line in the sand” has already been drawn on the

far side of DSS’s preferred option: “the better practice, in keeping with the mandates

of both Chapter 126 and our precedents, [is] to allow for a range of disciplinary actions

in response to an individual act of [UPC], rather than the categorical approach” that

DSS sought to employ. Wetherington I, 368 N.C. at 593 (emphasis added). Since DSS

has not shown just cause to dismiss Ayers for this individual act of UPC, its

disciplinary action must fall elsewhere on this range.

F. ALJ’s Alternative Discipline

We briefly mention the ALJ’s alternative discipline.

Under [N.C.G.S. § 126-34.02(a)(3)], the ALJ has express

statutory authority to “[d]irect other suitable action” upon

a finding that just cause does not exist for the particular

action taken by the agency. Under the ALJ’s de novo

review, the authority to “[d]irect other suitable action”

includes the authority to impose a less severe sanction as

“relief.”

Because the ALJ hears the evidence, determines the

weight and credibility of the evidence, makes findings of

fact, and “balanc[es] the equities,” the ALJ has the

authority under de novo review to impose an alternative

discipline. Upon the ALJ’s determination that the agency

met the first two prongs of the Warren standard, but just

cause does not exist for the particular disciplinary

alternative imposed by the agency, the ALJ may impose an

alternative sanction within the range of allowed

dispositions.

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Opinion of the Court

Harris, 252 N.C. App. at 109 (second, third, and fourth alterations in original); see

N.C.G.S. § 126-34.02(a)(3) (2023).

Here, the ALJ ordered DSS to “retroactively reinstate Petitioner to the same

or similar position she held prior to her dismissal with full back pay, suspend

Petitioner for two weeks without pay, and order Petitioner to attend additional

cultural diversity and racial sensitivity . . . training.” Ayers does not contest that

DSS had just cause to impose this form of discipline, and DSS does not argue it had

just cause for discipline less than dismissal but greater than this alternative. Thus,

the adequacy of this discipline is not before us, and we express no opinion on it.

G. Attorney Fees

We do not reach DSS’s attorney fees argument. Pursuant to its authority, the

ALJ ordered DSS to reimburse Ayers the cost of reasonable attorney fees. See

N.C.G.S. § 126-34.02(e) (2023) (“The Office of Administrative Hearings may award

attorneys’ fees to an employee where reinstatement or back pay is ordered[.]”); see

generally Rouse v. Forsyth Cnty. Dep’t of Soc. Servs., 373 N.C. 400 (2020); see also

Hunt v. N.C. Dep’t of Pub. Safety, 266 N.C. App. 24, 32, disc. rev. denied, 373 N.C. 60

(2019) (“A[n] [ALJ’s] decision to grant attorneys’ fees is discretionary.”). DSS argues

only that we should reverse the ALJ’s award of attorney fees based on the merits.

Since we uphold the ALJ’s decision that Ayers prevails on the merits, we do not reach

this argument. Id.

CONCLUSION

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Opinion of the Court

Reviewing de novo, based on the individual facts and circumstances of this case

as reflected in the ALJ’s findings of fact supported by substantial evidence, we

conclude DSS failed to meet and carry its burden of proving it acted with just cause

to dismiss Ayers. We affirm the ALJ’s final decision.

AFFIRMED.

Judge TYSON concurs in result only.

Judge COLLINS dissents by separate opinion.

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No. COA23-420 – Ayers v. Currituck Cnty. Dep’t of Soc. Servs.

COLLINS, Judge, dissenting.

Petitioner was the supervisor for the Child Protective Services Unit at the

Currituck County Department of Social Services (“DSS”). When responding to an

inquiry from her supervisor, the DSS Director, as to what the racial demarcation

“NR” meant on an intake form that had been completed by a social worker, Petitioner

responded either “nigra rican” or “nigger rican.” Petitioner initially laughed about

the comment but became apologetic and embarrassed soon afterward. The sole issue

before this Court is whether Petitioner’s unacceptable personal conduct amounted to

just cause for her dismissal. Because I believe Petitioner’s unacceptable personal

conduct was just cause for dismissal, I dissent from the majority opinion.

This Court has articulated a three-part analytical approach to determine

whether just cause exists to support a disciplinary action against a career State

employee for alleged unacceptable personal conduct:

The proper analytical approach is to first determine

whether the employee engaged in the conduct the employer

alleges. The second inquiry is whether the employee’s

conduct falls within one of the categories of unacceptable

personal conduct provided by the Administrative Code.

Unacceptable personal conduct does not necessarily

establish just cause for all types of discipline. If the

employee’s act qualifies as a type of unacceptable conduct,

the tribunal proceeds to the third inquiry: whether that

misconduct amounted to just cause for the disciplinary

action taken.

Warren v. N.C. Dep’t of Crime Control & Pub. Safety, 221 N.C. App. 376, 383, 726

S.E.2d 920, 925 (2012).

AYERS V. CURRITUCK CNTY. DEP’T OF SOC. SERVS.

Collins, J., dissenting

Here, there is no question that Petitioner engaged in the misconduct DSS

alleged and that Petitioner’s misconduct falls within one of the categories of

unacceptable personal conduct. The only issue is whether that unacceptable personal

conduct amounted to just cause for her dismissal.

“Just cause must be determined based upon an examination of the facts and

circumstances of each individual case.” Wetherington v. N.C. Dep’t of Pub. Safety, 270

N.C. App. 161, 193, 840 S.E.2d 812, 834 (2020) (quoting N.C. Dep’t of Env’t & Nat.

Res. v. Carroll, 358 N.C. 649, 669, 599 S.E.2d 888, 900 (2004)). In examining the facts

and circumstances of each individual case, an “appropriate and necessary component”

of a decision to impose discipline on a career State employee is the consideration of

certain factors, including: “the severity of the violation, the subject matter involved,

the resulting harm, the [career State employee’s] work history, or discipline imposed

in other cases involving similar violations.” Wetherington v. N.C. Dep’t of Pub. Safety,

368 N.C. 583, 592, 780 S.E.2d 543, 548 (2015).

Taking the first two factors together, the violation is severe precisely because

of the subject matter involved. “Far more than a ‘mere offensive utterance,’ the word

‘nigger’ is pure anathema to African-Americans. ‘Perhaps no single act can more

quickly alter the conditions of employment and create an abusive working

environment than the use of an unambiguously racial epithet such as ‘nigger’ . . . .”

Spriggs v. Diamond Auto Glass, 242 F.3d 179, 185 (4th Cir. 2001) (quoting Rodgers

v. Western-Southern Life Ins. Co., 12 F.3d 668, 675 (7th Cir. 1993)); see Granger v.

2

AYERS V. CURRITUCK CNTY. DEP’T OF SOC. SERVS.

Collins, J., dissenting

Univ. of N.C. at Chapel Hill, 197 N.C. App. 699, 706, 678 S.E.2d 715, 719 (2009)

(quoting Spriggs).

Furthermore, the harm, both resulting15 and potential, was significant.

Petitioner’s conduct eroded the Director’s trust in Petitioner’s motives and judgment.

Petitioner’s conduct also negatively affected her African-American co-worker’s ability

to trust Petitioner’s judgment and accept guidance from Petitioner. Moreover, DSS

has policies prohibiting individuals from using demeaning or inappropriate terms or

epithets and telling off-color jokes concerning race. DSS has a duty to enforce these

policies, and to further its stated goal of supporting parents by respecting each

family’s cultural, racial, ethnic, and religious heritage in their interactions with the

family and the mutual establishment of goals. Finally, Petitioner’s unacceptable

personal conduct exposed DSS to vulnerability for negligent retention and

supervision liability and violated DSS’s compliance with the Civil Rights Act of 1964,

see 42 U.S.C. § 2000d, et seq., which could jeopardize its receipt of federal funding.

There was no evidence in this case of discipline imposed in other cases

involving similar violations in this or similar DSS offices. Thus, the fourth factor

15 “No showing of actual harm is required to satisfy definition (5) of [unacceptable personal

conduct], only a potential detrimental impact (whether conduct like the employee’s could potentially

adversely affect the mission or legitimate interests of the State employer).” Hilliard v. N.C. Dep’t of

Corr., 173 N.C. App. 594, 597, 620 S.E.2d 14, 17 (2005) (citing Eury v. Emp’t Sec. Comm’n, 115 N.C.

App. 590, 610-11, 446 S.E.2d 383, 395-96, disc. review denied, 338 N.C. 309, 451 S.E.2d 635 (1994).

The ALJ’s conclusion in this case that Petitioner’s unacceptable personal misconduct did not cause

Respondent actual harm as a basis for concluding there was no just cause to dismiss Petitioner is

thus erroneous.

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AYERS V. CURRITUCK CNTY. DEP’T OF SOC. SERVS.

Collins, J., dissenting

need not be considered. See Wetherington, 270 N.C. App. at 189-90, 840 S.E.2d at 831

(courts must consider “any factors for which evidence is presented”). Nonetheless,

this case is similar to Granger, wherein an employee was dismissed for uttering a

racial slur to a subordinate. 197 N.C. App. at 706-07, 678 S.E.2d at 719-20 (“By

uttering this epithet in the workplace, where Petitioner was overheard by one of her

subordinates, Petitioner undermined her authority and exposed Respondent to

embarrassment and potential legal liability.”)

Although this appears to have been an isolated incident by Petitioner, a single

act of unacceptable personal conduct can present just cause for any discipline, up to

and including dismissal. See Hilliard, 173 N.C. App. at 597, 620 S.E.2d at 17 (“One

act of [unacceptable personal conduct] presents ‘just cause’ for any discipline, up to

and including dismissal.” (citations omitted)). When the facts and circumstances are

considered together, I believe Petitioner’s unacceptable personal conduct was just

cause for Petitioner’s dismissal. I would thus reverse the ALJ’s decision to award

reinstatement and attorney’s fees and affirm DSS’s decision to terminate Petitioner.

4