Charlotte is considering passing an ordinance that would extend nondiscrimination protections to employees of businesses with 14 or less employees. On July 26, 2021, Charlotte’s City Attorney sent a memo to the Mayor and City Councilmembers outlining this proposed new ordinance.

The proposed ordinance would prohibit discrimination based on “race (including natural hairstyle), sex (including pregnancy, sexual orientation, gender identity and gender expression), gender, religion, national origin, ethnicity, age, familial status, veteran status, and disability.” As opposed to the definition of “employer” under many federal and state antidiscrimination laws which apply to businesses employing 15 or more employees, the proposed Charlotte ordinance would exclusively cover businesses employing 14 or less employees “[t]o address this gap in discrimination protection.”

This ordinance would be administered by the Conciliation Division of Charlotte’s Community Relations Committee. The Conciliation Division would attempt to conciliate any complaints from employees with their employers; however, if the conciliation process fails, the matter would be “referred to the City Attorney for further appropriate action and enforcement” to include “fines and the pursuit of equitable and injunctive relief through the courts to stop the discriminatory practices.”

While employees would not have the right to bring a private civil lawsuit for violation of the ordinance, the ordinance would subject small businesses  to new legal processes, ultimately increasing their risk of liability for alleged discrimination and incurring legal fees for guidance through both the conciliation process and any subsequent suits brought by the City Attorney.

This is the only the latest in a series of nondiscrimination ordinances passed by municipalities in the wake of the sunsetting of House Bill 142, which specifically prohibited local governments from regulating private employment practices until December 1, 2020. Since then, the local governments of Chapel Hill, Carrboro, Durham, Asheville, and Greensboro have passed nondiscrimination ordinances.

The City Attorney’s Memo raises the question of whether Charlotte has the authority to enact the proposed ordinance. In North Carolina, municipalities are entities of limited authority. Article VII, Section 1 of the North Carolina Constitution provides that the General Assembly is responsible for chartering municipalities, and in doing so “may give such powers and duties to counties, cities and towns, and other governmental subdivisions as it may deem advisable.” In other words, cities like Charlotte may only regulate to the extent they have express authority under their Charter. While it is not clear what statute or charter provision Charlotte is relying on as authority for this ordinance, North Carolina’s statutes are clear that its public policy is to extend antidiscrimination protections only to businesses employing 15 or more people. See N.C. Gen. Stat. § 143-422.2(a).

Small businesses in Charlotte and across should keep an eye on this developing issue, which may become a developing trend if adopted in other municipalities across North Carolina.