In July, the State of North Carolina passed a massive, 634-page budget bill that included certain workplace policy provisions worth noting. Specifically, among them is language that reinforces state control over labor and employment regulation while limiting local governments’ ability to influence private-sector labor relations.
The legislation expands the state’s existing preemption of local employment regulations so counties, cities, and other local governments cannot impose requirements on private employers relating to wages, compensation, benefits, leave, hours of work, or other terms and conditions of employment. Local governments are also prohibited from using contracts, leases, incentives, or other agreements to indirectly impose workplace mandates that state law reserves to the General Assembly.
Perhaps most importantly for employers, the legislation addresses labor relations and employer free speech. The new provisions prohibit local governments from withholding licenses, permits, zoning approvals, financial incentives, or other forms of government assistance because a business refuses to enter into a labor agreement or other union-related arrangement.
In other words, local officials cannot use their authority to pressure employers into labor-management agreements that they would not otherwise choose to adopt.
The law also includes a strong protection for employer communications with employees. Local governments may not condition permits, approvals, subsidies, incentives, or other benefits on an employer’s agreement to waive, restrict, or limit its ability to communicate with employees regarding unionization. This prevents local governments from imposing so-called “neutrality” requirements or similar restrictions as the price of obtaining governmental approvals. That means employers remain free to engage in lawful communications with their workforce consistent with federal labor law.
The legislation preserves limited exceptions. Local governments may continue to establish employment policies for their own employees, comply with federal program requirements, and participate in certain authorized economic development programs. However, they may not regulate the employment practices of private businesses beyond what state law permits.
For employers, the benefits are straightforward: a more uniform regulatory environment, protection against local government efforts to influence labor relations, and greater certainty that workplace rules will be governed by state and federal law rather than a patchwork of local mandates. By reinforcing statewide consistency and protecting employer decision-making and free speech rights, the new law strengthens the state’s longstanding reputation as a predictable and business-friendly place to operate and create jobs.
About the author
Sean P. Redmond
Sean P. Redmond is Vice President, Labor Policy at the U.S. Chamber of Commerce.
