Court Opinion

ID: 9956421
Source: CourtListenerOpinion
Date Created: 2024-04-02 12:05:38.830588+00
Date Added: 2024-06-11T08:16:25.340907
License: Public Domain

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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                                    Opinion of the Court

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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                                         Opinion of the Court

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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                                   Opinion of the Court

             (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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                                   Opinion of the Court

                          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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                                        Opinion of the Court

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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                                         Opinion of the Court

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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                                         Opinion of the Court

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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                                     Opinion of the Court

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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                                   Opinion of the Court

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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                                    Opinion of the Court

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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                                    Opinion of the Court

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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                                   Opinion of the Court

             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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                      Opinion of the Court

        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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                                  Opinion of the Court

             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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                                    Opinion of the Court

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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                                   Opinion of the Court

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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                                         Opinion of the Court

       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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                                   Opinion of the Court

      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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                                         Opinion of the Court

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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                                        Opinion of the Court

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

                                 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.

                                        - 51 -
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.

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                      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.

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