Court Opinion

ID: 9914466
Source: CourtListenerOpinion
Date Created: 2024-01-02 13:04:27.327085+00
Date Added: 2024-06-11T13:13:12.600450
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                     No. COA23-236

                                  Filed 2 January 2024

Office of Administrative Hearings, No. 22 OSP 00401

WILLIAM T. CULPEPPER, III, Petitioner,

              v.

N.C. OFFICE OF ADMINISTRATIVE HEARINGS, Respondent.

       Appeal by Petitioner from a final decision entered 2 December 2022 by

Administrative Law Judge Beecher R. Gray in the Office of Administrative Hearings.

Heard in the Court of Appeals 20 September 2023.

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

       Attorney General Joshua H. Stein, by Special Deputy Attorney General Joseph
       Finarelli, for respondent-appellee.

       WOOD, Judge.

       William Culpepper (“Petitioner”) alleges the Office of Administrative Hearings

(“OAH” or “Respondent”) engaged in political affiliation discrimination by

designating the position of General Counsel at OAH as exempt from the provisions of

the Human Resources Act, a position he held from 1 January 2015 to 30 June 2022.

We hold the trial court did not err by granting summary judgment in Respondent’s

favor because Petitioner failed to carry his burden of establishing a prima facie case

of political affiliation discrimination.
              CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                   Opinion of the Court

                        I. Factual and Procedural History

       Petitioner is a member of the North Carolina State Bar and practiced law in

Edenton, North Carolina from 6 September 1973 until 1 January 2006. Petitioner

served as an elected Democrat member of the North Carolina House of

Representatives from 5 May 1993 until 1 January 2006 and alleges his reputation as

a prominent Democrat was widely known and reported in the news during his time

in office.

       In October 2014, Petitioner applied for the position of General Counsel with

the OAH. The Job Class Title for this position was “Attorney II.” The description of

work provided in the job posting for the position stated the hired employee:

             “performs a full range of legal services in matters affecting
             the legal responsibilities of OAH[,] . . . provides the delivery
             of legal services involving legal advice, opinions, research,
             writing, adjudications, consultations, mediations, and
             judicial administration[,] . . . act[s] as the agency rule
             coordinator[,] . . . [and] prepares opinions on North
             Carolina law for the three divisions [Civil Rights, Rules,
             and Hearings].

Petitioner was appointed to the position effective 1 January 2015.

       On 1 July 2021, Chief Justice Paul Newby of our Supreme Court appointed

Donald van der Vaart (“Director van der Vaart”) as the Director and Chief

Administrative Law Judge of OAH. Petitioner alleges Director van der Vaart is a

registered Republican. Petitioner further alleges that, according to OAH’s Senior

Administrative Law Judge Fred Morrison (“Judge Morrison”), shortly after Director

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                CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                        Opinion of the Court

van der Vaart assumed his position at OAH, Director van der Vaart asked Judge

Morrison why Petitioner was at OAH.1 Judge Morrison allegedly replied to Director

van der Vaart that he and Petitioner had a long association over the years, Petitioner

was no longer involved in politics, was loyal to OAH, and he would be loyal to Director

van der Vaart.

       As part of the Current Operations Appropriations Act of 2021 (S.L. 2021-180,

S.B. 105) enacted on 18 November 2021, the General Assembly included a provision

(the “Special Provision”) allowing the Chief Administrative Law Judge to designate

five OAH employees as exempt from the Human Resources Act.                            The Special

Provision reads:

               The number of administrative law judges and employees of
               the Office of Administrative Hearings shall be established
               by the General Assembly. The Chief Administrative Law
               Judge and five employees of the Office of Administrative
               Hearings as designated by the Chief Administrative Law
               Judge are exempt from provisions of the North Carolina
               Human Resources Act as provided by [N.C. Gen. Stat. §]
               126-5(c1)(27).   All other employees of the Office of
               Administrative Hearings are subject to the North Carolina
               Human Resources Act.

Current Operations Appropriations Act of 2021, S.L. 2021-180 (S.B. 105).

       Petitioner alleges Judge Morrison told him about a purported meeting between

Director van der Vaart and Kenan Drum (“Drum”) at the Legislative Building prior

1 Director van der Vaart states in his affidavit he was aware Petitioner had been appointed to serve

on the North Carolina Utilities Commission by a former Democrat Governor.

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              CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                  Opinion of the Court

to the Special Provision becoming public on 15 November 2021. Drum was the Policy

Advisor for General Government Appropriations to the Senate President Pro

Tempore. Petitioner alleges that, according to Judge Morrison, the meeting was

arranged by Ashley Berger Snyder (“Ms. Snyder”), Senator Berger’s daughter.

Petitioner alleges the appropriations budget for OAH is formulated by the General

Government Appropriations Subcommittee of the General Assembly’s House and

Senate. Petitioner further alleges Judge Morrison was told by Director van der Vaart

that Drum had referred to Judge Morrison as an “old time Democrat.”

      After the Special Provision became public, “much talk and concern” arose

among OAH personnel, particularly among the Administrative Law Judges (“ALJ”).

According to Judge Morrison, when Director van der Vaart heard about these

concerns, he sought to allay the ALJs’ fears by proclaiming that the Special Provision

was not meant for them. Judge Morrison allegedly told Director van der Vaart one

person felt the Special Provision was directed at him. Judge Morrison told Petitioner

that he felt that Director van der Vaart was referring to Petitioner, but neither

specifically stated Petitioner’s name.    Director van der Vaart replied to Judge

Morrison, “that might be right,” or words to that effect. The Petitioner discussed with

Judge Morrison his fears regarding the Special Provision adversely affecting his

employment.

      By letter dated 4 January 2022, Director van der Vaart notified Petitioner he

was designating the position of General Counsel as exempt from the State Human

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              CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                   Opinion of the Court

Resources Act, pursuant to the authority in the Special Provision.           The letter

informed Petitioner of the right to appeal the designation pursuant to N.C. Gen. Stat.

§ 126-5(h) and provided information on commencing a contested case under N.C. Gen.

Stat. § 150B-23. On 2 February 2022, Petitioner filed a Petition for a Contested Case

Hearing in which he alleged Respondent: (1) designated his position as an exempt

managerial position based on Respondent's discrimination against Petitioner due to

his political affiliation in violation of N.C. Gen. Stat. § 126-34.02(b) (2022); (2)

improperly designated his position as an exempt managerial position as defined by

N.C. Gen. Stat. § 126-5(b)(2) (the “Designation Claim”); and (3) violated Petitioner’s

state and federal constitutional rights by changing the position’s designation.

      On 10 February 2022, Respondent filed its letter to Petitioner notifying him of

his position’s designation change. This letter documented the agency action from

which Petitioner filed his petition for a contested case hearing. On 11 February 2022,

Respondent filed a Partial Motion to Dismiss pursuant to N.C. R. Civ. P. 12(b)(1) and

12(b)(6), arguing that as to Petitioner’s political affiliation discrimination claim, he

had failed to exhaust his administrative remedies as required by N.C. Gen. Stat. §

126-34.01 (2022) and failed to establish a prima facie case of political discrimination.

      On 24 February 2022, Petitioner filed an Amended Petition for a Contested

Case Hearing, specifying his and Director van der Vaart’s political affiliations. On 8

March 2022, Respondent filed a Partial Motion to Dismiss Petitioner’s amended

petition.   On 18 May 2022, ALJ Gray issued an order in which he dismissed

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               CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                    Opinion of the Court

Petitioner’s constitutional claims for lack of subject matter jurisdiction and deferred

judgment on Petitioner’s political affiliation discrimination claim and requested

additional briefing. On 10 June 2022, ALJ Gray denied Respondent’s motion to

dismiss Petitioner’s political affiliation discrimination claim. Director van der Vaart

discharged Petitioner from employment on 30 June 2022.

       On 31 August 2022, Respondent filed a motion for summary judgment,

supported by affidavits by Director van der Vaart and Judge Morrison, on Petitioner’s

political affiliation claim.    Petitioner filed his own affidavit in response to

Respondent’s motion for summary judgment on 15 September 2022. After a hearing

on 10 November 2022, ALJ Gray issued an order on 2 December 2022 in which he

found no genuine dispute exists as to any material fact in Petitioner’s designation

and political affiliation claims.

       ALJ Gray entered summary judgment for Petitioner on his claim that his

position was improperly designated as an exempt managerial position, and ordered

he be “reinstated to his status as a Career State Employee under [N.C. Gen. Stat.] §

126-1.1 and further that he be awarded back pay and benefits for any pay and benefits

he has lost or loses before he is so reinstated.” ALJ Gray entered summary judgment

in favor of Respondent on Petitioner’s political affiliation claim, dismissing it with

prejudice.

       On 3 January 2023, Petitioner filed written notice of appeal to this Court

pursuant to N.C. Gen. Stat. §§ 126-34.02 and 7A-29. On 9 April 2023, upon the

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               CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                  Opinion of the Court

parties’ cross-Motions for Judicial Review, the superior court vacated ALJ Gray’s

order granting summary judgment in favor of Petitioner on his Designation Claim,

and remanded to ALJ Gray for consideration of whether Director van der Vaart’s

designation of Petitioner’s position as exempt from the Human Resources Act was

other than as required by law, including under the state and federal constitutions.

Culpepper v. N.C. Office of Administrative Hearings, Nos. 22 CVS 110 and 213 (N.C.

Super. Ct. Apr. 9, 2023). Petitioner has filed a separate contested case regarding his

discharge, which is not at issue here.      All other relevant facts are provided as

necessary in our analysis.

                                    II. Analysis

      The sole issue before this Court is whether ALJ Gray erred in granting

summary judgment in favor of Respondent on Petitioner’s political affiliation

discrimination claim.

      Appellate courts review an appeal from a summary judgment de novo. In re

Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008). Summary judgment is

proper when:

             there is no genuine issue as to any material fact and that
             any party is entitled to a judgment as a matter of law.
             When considering a motion for summary judgment, the
             trial judge must view the presented evidence in a light
             most favorable to the nonmoving party. If the movant
             demonstrates the absence of a genuine issue of material
             fact, the burden shifts to the nonmovant to present specific
             facts which establish the presence of a genuine factual
             dispute for trial.

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              CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                   Opinion of the Court

Id. at 573, 669 S.E.2d at 576 (citations omitted).

      Under N.C. Gen. Stat. § 126-34.02, a petitioner of a contested case in OAH is

entitled to this Court’s judicial review of a final decision of OAH if a State employee

alleges discrimination based on political affiliation in the terms and conditions of his

employment. N.C. Gen. Stat. § 126-34.02(a), (b)(1); see N.C. Gen. Stat. § 7A-29. North

Carolina courts “look to federal decisions for guidance in establishing evidentiary

standards and principles of law to be applied in discrimination cases.” N.C. Dep't of

Correction v. Gibson, 308 N.C. 131, 136, 301 S.E.2d 78, 82 (1983). Specifically, North

Carolina courts have adopted the burden-shifting framework established in

McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817, 36 L. Ed. 2d 668

(1973). Gibson, 308 N.C. at 136, 301 S.E.2d at 82. This framework requires the

claimant to establish a prima facie case of discrimination. Id. at 137, 301 S.E.2d at

82.

      First, a claimant must show:

             (1) the employee worked for a public agency in a non-
             policymaking position (i.e., a position that does not require
             a particular political affiliation), (2) the employee had an
             affiliation with a certain political party, and (3) the
             employee's political affiliation was the cause behind, or
             motivating factor for, the adverse employment action.

N.C. Dep't of Pub. Safety v. Ledford, 247 N.C. App. 266, 288, 786 S.E.2d 50, 65 (2016)

(brackets and ellipsis omitted). The court in Ledford provided further guidance on

establishing a prima facie case:

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              CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                  Opinion of the Court

             [T]he burden of establishing a prima facie case of
             discrimination is not onerous and may be established in
             various ways, including a showing of dissimilar treatment
             of the claimant as compared to other employees. This is
             because the showing of a prima facie case is not equivalent
             to a finding of discrimination. Rather, it is proof of actions
             taken by the employer from which a court may infer
             discriminatory intent or design because experience has
             proven that in the absence of an explanation, it is more
             likely than not that the employer's actions were based upon
             discriminatory considerations.

Id. at 287–88, 786 S.E.2d at 64 (citation, quotation marks, and brackets omitted).

      Second, if the claimant establishes a prima facie case of political

discrimination, “[t]he burden shifts to the employer to articulate some legitimate

nondiscriminatory reason for the applicant’s rejection.” Gibson, 308 N.C. at 137, 301

S.E.2d at 82; see id. at 293, 786 S.E.2d at 67–68 (“Our case law makes [it] clear that

once the employee has satisfied the three elements of his prima facie case, the burden

shifts to the employer to articulate some nondiscriminatory reason for taking adverse

action against him.”).

      Third, and finally, “[i]f a legitimate nondiscriminatory reason for rejection has

been articulated, the claimant has the opportunity to show that the stated reason for

rejection was, in fact, a pretext for discrimination.” Gibson, 308 N.C. at 137, 301

S.E.2d at 82. “To carry this burden, it is permissible for the employee to rely on

evidence offered to establish his prima facie case.” Ledford, 247 N.C. App. at 294,

786 S.E.2d at 68. Nevertheless, “[t]o raise a factual issue regarding pretext, the

plaintiff's evidence must go beyond that which was necessary to make a prima facie

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                CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                        Opinion of the Court

showing by pointing to specific, non-speculative facts which discredit the [employer’s]

nondiscriminatory motive.” Head v. Adams Farm Living, Inc., 242 N.C. App. 546,

558, 775 S.E.2d 904, 912 (2015) (brackets omitted).

       Respondent concedes Petitioner has satisfied the first two prongs of

establishing a prima facie case. Respondent, however, contends Petitioner failed to

establish Respondent’s alleged discriminatory intent as a matter of law. We agree.

       The Human Resources Act and its employment protections apply to all State

employees not specifically exempted in N.C. Gen. Stat. § 126-5. Exempt positions are

either “exempt managerial” or “exempt policymaking.” N.C. Gen. Stat. § 126-5(b)(2)–

(3a). Exempt managerial positions are those “delegated with significant managerial

or programmatic responsibility that [are] essential to the successful operation of a

State department, agency, or division, so that the application of [N.C. Gen. Stat. §]

126-35 (2022)2 to an employee in the position would cause undue disruption to the

operations of the agency, department, institution, or division.” N.C. Gen. Stat. § 126-

5(b)(2).

       The General Assembly amended N.C. Gen. Stat. § 126-5, effective 18 November

2021, to allow the OAH Director to designate five OAH employees as exempt from the

2 N.C. Gen. Stat. § 126-35 provides: “No career State employee subject to the North Carolina Human

Resources Act shall be discharged, suspended, or demoted for disciplinary reasons, except for just
cause.” N.C. Gen. Stat. § 126-35(a).

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                CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                   Opinion of the Court

Human Resources Act. N.C. Gen. Stat. § 126-5(c1)(27). Director van der Vaart

designated Petitioner and three other positions as managerially exempt.

         Considering the evidence of Respondent’s alleged discriminatory intent

chronologically, the first event relevant to Respondent’s asserted state of mind

occurred shortly after Director van der Vaart assumed his position as OAH Director

and Chief Administrative Law Judge when he asked Judge Morrison why Petitioner

was at OAH. There is no explanation in the Record regarding why Director van der

Vaart asked Judge Morrison this question. In his affidavit, Petitioner quotes Director

van der Vaart’s affidavit in which he states he was aware Petitioner had been

appointed to serve on the Utilities Commission by a Democrat Governor. However,

this “admission” followed his statement asserting he had not considered the political

affiliation of any of the individuals whose positions he designated as managerial

exempt, although he was aware Petitioner was registered as a Democrat. Director

van der Vaart’s “admission” is also relevant to Respondent’s concession of prong two

of Petitioner’s prima facie case, that Petitioner is affiliated with a certain political

party, but it does not explain a discriminatory reason behind him asking Judge

Morrison why Petitioner worked at OAH. Ledford, 247 N.C. App. at 288, 786 S.E.2d

at 65.

         According to Petitioner, Judge Morrison apparently interpreted Director van

der Vaart’s inquiry as displaying concern regarding Petitioner’s loyalty because

Judge Morrison assured Director van der Vaart that Petitioner was no longer

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              CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                  Opinion of the Court

involved in politics and was loyal to OAH. Judge Morisson’s response to Director van

der Vaart is not evidence of Respondent’s discriminatory intent when there is a total

absence of context surrounding Director van der Vaart’s question to Judge Morrison.

To conclude that Director van der Vaart’s question held discriminatory intent would

require looking beyond his question and speculating about his motive based on Judge

Morrison’s seeming interpretation of his question.

      Petitioner next alleges that before the Special Provision became public,

Director van der Vaart had a meeting with Drum at the Legislative Building in which

Drum had referred to Judge Morrison as an “old time Democrat.” The statement has

very little, if any, relevance to discerning Respondent’s motivation for designating

Petitioner’s position as managerial exempt. Director van der Vaart is not the person

alleged to have made the statement. Moreover, no connection to Drum’s alleged

statement and Director van der Vaart’s statement is asserted, such as adoption by

Director van der Vaart of what Drum said (for example, “I know, right?” or “I agree.”).

No evidence is shown of any disparaging or discriminatory remark made by Director

van der Vaart in response to Drum’s purported statement concerning Judge

Morrison. Its relevance is limited to Director van der Vaart’s knowledge that Judge

Morrison is a registered Democrat, but it does not demonstrate any discriminatory

intent in designating Petitioner’s position as managerial exempt.

      We next consider the concern among OAH personnel regarding the Special

Provision as well as Director van der Vaart’s comment stating, “that might be right.”

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               CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                  Opinion of the Court

The fact that the Special Provision was a subject of “much talk and concern” among

OAH personnel demonstrates, if anything, that it was not clear which positions would

be designated managerial exempt. After Judge Morrison stated to Director van der

Vaart that there was one person who felt the Special Provision was meant for him,

Director van der Vaart responded, “that might be right,” or words to that effect,

without identifying Petitioner by name, leaving any effort to determine whether

Director van der Vaart had targeted Petitioner based on political affiliation merely

speculative.

      Moreover, even if Petitioner were the person to whom Judge Morrison referred,

the conversation could just as easily, and perhaps even more logically, be interpreted

to mean the General Assembly, rather than Director van der Vaart, had targeted

Petitioner with its Special Provision. In his affidavit, Director van der Vaart stated

that he “had no conversations with members of the General Assembly about

establishing exempt positions at OAH and was therefore surprised to learn of

legislators’ revisions to [N.C. Gen. Stat.] § 126-5(c1)(27) giving me, as the Director,

the authority to designate five additional positions within OAH as exempt from the”

Human Resources Act.

      The Record does not show whether Plaintiff was the subject of their

conversation, and we will not rely upon mere conjecture to reach a conclusion.

Morrison-Tiffin v. Hampton, 117 N.C. App. 494, 505, 451 S.E.2d 650, 658 (1995)

(summary judgment properly entered for defendants where plaintiffs could only “rely

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              CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                   Opinion of the Court

on mere conjecture and have shown no facts sufficient to support their allegations of

a common agreement and objective” of gender discrimination).

      In summary, the Record indicates Director van der Vaart only mentioned

Petitioner by name once to inquire of Judge Morrison why he was working at OAH,

and it is mere conjecture to presume Judge Morrison and Director van der Vaart were

speaking of Petitioner when Director van der Vaart commented “that might be right.”

      Director van der Vaart designated three other positions as managerial exempt:

Lamont Goins, the Director of the Civil Rights Division; Ms. Snyder, the Codifier of

Rules; and Angeline Hariston, the Human Resources Director. Director van der

Vaart designated the Codifier of Rules as exempt, even though he was aware the

employee was a registered Republican. Additionally, the Record reveals Director van

der Vaart was not aware of the political affiliations of the Director of the Civil Rights

Division or of the Human Resources Director.              Therefore, we cannot “infer

discriminatory intent or design.” Ledford, 247 N.C. App. at 288, 786 S.E.2d at 64.

      The Record does not provide an explanation for the designation or evidence

that amounts to more than mere speculation. We are unpersuaded that it is more

likely than not Director van der Vaart designated Petitioner’s position as exempt

based on political discrimination, especially in the light of the fact that Director van

der Vaart designated three other positions as exempt, including at least one of which

was occupied by a registered Republican. Ledford, 247 N.C. App. at 287–88, 786

S.E.2d at 64. Petitioner has not established a prima facie case of discrimination.

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                CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                    Opinion of the Court

Accordingly, ALJ Gray did not err in granting summary judgment in Respondent’s

favor.

         We briefly address Petitioner’s argument that his position’s lack of managerial

responsibility demonstrates the pretextual nature of Respondent’s explanation for

designating it as managerial exempt. Petitioner argues Respondent failed to consider

the Division of State Archives’ Functional Schedule for North Carolina State

Agencies, which states that communications by “agency staff who are involved in

decision-making, policy development, or other high-level planning for the agency”

shall be archived permanently.        Petitioner further argues Respondent failed to

consider the definition of “Managerial positions” as is defined in 25 N.C. ADMIN. CODE

1L.0306 (2023):

               Managerial positions are defined as positions which
               manage established divisions or subdivisions of a
               department, agency or university. These employees direct
               the work of one or more supervisors and have the authority
               to hire, reward, discipline, or discharge employees. These
               employees may also provide suggestions for changes in
               policy to senior executives with policy-making authority.

25 N.C. ADMIN. CODE 1L.0306(b) (2023).

         First, we note these arguments are more properly aimed at Petitioner’s

Designation Claim, which is focused on the legality of Respondent’s designation. This

claim is not before us on appeal. Second, the manner by which the Division of

Archives classifies communications lacks any discernable relevance to Respondent’s

state of mind in designating Petitioner’s position as exempt. Third, 25 N.C. ADMIN.

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              CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                                   Opinion of the Court

CODE 1L.0306(b) is written in the context of Title 25 of our Administrative Code,

Subchapter 1L, Section 0.300, titled, “Equal Employment Opportunity Institute”

(“EEOI”).

      The definition of “Managerial positions” in that section answers the question

of who must participate in the EEOI, as is required in 25 N.C. ADMIN. CODE 1L.0302

(2023): “Supervisors and managers hired, promoted or appointed on or after July 1,

1991 shall participate in the EEOI.” Whether Respondent did or did not consider this

part of our State’s Administrative Code is not probative of his state of mind in

designating Petitioner’s position as exempt.

      Petitioner’s argument asserting Respondent should have designated other

positions as managerial exempt concerns the propriety and legality of Respondent’s

designation, which are not currently before us. The only issue before us is whether

Respondent acted with impermissible political motive.

                                   III. Conclusion

      The General Assembly vested Director van der Vaart with statutory authority

to designate five employees at OAH as exempt. The Record does not establish a prima

facie case that Director van der Vaart did so with political motivations in Petitioner’s

position.   Therefore, we conclude ALJ Gray did not err in granting summary

judgment in Respondent’s favor on Petitioner's political affiliation discrimination

claim. The judgment appealed from is affirmed.

      AFFIRMED.

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      CULPEPPER V. N.C. OFFICE OF ADMINISTRATIVE HEARINGS

                       Opinion of the Court

Judges TYSON and COLLINS concur.

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