Budget proposal could include new limits on suing North Carolina employees

Under a little-known provision quietly slipped into early state budget proposals, North Carolinians who sue state employees could soon lose the ability to present some cases to a jury of their peers in state court.

Driving the news: The measure could be included in a final draft of the budget, which could be unveiled any day now.

• It would require that any claims alleging negligence of state employees be heard only by the North Carolina Industrial Commission, a state agency tasked with handling workers compensation cases as well as tort cases against the state.
• The Industrial Commission caps damages that can be awarded at $1 million.

Why it matters: Such a change could limit victims of negligence or wrongdoing by doctors at state hospitals, teachers and other state employees from seeking recourse by presenting their case to a jury of their peers, with no limit to damages.

• "There's no doubt in my mind that folks who are injured by the negligence of a public employee get a raw deal here," David Pishko, a trial lawyer and professor at Wake Forest University Law who teaches a course called "Suing Government."
• "We're giving some benefit to the wrongdoer."

Threat level: Some cases against state employees that remain pending in state courts could also be halted if the provision becomes law.

• That potentially includes a lawsuit filed by a group of former University of North Carolina School of the Arts students alleging dozens of teachers and administrators participated or allowed sexual, physical and emotional abuse.

Of note: The change could also bog the Industrial Commission down with cases and cost taxpayers more, some opponents of the change have argued.

How it works: As of now, plaintiffs can bring lawsuits against state agencies or employees in their official capacity to the Industrial Commission, which is made up of six commissioners appointed by the governor who hear and decide the cases.

• Plaintiffs also separately sue state employees in their individual capacity in state courts.
• Individual versus official capacity has been the subject of recent litigation. The state supreme court ruled in one case in 2021 that if a plaintiff sues a state employee in their "individual capacity" the case is not required to go through the Industrial Commission.
• State supreme court justice Phil Berger Jr., Senate leader Phil Berger's son, dissented in that case.

What they're saying: State labor commissioner Josh Dobson, who supports the potential change, said that case "set the stage for citizens to pursue state employees for tort claims even when an employee is not the direct cause of an injury to a member of the public," his office said in a statement.

• Dobson's office also said the case gives way for plaintiffs to receive "double recovery" by allowing tort claims to be filed in both the Industrial Commission and the courts. The proposed measure would prevent that, so long as employees were acting willfully and "within the scope of their employment."

State of play: The provision was included into the final draft of the House budget proposal as well as an early draft of the Senate budget.

• The measure was not included in the final Senate budget, however.
• With the budget still in limbo, it's unclear if the provision will also be included in whatever final spending proposal the legislature passes.