US Supreme Court declines North Carolina appeal in undercover investigations case News
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US Supreme Court declines North Carolina appeal in undercover investigations case

The US Supreme Court declined to hear an appeal from North Carolina on Monday over the constitutionality of a state law allowing employers to sue employees working as undercover investigators. The denial leaves in place a lower federal court ruling that the law violated First Amendment rights when enforced against “newsgathering activities.” The denial from the Supreme Court offered no explanation or reasoning.

The challenged statute, N.C. Gen. Stat. § 99A-2(a), also called the Property Protection Act, allowed employers to sue employees engaged in undercover activities. The text of the statute covered actions such as unauthorized removal of data or documents, capturing of images, “intentionally” placing unattended recording devices on employer premises or substantially interfering with the employer’s ownership of the property. Provided the employer prevailed in a lawsuit, they could have sought attorney’s fees, compensatory damages, and exemplary damages of $5,000 for each day a defendant acted in violation of the statute.

In February, the United States Court of Appeals for the Fourth Circuit ruled the statute was an unconstitutional limitation of First Amendment rights. The court stated that the law substantially “burden[ed] newsgathering and publishing activities.” The majority noted that an employee could take pictures of documents, take home paperwork, and violate other aspects of the statute and face no consequences. However, if the employee used the images or documents “to speak out against the employer,” then they would, under the text of the statute, face heavy penalties. Additionally, the court invalidated the rule as “overbroad,” as applying the law in a strict sense might deter employees from reporting safety and other workplace violations.

North Carolina’s writ of certiorari focused on three arguments. First, the state argued that the Supreme Court should intervene to “[r]esolve disagreement among the circuits” whether recording in “non-public” spaces is protected under the First Amendment. Several cases from the Ninth, Fourth and Tenth Circuits were cited to show differing interpretations. They stated, “this split exemplifies the broader doctrinal uncertainty that States face when seeking to reinforce private property rights consistent with the First Amendment.”

Second, North Carolina argued that the case presented important questions of First Amendment law. This argument again focused on “doctrinal uncertainty” in state legislatures on how to construct statutes that do not implicate the First Amendment. Third, the state contended that the case was incorrectly decided. They asserted that the law was “consistent” with “longstanding property rules” and tort principles and that the nation’s history shows a tradition of employees owing a “duty of loyalty.” None of the arguments persuaded the Supreme Court to weigh in.

The challenge to the law was originally brought by the animal rights group People for the Ethical Treatment of Animals (PETA), which often performs undercover investigations of animal or livestock-related industries.