Labor & Employment Law Daily Wrap Up, PROCEDURE—N.C. Sup. Ct.: North Carolina sets aside state agency deference, holds reviewing courts should consider matters anew, (Oct 20, 2025)

By Todd Harrison, J.D.

Courts in North Carolina “have a constitutional duty to interpret the law and cannot defer in that role to the other branches of government.”

Clarifying the appropriate standard of review when construing the meaning of state rules and regulations, the Supreme Court of North Carolina expressly disavowed any interpretative rule requiring courts to defer to a state agency’s interpretation of state rules and regulations, overruled any previous Court of Appeals case law to the contrary, and instructed all lower courts to apply traditional de novo review to the interpretation of state rules and regulations. The court also rejected a dissenting argument from the appellate court which asserted that the case must be remanded to the trial court for further proceedings on the free speech claim raised by a former college professor. Justice Earls, dissenting in part, found the First Amendment issue was properly presented for review (Mitchell v. The University of North Carolina Board of Governors, No. 121A23 (Oct. 17, 2025)).

In 2017, Winston-Salem State University fired a tenured college professor after he failed to respond to repeated inquiries from a student and faculty members concerning incomplete grading, failed to teach one of his assigned classes, and wrote a letter to a fellow faculty member that used offensive racial slurs.

Lawsuit. Initially, the professor challenged his termination through the administrative appeal process. The case eventually worked its way up to judicial review, first at the state superior court and then the state Court of Appeals. The professor failed to prevail on his claims at each step of the process.

After the Court of Appeals rejected his arguments, with one judge concurring in part and dissenting in part, the professor filed two notices of appeal with the state high court, one based on the dissent and one based on a substantial constitutional question.

The state high court allowed a motion to dismiss the constitutional appeal for “lack of substantial constitutional question.” It allowed review only on the following issue: “Under North Carolina law, when, if ever, should a court defer to an agency’s interpretation of the rules and regulations that the agency has promulgated.?”

At odds with precedent. At the Court of Appeals, the professor argued that the university failed to follow its own rules and regulations governing the dismissal of a tenured professor. The appellate court rejected this argument, holding that “an agency’s construction of its own regulations is entitled to substantial deference” and that courts must therefore “defer to the agency’s interpretation of its regulations unless it is plainly erroneous.”

As an initial matter, the state high court found this holding to be at odds with its precedent. In Britt v. N.C. Sheriffs’ Educ. & Training Standards Comm’n, 348 N.C. 573 (1998), the court held that when “the issue on appeal is whether a state agency erred in interpreting a regulatory term, an appellate court may freely substitute its judgment for that of the agency and employ de novo review.”

This “de novo” standard of review, explained the court, is compelled by the judiciary’s constitutional role, and North Carolina courts “have a constitutional duty to interpret the law and cannot defer in that role to the other branches of government.” However, the court did point out that agency interpretations of the law can always inform a court’s judgment, but those interpretations should not be read as binding.

Auer deference. The confusion at the appellate court appeared to stem from the state high court’s discussion of agency deference in Morrell v. Flaherty, 338 N.C. 230 (1994), a case decided several years before Britt. There, the court explained that “the agency’s interpretation must be given controlling weight unless it is plainly erroneous or inconsistent with the regulation.” These and other decisions employed what came to be known as “Auer deference.” The court used this federal interpretative doctrine in Morrell because it was examining a federal agency’s interpretation of federal regulations.

In the intervening years since Auer and Morrell, the Supreme Court has tightened the reins on that doctrine considerably, observed the court, and the language quoted in Morrell is no longer accurate because Auer deference is now subject to a number of additional qualifications and restrictions under federal law. Moreover, Auer deference has always been a distinctly federal doctrine, said the court.

North Carolina’s Administrative Procedure Act does not contain the language the Supreme Court evaluated to support Auer deference in federal law. To the contrary, it instructs courts to review this sort of legal question “using the de novo standard of review.” In other words, North Carolina courts’ de novo review of legal questions “is not a choice, it is a constitutional command.”

“Because a number of Court of Appeals decisions have mistakenly read Morrell to create a form of Auer deference under North Carolina law, we take this opportunity to expressly hold that courts interpreting state administrative regulations must freely substitute their judgment for that of the agency and employ de novo review,” concluded the court on this issue.

First Amendment issue. Next, the court addressed a narrow legal issue raised by the dissent at the appellate court. There, the majority and the dissent disagreed about whether the offensive racial slurs in the professor’s letter were speech on a matter of public concern for First Amendment purposes. This distinction matters, explained the state high court, because if those racial slurs were speech on a matter of public concern, the reviewing court would be required to apply the appropriate balancing test.

If a lower court examining this question failed to engage in the proper legal analysis, there is no need to remand the case for that court to do so, explained the court here. Because, as discussed above, review is de novo, if an appellate court has jurisdiction over that legal question, it can simply assess it using the correct analysis.

The dissent did not understand this principle, said the court. It first explained why the racial slurs should be considered speech on a matter of public concern and then stated that it would remand the case to the trial court to engage in the requisite balancing test. The court noted that the issue “unquestionably was raised and passed upon in the trial court.” Although the trial court’s reasoning and analysis may have been perfunctory, this should not impact appellate review, as legal questions are reviewed de novo.

Jurisdictional constraint. If a question of law is properly preserved for appellate review, the appellate court must review that legal question de novo, explained the court. An appellate court cannot ignore a properly preserved question of law because it wants the trial court to provide further legal analysis, the court stated. Thus, the Court of Appeals dissent should not have ignored the First Amendment balancing test that it contended was applicable in this case. It should have engaged in that test and, if appropriate, explained why that reasoning would impact the outcome of the appeal.

“This error by the dissent constrains our jurisdiction,” said the court. As a result, the court’s review was limited to whether the case must be remanded to the trial court to engage in the applicable First Amendment balancing test. As set forth above, the court found such reasoning to be erroneous and rejected such an argument. Even if the court were to agree with the dissent that the balancing test was triggered, it lacked the jurisdiction to go beyond the dissent’s reasoning and engage in the constitutional analysis itself because the dissent had declined to do so. Accordingly, the judgment of the appellate court was modified and affirmed.

Dissent. Concurring in part and dissenting in part, Justice Earls agreed with the result reached by the majority only. However, she disagreed with the majority taking the opportunity to broadly proclaim that no Auer deference exists in state administrative law, arguing that such sweeping language went beyond the court’s precedent and the narrow issue presented on appeal.

As to the First Amendment issue, Justice Earls dissented, contending that the issue was presented for the court’s review and she would have reached the merits of the professor’s First Amendment challenge, disagreeing with the majority’s “strained use of jurisdiction to skirt resolution of this important legal issue.”

The case is No. 121A23.

Judge: Dietz, R.

Attorneys: Nathan Wilson (Fox Rothschild) for Alvin Mitchell. Jeff Jackson, Office of the Attorney General, for The University of North Carolina Board of Governors.

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