Labor & Employment Law Daily Wrap Up, STATE-LAW CLAIMS—N.C. Sup. Ct.: Statute requiring termination for recording false ‘drivers license’ information not applicable to bus driver recertification, (Aug 26, 2025)

By Ronald Miller, J.D.

De novo review by a court is the appropriate standard for statutory interpretation, the North Carolina Supreme Court concluded, declining to defer to the department’s interpretation of a criminal statute governing false information concerning a driver’s license.

A state Department of Transportation employee, who recertified some school bus drivers without conducting the required ride-along observations, was not subject to mandatory termination under a criminal statute, N.C.G.S. § 20-34.1, that makes it a felony to knowingly enter “false information concerning a driver’s license or a special identification card,” ruled the North Carolina Supreme Court. In reaching its decision, the high court first expressly disavowed any rule requiring courts to defer to an agency’s interpretation of a statute, concluding that de novo review by a court is the appropriate standard for statutory interpretation. Thereafter, the high court concluded that an appeals court erred in deferring to the department’s interpretation of the statute and that the statute did not apply to the employee’s conduct and reversed the judgment of the appeals court (Savage v. North Carolina Department of Transportation, No. 235PA23 (N.C. Sup. Ct. Aug. 22, 2025)).

Bus driver certification. In 2018, the North Carolina Department of Transportation hired the employee as a “driver education program specialist” responsible for certifying school bus drivers. To drive a school bus in North Carolina, a driver must possess a commercial driver’s license, two commercial driver’s license “endorsements,” one for passengers and one for school buses, and receive a school bus driver’s “certificate.”

Ride-along observations. For renewal of an existing school bus driver’s certificate for a driver with a good safety record, the driver need only take an informal ride-along with a program specialist like the employee.

In 2019, the department became concerned that the employee had recertified some school bus drivers without conducting the required ride-along observations. During the department’s investigation, the employee admitted that he recertified five bus drivers without performing those observations.

Discharge. The department promptly terminated the employee because he had engaged in various forms of unacceptable personal conduct such as “violation of known or written work rules” and “conduct unbecoming a State employee that is detrimental to State service.” In addition, the employer informed the employee that his actions violated N.C.G.S. § 20-34.1, a criminal statute that makes it a felony to knowingly enter “false information concerning a drivers license or a special identification card” into certain department records. Relying on this provision, the employer informed the employee that his termination was required by law and not a matter over which it had any discretion.

Administrative ruling. Thereafter, an administrative law judge determined that the employer did not have just cause to terminate the employee’s employment. The ALJ first determined that the plain language of N.C.G.S. § 20-34.1 did not apply to his conduct because the information he submitted was not “concerning a drivers license” and instead concerned the separate credential needed to drive a school bus. Further, the ALJ determined that the employer “failed to meet its burden of proof that just cause exists” to terminate the employee’s employment and instead ordered the department to impose a lesser sanction.

Mandatory termination. The department appealed the ALJ’s ruling to the Court of Appeals, which reversed the ALJ’s final decision. The appeals court reasoned that any false information about the school bus driver’s certificate was “concerning a driver’s license” because that information was ultimately entered in the same department database that houses driver’s license information. The appeals court’s interpretation of the criminal statute meant that the employee’s termination was mandatory.

Agency interpretation. The employee petitioned the North Carolina Supreme Court for review, arguing that the appeals court wrongly deferred to the department’s interpretation of the statute and that the statute did not apply to his conduct.

As an initial matter, the state high court noted that several decades ago, the Court of Appeals held it “a tenet of statutory construction that a reviewing court should defer to the agency’s interpretation of a statute it administers so long as the agency’s interpretation is reasonable and based on a permissible construction of the statute.” The high court observed that it has never approved this interpretative rule and that it directly conflicts with its precedent requiring courts to review questions of law de novo. Accordingly, the court expressly disavowed any rule requiring courts to defer to an agency’s interpretation of a statute, overruled any previous appeals court case law to the contrary, and instructed all lower courts to apply traditional de novo review to the interpretation of state statutes.

Statutory interpretation. Having reaffirmed the appropriate de novo standard of review for statutory interpretation, the state high court applied that standard in this case. This appeal turned entirely on the proper interpretation of N.C.G.S. § 20-34.1, a criminal statute making it a felony to knowingly enter false information concerning a driver’s license into certain department records and requiring the immediate dismissal of any employee who does so.

The department argued that the employee violated this statute when he entered false information concerning the school bus driver’s certificates into the department’s records. However, it conceded that a school bus driver’s certificate is not a driver’s license. But the department argued that because a school bus driver’s certificate is needed, in addition to a commercial driver’s license, to obtain the privilege of operating a school bus, it satisfies the statutory definition of a “license.”

License defined. The state high court determined that the department’s argument had a fatal flaw. It noted that N.C.G.S. § 20-34.1 does not apply to every type of “license” as that term is defined in N.C.G.S. § 20-4.01(17). The statute only applies to information concerning “a drivers license.” This is a crucial distinction because, even under the department’s interpretation of these statutes, a driver’s license is only one subset of the many types of driving privileges that meet the broader statutory definition of a “license.”

The court observed that the General Assembly created a broad, statutory definition for the term “license” but then chose not to use that defined term in this particular statute, instead opting for the narrower term “drivers license.” Thus, a school bus driver’s certificate might be a type of statutory “license,” but it is not a “drivers license” for purposes of N.C.G.S. § 20-34.1.

The high court pointed out that a school bus driver’s certificate and a commercial driver’s license are two separate state-issued credentials with their own separate standards and qualifications. Thus, only false information relating to a commercial driver’s license renewal is “concerning” that driver’s license. False information relating to a school bus driver’s certificate, by contrast, is “concerning” that separate driving credential.

Because the text of the statute indicates that the legislature was focused on criminalizing conduct that leads to the issuance of fake or illegal government IDs, not the falsification of supplemental driving credentials, the court held that N.C.G.S. § 20-34.1 does not apply to the conduct alleged in this case and reversed the judgment of the appeals court.

Concurrence. Justice Barringer filed a separate concurring opinion to underscore the function of the judiciary to interpret the law. He urged that it is the province of the judicial department to say what the law is, and that deference to either the executive department or the legislative department violates a fundamental principle of separation of powers—that the power to write a law and the power to interpret it cannot rest in the same hand.

Concurring in part and dissenting in part. Justice Earls agreed with the majority’s conclusion that the statute at issue here, N.C.G.S. § 20-34.1, was properly read to apply to a driver’s license only and not the school bus driver’s certificate renewed by the employee. However, he argued that the high court should not completely disregard agency expertise in interpreting a statute it is charged to enforce. Justice Earls argued that the appropriate balance is struck when courts weigh the “thoroughness evident in [the agency’s] consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.” He also dissented from the majority’s decision to remand this case to the appeals court to determine in the first instance whether there was just cause to terminate the employee’s employment.

The case is No. 235PA23.

Judge: Dietz, R.

Attorneys: Ben G. Irons II (Irons & Irons) for Thurman Crofton Savage. Jonathan J. Evans, Office of the Attorney General, for North Carolina Department of Transportation.

Cases: StateLawClaims Discharge Procedure NorthCarolinaNews