The US Supreme Court recently declined to hear an appeal from North Carolina over the constitutionality of a state law allowing employers to sue employees working as undercover investigators. The Supreme Court’s denial leaves in place a lower federal court ruling that the law violated the First Amendment rights when enforced against “newsgathering activities”. The Supreme Court offered no explanation or reasoning for denying the appeal.
The law in question, N.C. Gen. Stat. § 99A-2(a), also known as 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. If the employer won 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 that the statute was an unconstitutional limitation of First Amendment rights, saying that the law substantially burdened newsgathering and publishing activities. They noted that an employee could take pictures of documents, take home paperwork, and violate other aspects of the statute and face no consequences. Yet, 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. The court also invalidated the rule as overbroad, stating that 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. Firstly, they argued that the Supreme Court should intervene to resolve disagreement among the circuits over whether recording in non-public spaces is protected under the First Amendment. They cited several cases from the Ninth, Fourth and Tenth Circuits to demonstrate differing interpretations. They stated that this split exemplifies the broader doctrinal uncertainty that States face when trying to reinforce private property rights consistent with the First Amendment.
Secondly, North Carolina argued that the case presented important questions of First Amendment law, again focusing on doctrinal uncertainty in state legislatures on how to construct statutes that do not infringe upon the First Amendment. Lastly, they contended that the case was incorrectly decided, asserting that the law was consistent with longstanding property rules and tort principles, and that employees have traditionally owed a duty of loyalty. Despite these arguments, the Supreme Court was not convinced to weigh in on the matter.
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.