COA: Employment Contract Existed Between Temporary State Employees and State

Yesterday the COA held that an employment contract existed between temporary state employees and a state regulatory body. The case is Sanders v. State Personnel Commission.

Plaintiffs worked for the State as temporary employees through a temp agency for periods of time ranging from about a year to more than 6 years. They claimed they were wrongfully denied employment benefits under state regulations promulgated by the State Personnel Commission ("SPC"). The SPC is given lawmaking power by the NC legislature to establish regulations governing job classification and compensation. SPC regulations provide that temporary employment may not exceed 12 months and that any employee who stays in a "time-limited" position for more than three years must be considered a permanent employee.

The COA held that the SPC's rules must be read into any contract between plaintiffs and the temporary agency, and that the SPC rules have "the effect of law and are incorporated into the employment contract." Thus, the COA reasoned, the SPC entered into a valid employment contract with plaintiffs.

Defendants acknowledged that the SPC rules governed temporary employees and that plaintiffs were hired for temporary appointments which exceeded twelve months. Therefore, the COA held, there was a breach of the rules under which the contract was formed. However, Plaintiffs did not point to any regulation that specifically entitled them to the benefits of permanent employees. The COA remanded the case for a determination of plaintiffs' rights under the SPC rules as well as a determination of the terms of the employment contract.