As a united voice for businesses in North Carolina, including the many NC Chamber members who are heavily regulated by numerous state agencies, the NC Chamber Legal Institute (“CLI”) took an interest in a case pending before the NC Supreme Court last year. In October, the Court issued its opinion, and it is clear that the CLI has helped achieve a win for the business community and the rule of law in North Carolina.

Ordinarily, the CLI would not follow the wranglings of a university professor and his HR department. But Mitchell v. UNC Board of Governors caught our attention over two years ago.  Dr. Mitchell, a tenured professor, was terminated from his position at Winston-Salem State University, accused of failing to manage his course load effectively and making unpopular remarks about perceived racial bias in academia. He challenged his termination through the University’s internal appeal process but was unsuccessful. He then appealed to the university board of trustees appeals committee, the UNC Board of Governors Committee on Personnel and Tenure, and Forsyth County Superior Court, losing at each level.

The Court of Appeals affirmed the trial court, but Judge Hunter Murphy dissented, providing a lengthy First Amendment analysis of whether Dr. Mitchell’s speech on racial bias could be an adequate legal basis for termination. While these facts might not typically garner CLI’s attention, the case also squarely presented the issue of agency deference, not very long after the U.S. Supreme Court’s watershed decision in Loper Bright. Specifically, Mitchell teed up the question of whether the Court of Appeals should defer to the University’s interpretation of the UNC Code, its own regulatory guidebook.

The CLI joined with North Carolina Farm Bureau Federation, Inc. and filed an amici curiae brief which summarized the tortured and disjointed history of agency deference in North Carolina. And when we say we “joined,” we mostly mean we let Jake Parker, the Farm Bureau’s lead in-house counsel and its corporate secretary, have the pen while we cheered loudly.  The brief respectfully asserted that the concept of deference runs counter to the structure of North Carolina’s State Constitution. Ultimately, the brief urged the Court to eliminate any vestige of agency deference in North Carolina law. This is important because agency deference can unfairly tilt the interpretation of statutes and regulations in the government’s favor. Similarly, deferring to agency interpretations usurps the role of the judiciary.  As Justice Gorsuch wrote in a concurring opinion in the United States Supreme Court case Kisor v. Wilkie (2019), “[w]hen we defer to an agency interpretation that differs from what we believe to be the best interpretation of the law, we compromise our judicial independence and deny the people who come before us the impartial judgment that the Constitution guarantees them.”

The NC Supreme Court agreed with the Farm Bureau and CLI. The Court’s majority opinion, authored by Justice Richard Dietz, noted that the Court “allowed discretionary review in this case to clarify the appropriate standard of review when construing the meaning of state rules and regulations.” The Court further stated that while

a state agency’s interpretation of its own rules or regulations can inform a court’s judgment and aid in ascertaining the meaning of the law . . . the agency’s interpretation is never binding. [ ] We expressly disavow any interpretive rule requiring courts to defer to a state agency’s interpretation of state rules and regulations, overrule any previous Court of Appeals case law to the contrary, and instruct all lower courts to apply traditional de novo review to the interpretation of state rules and regulations.

Mitchell v. Univ. of N.C. Bd. of Governors, ___ N.C. ___, No. 121A23, slip op. at 2–3 (N.C. October 17, 2025). 

In its reasoning, the Court adopted the Farm Bureau and CLI’s argument that the de novo standard of review is compelled by the judiciary’s constitutional role. The Court clarified that the deference discussion in other cases cited by the Court of Appeals was a mistaken interpretation of those cases and it took the 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.”

Put simply, the legal doctrine of agency deference, sometimes called “administrative deference,” is dead in North Carolina. This is a huge win for NC businesses, as private litigants are now on equal footing with government agencies in arguing over the meaning of state rules and regulations. Post Mitchell, when there are disputes over an agency’s interpretation of regulations, if that dispute winds up in court, the court is not required to defer to the agency’s interpretation of the regulation at issue. Instead, it must review the interpretation of the regulation impartially, applying the best meaning without placing a thumb on the scale in the government’s favor. This marks another milestone in the Newby court’s efforts to improve the legal climate in North Carolina, and the CLI was pleased to successfully voice its views on your behalf. We are also very grateful for and proud of the collaboration with the NC Farm Bureau and look forward to more of the same.