Can a North Carolina town hire a private company police agency, by contract, to act as the town's police force on public streets and inside private businesses, or are those officers limited to their employer's own property?
Plain-English summary
Newton Grove, a small town in Sampson County, had no police department. Instead of hiring its own officers under the usual statute (G.S. § 160A-281), the Town signed a contract with North Carolina Security Personnel ("NCSP"), a private "company police" agency. NCSP officers then began arresting people, writing tickets, and performing other police duties on the public streets and inside private businesses around town, just as a regular municipal police department would.
The District Attorney for the 5th Prosecutorial District, G. Dewey Hudson, asked the Attorney General whether that arrangement was lawful. AG Mike Easley's office answered no. The company police statute (N.C.G.S. § 74E-6(c)) limits company police officers to enforcement on three categories of real property: their employer's own property; property of a third party that has hired the employer to provide on-site security; and any other real property, but only when the officer is in continuous, immediate pursuit of someone for an offense committed on the first two. Streets, sidewalks, and unrelated private businesses do not fit any of those categories.
The Town tried to bridge the gap by arguing that the NCSP officers were also "employees" of the town. The AG rejected that too. Citing prior advice (50 NCAG 94, 1981), the office reaffirmed that G.S. § 160A-281's reference to a city "appointing a chief of police and employing other police officers" contemplates a direct employer-employee relationship, not a service contract with a private agency. Because the officers continued to be paid by and report to NCSP, they were not city employees; they remained company police; and they had no authority on the streets and private businesses of Newton Grove.
The conclusion: any enforcement action those officers took outside NCSP's contracted real property was unlawful.
Currency note
This opinion was issued in 2001. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
In particular, Chapter 74E (the Company Police Act) has been amended several times since 2001, and court decisions interpreting the territorial limits of company police have continued to develop. The general principle the AG stated, that company police are creatures of their employer's property and cannot serve as a substitute municipal police force, has held up in subsequent case law, but the precise statutory text and exceptions should be re-checked against the current N.C.G.S.
Common questions readers actually have
What is a "company police" officer in North Carolina, exactly?
A company police officer is a privately employed officer who has been certified by the Attorney General's Office under Chapter 74E. The point of Chapter 74E is to let businesses (hospitals, large universities, railroads, security companies serving private clients) put trained, armed, sworn officers on their own property without making them sheriff's deputies or municipal police. Company police are not free-floating police; they are tied by statute to specific real property.
So what could the NCSP officers lawfully do in Newton Grove?
Whatever NCSP was contracted to do on specific real property. If NCSP had a contract to provide security at a particular business or industrial site in or near Newton Grove, the officers had full law enforcement authority on that property. They could also continue an arrest into adjacent areas if they were in continuous, immediate pursuit of someone who committed an offense on that property. What they could not do was patrol the public streets generally or enforce laws inside businesses they were not hired to protect.
Why couldn't the Town just call NCSP officers "town employees" and solve the problem?
Because G.S. § 160A-281 had been read for decades to mean a direct employer-employee relationship. The Town didn't hire the individual officers, set their pay, supervise them, discipline them, or pay their benefits. NCSP did. The Town paid NCSP under a contract. That is the textbook definition of an independent contractor relationship, not an employment relationship. Calling it something else didn't change what it was. The AG cited an earlier opinion (50 NCAG 94, from 1981) for the same proposition.
Could Newton Grove have legally outsourced policing in some other way?
Yes. G.S. § 160A-282 allows cities to enter into interlocal agreements with other cities or with counties for police services. So Newton Grove could have contracted with a neighboring municipal police department or with the Sampson County Sheriff's Office to police the town. That kind of arrangement uses public officers who already have territorial authority across the appropriate area. What it could not do was substitute private company police for that public structure.
What happened to people arrested or cited under the unlawful arrangement?
The opinion does not say. As a general matter under North Carolina law at the time, an arrest made without lawful authority could be challenged, and evidence obtained from such an arrest might be suppressed. That would have been the DA's call, case by case.
Background and statutory framework
G.S. § 74E-6(c): the territorial-jurisdiction provision
The statute as it stood when the opinion was issued limited a company police officer's law enforcement authority to:
- Real property owned by or in the possession and control of their employer;
- Real property owned by or in the possession and control of a person who has contracted with the employer to provide on-site company police security personnel services for the property; and
- Any other real property while in continuous and immediate pursuit of a person for an offense committed upon property described in (1) or (2).
That is a tight cordon. The legislature wrote it that way on purpose: to keep company police from drifting into general policing.
G.S. § 160A-281: how cities employ police
The statute authorizes a city to appoint a chief of police and employ other police officers. The AG's longstanding reading, going back at least to 50 NCAG 94 (1981), is that "employ" means employ. A city can hire individual officers, or it can join interlocal arrangements with other governments under G.S. § 160A-282, but it cannot delegate the entire police function to a private company under a service contract.
The signing officials
The opinion was signed by James J. Coman, Senior Deputy Attorney General for Law Enforcement and Prosecutions, and John J. Aldridge, III, Assistant Attorney General in the Law Enforcement Liaison Section.
Source
Original opinion text
(1) Real property owned by or in the possession and control of their employer.
(2) Real property owned by or in the possession and control of a person who has contracted with the employer to provide on-site company police security personnel services for the property.
(3) Any other real property while in continuous and immediate pursuit of a person for an offense committed upon property described in subdivisions (1) or (2) of this subsection.
(emphasis added). N.C.G.S. § 74E-6(c).
It is clear therefore that company police officers are limited to exercising law enforcement authority only on the real property of their employer. Unless the company police officers are in continuous and immediate pursuit of a person for an offense committed upon this real property, the officers lack the territorial jurisdiction to take law enforcement actions on the streets and highways in and around this real property. Assuming the contract between NCSP and the Town is lawful, the NCSP officers would lack law enforcement authority on the streets and private businesses in the Town.
Your letter references an attempt by the Town to pursue a direct employer-employee relationship with some of the officers of NCSP and seek independent certifications for the officers. However, it would appear that the officers are not acting as employees for the town of Newton Grove, and are continuing to serve under the authority of a contract between the Town and NCSP. North Carolina General Statute 160A-281 authorizes a city to "appoint a chief of police and to employ other police officers. . ." This office has interpreted this language to contemplate a direct employer-employee relationship between the city and the officers rather than a contractual arrangement with a company police officer agency and the city. See: 50 NCAG 94 (1981). Consequently, the law enforcement actions of these company police officers, on the streets and private businesses in and around the town of Newton Grove, cannot be justified as the company police officers are not employees of the city.
Therefore, it is our opinion that any enforcement actions taken by company police officers for NCSP, while acting pursuant to a contract between their agency and the town of Newton Grove, on the streets and private businesses of Newton Grove are unlawful.
We hope you find this information responsive to your inquiry. This is an advisory opinion. It has not been reviewed and approved in accordance with the procedures for issuing a Formal Attorney General's Opinion.
Very truly yours,
James J. Coman
Senior Deputy Attorney General
Law Enforcement and Prosecutions Division
John J. Aldridge, III
Assistant Attorney General
Law Enforcement Liaison Section