When a small NC town contracts with a private 'special police' company instead of hiring its own officers, can those private officers enforce traffic laws on town streets?

Plain-English summary

In the late 1990s and 2000s, some NC small towns experimented with contracting private companies to provide policing services on the cheap. The Town of Newton Grove had contracted with North Carolina Special Police (NCSP), a private firm whose officers hold "company police" commissions under Chapter 74E of the General Statutes. The NCSP officers were patrolling Newton Grove's streets, issuing traffic citations, and otherwise acting like municipal police. District Attorney G. Dewey Hudson asked the AG whether that arrangement was legal.

Senior Deputy AG James J. Coman and Assistant AG John J. Aldridge, III answered no.

Two paths, two scopes of authority. A company police officer derives authority from Chapter 74E, which is geographically tight: the officer's law enforcement powers are limited to the real property of their employer or the entity their employer has contracted with. § 74E-6(c). Off that property, the officer has no law enforcement authority unless in "immediate and continuous pursuit" of someone for an offense committed on the property.

A municipal police officer derives authority from Chapter 160A and Chapter 17C, which is geographically broad: the officer can enforce state law throughout the city's territory. But to be a municipal police officer, there has to be a genuine employer-employee relationship between the city and the officer, not a contract with a third-party staffing company.

The town contract didn't change anything. The Town pointed to § 160A-20.1, which lets towns contract with corporations to carry out any public purpose the town is authorized to perform. The AG agreed Newton Grove could contract with NCSP. But the AG read § 160A-20.1 as a general authority that didn't override the specific limits of Chapter 74E. State v. Leeper establishes the canonical rule that specific statutes control over general statutes. § 74E-6(c) is specific about company police officer authority; § 160A-20.1 is general. The specific wins.

No real employer-employee relationship. The AG then looked at whether the NCSP officers could be considered "employees" of the Town under § 160A-281. The answer was no, for several reasons:
- No employment contract existed between the Town and the individual officers.
- The only agreement was between the Town and NCSP.
- The Town's contract with NCSP released the Town from claims and indemnified NCSP "agents and employees," language inconsistent with the officers being Town employees.
- The Town had no power to hire or fire the officers.
- The Town did not supervise their work or set schedules.
- The Town did not maintain employment records or set pay.
- The officers' primary source of income was NCSP, not the Town.
- The Town did not even appear to control which officers were assigned.

The AG drew on the IRS Classification Training Manual and NC Workers' Compensation case law for the totality-of-circumstances test. The factors decisively cut against an employer-employee finding. The fact that the Town provided uniforms and patrol cars was not enough.

Auxiliary police argument also failed. The Town's attorney tried to recast the NCSP officers as "auxiliary police officers" under § 160A-282(a). That provision lets cities create auxiliary departments of "volunteer members." Two reasons that didn't work:
- The Town had no ordinance creating an auxiliary department. The AG had reviewed Newton Grove Board of Commissioners minutes from May 2000 forward and found no such action.
- Even if an ordinance existed, NCSP officers are not volunteers. They are paid for their services (by NCSP, not the Town, but paid nonetheless). Black's Law Dictionary defines volunteer as "[a] person who gives his services without any express or implied promise of remuneration." NCSP officers were not volunteers.

The consequences for prior citations. The opinion concluded with sobering news for prosecutions: "Any citations issued by the NCSP officers outside their territorial jurisdiction as set out in N.C.G.S. § 74E-6 are unlawful." Citing State v. Matthews and State v. Williams, the AG observed that an illegal arrest may not prevent subsequent lawful prosecution. But the citations themselves were void, and any pending cases would require a different lawful charging mechanism.

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. Chapter 74E was amended in subsequent years to refine company police authority. The General Assembly may have added or refined explicit territorial-extension provisions for certain configurations. Anyone facing a similar arrangement today should check the current text of Chapter 74E, Chapter 160A, and Chapter 17C.

Background and statutory framework

Company police under Chapter 74E. Created to authorize on-site police security personnel services for private property. Each company police officer is sworn and trained, but the officer's law enforcement authority is sharply territorially limited under § 74E-6(c):
- Real property of the employer; or
- Real property in the employer's possession and control; or
- Real property of an entity that has contracted with a company police agency.

Plus the "immediate and continuous pursuit" carve-out under § 74E-6(c)(3), which lets the officer follow a suspect off the protected property when the underlying offense was committed on the property.

Municipal police under Chapters 160A and 17C. A municipal officer is employed by the city under § 160A-281 ("A city may by ordinance . . . appoint a chief of police and employ other police officers"). The officer's territorial jurisdiction is the entire city, and the officer can enforce state law within that jurisdiction. § 17C-2 anchors the certification framework, defining "criminal justice agencies" as "[t]he State and local law-enforcement agencies" and "criminal justice officers" as "[t]he administrative and subordinate personnel of . . . criminal justice agencies who are sworn law-enforcement officers, both State and local."

Auxiliary police under § 160A-282(a). A city "may by ordinance provide for the organization of an auxiliary police department made up of volunteer members." Two prerequisites:
- An ordinance must establish the department.
- Members must be volunteers (no remuneration).

§ 160A-20.1 (contracting authority). Towns can contract with corporations for public purposes. But the AG read this as a general grant that cannot expand statutory limits on contracted parties' authority. State v. Leeper supports the canon that specific statutes (here, § 74E-6(c)) control over general ones (§ 160A-20.1).

NC Constitution Art. VII, § 1. Sets the constitutional framework for local government powers. The Town cannot grant authority greater than that provided by statute.

Employer-employee test factors. The AG cited the IRS Classification Training Manual and NC Workers' Comp case law for the multi-factor test:
- Existence of an employment contract directly with the officer.
- Power to hire and fire.
- Supervision and control of work.
- Setting work schedules.
- Maintenance of employment records.
- Determination of pay rate and method.
- Officer's dependence on the entity for continued employment.
- Control over assignment of personnel.

Provision of uniforms and equipment is one factor but not dispositive.

Illegal arrest doctrine. Matthews and Williams establish that an illegal arrest does not necessarily bar prosecution: the underlying charges may still be brought lawfully through other procedures. But the original citation issued without authority is itself void.

Common questions

Q: Could the Town fix the problem by hiring the NCSP officers directly?

A: The AG concluded yes. If the Town directly employed officers under § 160A-281, with a real employer-employee relationship (hire/fire authority, supervision, schedules, payroll, etc.), those officers would have full municipal police authority within the Town's territory. The Town would need to make that genuine, not just paper over the existing NCSP contract.

Q: Could the NCSP officers function as auxiliary police?

A: The AG concluded no, for two reasons. First, the Town had not adopted an ordinance creating an auxiliary department. Second, even if it did, NCSP officers are not volunteers; they are paid (by NCSP, but paid). § 160A-282(a) requires volunteers.

Q: What happens to traffic citations the NCSP officers issued?

A: The AG concluded those citations are unlawful because the officers lacked territorial jurisdiction to issue them. The prosecution can develop another lawful method to charge the underlying offenses (a sworn officer of the proper jurisdiction can bring fresh charges), but the citations themselves are void.

Q: Can NCSP officers still operate on private business property they're hired to patrol?

A: Yes. The opinion does not disturb company police authority on real property of the employer or contracted entity. NCSP officers patrolling, say, a private shopping center where their company has a contract retain full company police authority on that property under § 74E-6(c).

Q: Why does NC distinguish between contracting with a police-services company and hiring police officers directly?

A: Two structural reasons. First, the General Assembly's statutory scheme grants different scopes of authority to differently-situated officers. Company police are designed for property-specific protection; municipal police for territorial enforcement. Second, the employment relationship matters because it brings the officer into the city's chain of command, training requirements, civil service protections, and public accountability mechanisms. A contracted private company sits outside that framework.

Q: Did the AG suggest the General Assembly amend the law?

A: Not directly. The opinion treats the existing statutes as clearly answering the question. The AG just applied them.

Citations from the opinion

• N.C. Gen. Stat. §§ 17C-2(b), 17C-2(c), 74E-6, 74E-6(c), 160A-20.1, 160A-281, 160A-282(a), 160A-284
• Chapter 74E of the General Statutes
• N.C. Const. Art. VII, § 1
• State v. Leeper, 59 N.C. App. 199, 296 S.E.2d 7 (1982), cert. denied, 307 N.C. 272, 299 S.E.2d 218 (1982)
• North Carolina v. Matthews, 40 N.C. App. 41, 251 S.E.2d 897 (1979)
• State v. Williams, 31 N.C. App. 237, 229 S.E.2d 63 (1976)

Source

• Landing page: https://ncdoj.gov/opinions/territorial-jurisdiction-of-company-police-officers/

Original opinion text

Reproduced from the NCDOJ landing page. The linked landing page is authoritative.

FIRST CLASS MAIL

March 6, 2001

Mr. G. Dewey Hudson, District Attorney, Fourth Prosecutorial District, Sampson County Courthouse, Clinton, NC 28328

Re: Advisory Opinion: Territorial Jurisdiction of Company Police Officers

Dear Dewey:

Thank you for your letter of February 9, 2001, concerning the territorial jurisdiction of the company police officers patrolling in and around the town of Newton Grove (Town). We are happy to respond. This letter will also serve to compliment our previous Advisory Opinion of February 7, 2001 on this topic.

At the outset, it is important to distinguish between the two issues presented in this matter. The first concerns the ability of the Town to contract with North Carolina Special Police (NCSP) for law enforcement services. The second issue concerns the Town employing individual law enforcement officers pursuant to N.C.G.S. § 160A-281.

North Carolina Special Police officers hold commissions as company police officers under Chapter 74E of the General Statutes and may serve the Town under contract with NCSP. This option however presents significant jurisdiction limitations. Conversely, these officers, as individuals, may be certified as law enforcement officers for the town of Newton Grove pursuant to Chapters 17C and 160A of the General Statutes. The jurisdiction and authority of these officers in any particular situation is, therefore, derived from the capacity in which they are working at the time.

Contracting with Company Police Agencies

North Carolina G.S. § 160A-20.1 allows towns to enter into contracts with corporations to carry out any public purpose that the town is authorized to perform. Accordingly, it is possible for the Town to enter into a contract with NCSP. However, the power and authority of the police officers pursuant to this contract is determined by State law and the Town cannot grant greater authority than that provided by statute. N.C. CONST. Art. VII, §1. "[W]here one statute deals with a subject in detail with reference to a particular situation . . . and another statute deals with the same subject in general and comprehensive terms . . ., the particular statute will be construed as controlling in the particular situation unless it clearly appears that the General Assembly intended to make the general act controlling in regard thereto." State v. Leeper, 59 N.C. App. 199, 296 S.E.2d 7 (1982), cert. denied, 307 N.C. 272, 299 S.E.2d 218 (1982). In this case, N.C.G.S. § 74E-6(c) specifically describes the authority and jurisdiction of company police officers. There is no evidence to suggest that the General Assembly intended the general authority granted by N.C.G.S. §160A-20.1 to trump the specific authority set forth in § 74E-6(c).

It is clear from N.C.G.S. § 74E-6(c) 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. Thus, assuming the agreement between NCSP and the Town is lawful, the NCSP officers lack law enforcement authority on the streets and private businesses in the Town.

For the officers in question to have the jurisdiction and authority to operate as Newton Grove police officers, as they are currently holding themselves out, they must do so as police officers certified pursuant to Chapters 17C and 160A of the General Statutes.

Employing Law Enforcement Officers

North Carolina G.S. § 160A-281 authorizes a city to "appoint a chief of police and employ other police officers." (Emphasis added). This office has consistently interpreted this language to contemplate a direct employer-employee relationship between the officers and the town. N.C.G.S. §17C-2(b) and (c) supports this interpretation. N.C.G.S. §17C-2(b) defines "criminal justice agency" as "[t]he State and local law-enforcement agencies." "Criminal justice officers" are specifically defined as "[t]he administrative and subordinate personnel of . . . criminal justice agencies who are sworn law-enforcement officers, both State and local . . ." (emphasis added).

Therefore, we are left to determine whether the officers in question are truly employees of the Town as contemplated by N.C.G.S. § 160A-281. In making this determination, we looked at the nature of the relationship between the Town and the individual officers.

No employment contract exists between the Town and the officers. The only existing agreement appears to be between the Town and NCSP. This in itself seems to refute a direct employer-employee relationship and therefore denies the officers of the jurisdiction allowances of municipal police officers. The purported "contract" itself is poorly drafted and vague regarding the nature of the relationship between the Town and the officers. While the agreement alone is not determinative of the issue of employment status, it does provide some insight into the parties' intent.

Paragraph (b) of the agreement states that the Town "[f]ully and forever release(s) and discharge(s) (NCSP), its' agents and employees, from any and all claims . . . arising out of (the Town) receiving services of (NCSP)". (emphasis added). Pursuant to paragraph (c), the Town agrees to indemnify and hold harmless NCSP, "its' agents and employees, for any acts or conduct . . . while in, on or about . . . the premises or property . . . of (the Town) . . ." (emphasis added). Paragraph (e) grants authority to "any sworn officer of (NCSP) . . . to execute any duty or authority empowered . . . by law upon any property owned by, or in the possession and control of (the Town) . . ." Pursuant to paragraph (g), the parties agree that any "external request for information received by (the Town) concerning (the) relationship between (NCSP) and (the Town), shall be referred to (NCSP) for resolution, unless the (Town) is otherwise compelled by law." In addition, paragraph (f) clearly provides for compensation for services rendered by these officers to be to NCSP and not the individual officers.

The agreement does not state, or even imply, that the Town will have any supervisory authority or control over the officers. In fact, the agreement goes to some lengths to distance the "agents and employees" of NCSP from the Town. As shown above, the agreement goes so far as to release these officers from all claims associated with the performance of their duties and the Town agrees to hold harmless the employees of NCSP for any conduct while on the job. Certainly, these provisions are not indicative of an employment relationship.

The agreement aside, we are left to examine the nature of the relationship, and any indications of employee status, between the Town and the individual officers. In determining the proper indications of an employment relationship we reviewed several authorities, including the Internal Revenue Service Classification Training Manual and North Carolina Workers' Compensation case law.

These authorities set out that a totality of the circumstances need to be evaluated to determine if an employment relationship exists. Reviewing the circumstances as they now exist in Newton Grove, we are unable to discern an employer-employee relationship using any criterion. In fact, the circumstances and contract indicate that the Town and NCSP intended not to create an employer-employee relationship. Consequently, the officers are serving as NCSP officers and not municipal police officers.

It is true the Town provides the officers with uniforms and patrol cars. However, all other objective factors that would go to show an employment relationship are absent. For example, based on the information we have, the Town has no power to hire or fire the officers who patrol Newton Grove. The Town does not supervise the officers in the performance of their duties, nor does the Town supervise or control the officers work schedules. The Town does not maintain any employment records for the officers or determine the rate or method of payment of the officers.

The officers are not dependent on the Town for continued employment. Their primary source of income is NCSP. In fact, under the terms of the above-referenced agreement, it does not appear that the Town even has control over which officers from NCSP are assigned to patrol Newton Grove.

NCSP Officers as Auxiliary Police

The Town's attorney, Mr. Sutton, analogizes the NCSP officers as auxiliary or reserve police officers for the Town. This position, in our opinion, is not supported in fact or law.

North Carolina G.S. §160A-282(a) states that "[a] city may by ordinance provide for the organization of an auxiliary police department made up of volunteer members." However, even reserve or auxiliary police officers are responsive to and report to municipal officials.

Presently, we do not have any information which indicates that the Town has, by ordinance, established an auxiliary police department. A review of the minutes from the Newton Grove Board of Commissioners meetings from May 2000 to the present, failed to disclose that the Board of Commissioner has ever discussed establishing an auxiliary police department.

Assuming arguendo, that the Town did enact the necessary ordinance, the officers do not, in our opinion, qualify as auxiliary police officers. Black's Law Dictionary defines volunteer as "[a] person who give his services without any express or implied promise of remuneration." The officers in question are, most assuredly, not volunteers. They do not serve Newton Grove out of some sense of civic pride or duty. To the contrary, they serve Newton Grove pursuant to a contract between the Town and NCSP and are paid for their services by NCSP. The fact that the Town does not write these officers a check does not mean they work for free. If anything, this arrangement highlights the lack of any employment relationship between the Town and the officers.

Conclusion

In summary, it is our opinion the officers serving the Town are employees of NCSP and are therefore limited in their territorial jurisdiction to those areas espoused in N.C.G.S. § 74E-6. The officers are not properly municipal police officers of the Town as envisioned by N.C.G.S. §§ 160A-281, 282, 284 and 17C-2. Therefore, the officers may not hold themselves out as Town officers or enforce State law on the streets and highways of the Town.

The officers' status as NCSP officers impacts on the validity of any citations they have issued. As a general rule, "where arrests are regulated by statute, an arrest which does not comply with the statute is illegal." North Carolina v. Matthews, 40 N.C. App. 41, 251 S.E.2d 897 (1979), cf. State v. Williams, 31 N.C. App. 237, 229 S.E.2d 63 (1976). The courts have ruled however that an illegal arrest may not prevent the subsequent lawful prosecution of the defendant.

Therefore, any citations issued by the NCSP officers outside their territorial jurisdiction as set out in N.C.G.S. § 74E-6 are unlawful. A prosecution of the charges may be subsequently possible, but another method of lawfully charging the individuals will have to be developed.

We hope you find this letter 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

JJC/pa