Worker sought equity stake for capital-raising work, but court found he was never employed to do it
A grocery chain employee's push for stock compensation failed after North Carolina's highest court found no evidence he was employed to do the claimed work.
On March 20, 2026, the Supreme Court of North Carolina affirmed a lower court decision that raised questions about when an employee's work falls under the state's Wage and Hour Act – and when it does not.
James Talley held a $50,000 salaried position at Earth Fare. At some point, he went to the company with a proposal. He wanted to raise capital for the business, and in return, he wanted a significant equity stake in the company, a seat on the board of directors, an ownership interest for his son, and other perks the company had extended to outside business partners. He described it as a new "deal" – separate from his existing role.
Earth Fare never agreed to those terms. Talley did the work anyway. His efforts were described at trial as instrumental in securing a deal with investor Dan Larimer. When the compensation he expected never came, he sued Earth Fare and Dennis Hulsing under the North Carolina Wage and Hour Act, alleging they failed to pay him the promised stock, stock options, and other compensation for his capital-raising work.
The case was tried before a jury in Buncombe County after being designated a mandatory complex business case. The Business Court instructed the jury to first determine whether there was a meeting of the minds about employing Talley to do this work. If the jury found there was not, it was told not to consider the Wage and Hour Act claim. The jury found no such agreement existed and never reached the wage question. It did, however, find that Hulsing was unjustly enriched by Talley's work and awarded Talley $195,000 on that claim.
Talley moved for judgment notwithstanding the verdict on his Wage and Hour Act claim or, alternatively, a new trial. The Business Court denied both motions. Talley appealed, arguing his wage claim should have been evaluated independently.
The Supreme Court affirmed.
Justice Dietz, in a concurrence, explained the reasoning. Talley was not asking for a raise or an expanded role. He was proposing an independent business arrangement – the same kind of deal Earth Fare had struck with outside partners, including real estate developers who helped the company secure financing in exchange for ownership stakes. Because no employee at the company had ever done this type of work, the court found that Talley's only evidence that he was employed to do it was the proposed deal the jury had already determined was never agreed to. Dietz emphasized that the decision does not require a written employment contract for a Wage and Hour Act claim. The issue was simply whether Talley was employed to do the work at all.
Dietz also raised a practical concern. If the court ruled otherwise, employees could propose extra work in exchange for equity, have the employer decline, do the work anyway, and then use the Wage and Hour Act to demand part-ownership of the company.
Justice Riggs, joined by Justice Earls, saw it differently. In a partial dissent, Riggs argued that the Wage and Hour Act does not require an underlying contract. The statute defines wages to include compensation that is promised where the employer has a policy or a practice of making such payments. Riggs pointed to trial testimony showing that Earth Fare had promised and paid at least two other people stock compensation for their work securing the Larimer deal. That pattern, the dissent argued, should have been enough for the jury to consider Talley's wage claim on its own merits.
Dietz pushed back on this point, noting that those two individuals were not employees. They were real estate developers who owned a shopping center where Earth Fare opened a location. They agreed to help the company obtain financing in exchange for an ownership stake and a commitment to bring an Earth Fare store to their property.
Riggs also pointed to the court's own 2016 decision in Morris v. Scenera Research, LLC, where a worker prevailed on a Wage and Hour Act claim for unpaid patent bonuses despite losing his breach of contract claim and not having a formal employment contract. Affirming the Business Court without addressing that precedent, Riggs argued, only invites further confusion around the law and likely harm to workers in North Carolina.
For HR professionals, the case is a reminder that how compensation arrangements are structured – and who they are extended to – matters under wage statutes. The dissent's reasoning, that a company's pattern of paying certain people for certain work could establish a compensable wage even without a contract, is not settled law in North Carolina. But it is an argument that future claimants will likely rely on. HR teams managing stock-based compensation, bonus structures, or informal arrangements with employees who take on work outside their defined roles should take note.
