Amends GS 126-4 to require the State Human Resources Commission to establish policies and rules governing delegation of authority to an Ombud's Office charged with providing independent review of State employee workplace complaints and assistance to State employees in resolving workplace issues. Requires the Ombud's Office to establish education and training programs for State employees and their supervisors concerning employee rights and appropriate dispute resolution.

Enacts Article 17, Contract Employee Protection, to GS Chapter 126. Provides defined terms for the Article. Establishes that it is against state policy for any State employee to mistreat a contract employee in the government workplace or in connection with a State-controlled project. Defines contract employee to mean an employee of a private third-party employer, as defined, who is assigned to work in a State government workplace or on a State-controlled project. Makes it the responsibility of each supervisor to take reasonable steps to prevent mistreatment of contract employees.

Prohibits State employees from taking or causing a private third-party employer to initiate adverse action against a contract employee in retaliation, and prohibits a private third-party employer from taking an adverse action against a contract employee for retaliation, for the contract employee: (1) making a complaint or providing information in good faith to the NC Department of Labor or the US Departmnet of Labor about possible law law violations by the employer or a State agency, department or institution; (2) testifying in any investigation or other proceeding under state, local or federal law relating to a State government workplace or State-controlled project; (3) exercising any legally protected employee rights; or (4) complaining about workplace bullying in a State government workplace or State-controlled project. Defines adverse action to include reassignment to less desired work location, a reduction in compensation, failure to give promised or customary compensation or work status increase, disciplinary action, more intensive or critical supervision, withdrawal of previously allowed privileges, or assignment of more difficult duties. Defines workplace bullying to mean a persistent pattern of mistreatment from others in the workplace that causes either physical, emotional, or financial harm. Subjects any State employee who violates the prohibition to disciplinary action up to and including termination.

Requires investigation of violations by the NC Department of Labor. Permits civil penalties against a private third-party employer ranging from $1,000 to $20,000 per violation. Makes a private third-party employer determined in violation of the statute to be ineligible to contract with any State agency, department or institution for a period of five years. Establishes a cause of action for the contract employee to bring against the private third-party employer for a violation, and allows for remedies including reinstatement, back pay, and any other relief the court deems appropriate. Requires the prevailing party to also receive attorneys' fees and litigation costs. 

Defines the scope of the Article to include all State employees including those subject to and exempt from the provisions of the State Human Resources Act, GS Chapter 126. Requires the State employer and the private third-party employer to post notice and use other appropriate means to keep all employees informed of their protections and obligations under the Article. Clarifies that the rights and obligations under the Article supplement other rights and obligations under state law. Directs the NC Department of Labor and the Commission to collaborate and adopt rules to implement the Article.