The federal lawsuit was filed by People for the Ethical Treatment of Animals, the Center for Food Safety and other groups. The groups argue the law violates constitutional free-speech and equal protection rights.
State legislators passed the law last summer over the veto of Republican Gov. Pat McCrory.
Opponents say the law was passed to end hidden-camera exposes of animal cruelty at farms or meat-packing plants and could intimidate other employees who report misdeeds, like elder abuse at nursing homes.
“The statute’s central targets are whistleblowers, such as investigative journalists and activists engaged in undercover investigations,” the lawsuit said.
The North Carolina Chamber pressed for the legislation, saying more protections were needed against thefts of intellectual property.
The law lets an employer sue and get monetary damages from someone who gains access to nonpublic areas of a company without authority and commits theft or sets up a camera or audio recorder. Some civil damages would be $5,000 penalties for each day the law is violated.