This post is the first in a weekly series of posts regarding the state of the law in South Carolina concerning breach of contract employment actions based on the provisions contained in employment handbooks.

The South Carolina Supreme Court and Court of Appeals have issued several opinions in this type of case over the last few decades or so; a search for “employee handbook” & “breach of contract” in SC Cases on Casemaker (a legal research program available to members of the South Carolina bar) revealed 34 cases, starting with Smalls v Springs Industries way back in 1987 through this past June (2006) with Grant v Mt. Vernon Mills, decided by the Court of Appeals. In many cases, the case holdings helped elucidate the rules for when and under what circumstances a handbook would be deemed to be a contract between employee and employer, thus allowing the employee to maintain a breach of contract action upon termination. However, in other cases, the opinions seemed to muddy the waters. Opinions were divided as to what constituted an effective disclaimer, when language was suitably mandatory as to constitute a promise, when a provision was too vague and elusive to be anything more than merely aspirational policy - all issues critical to the question of whether a plaintiff’s case gets to the jury.

We start in SC, as in many states, with a presumptive circumstance called employment at will. Barring an actual contract, negotiated in good faith and with particular terms and an exchange of consideration, employees are said to work “at will” - both at their will, and at their employer’s will. What this means practically is that the employee is free to quit at any time, without owing anything to the employer for the future days the employee won’t work (as he or she conceivably may in a breach of a typical contract, in the form of damages for breach). But, concurrently, “at will” also means that the employer is free to fire the employee at any time - “for any reason, a good reason, a bad reason, or no reason at all” as it’s frequently phrased.

But then that “bad reason” part of the equation began getting chipped away - both by civil rights statutes (i.e., Title VII, protecting against discrimination on the basis of sex, national origin, race, or other protected grounds), other anti-discrimination statutes (i.e., the Americans with Disabilities Act, the Age Discrimination in Employment Act), and by something called the “public policy” exception (which prohibited employers from acting against the public interest, in very limited circumstances, in firing employees - such as, due to the employee’s testimony in a worker’s comp case, or because the employee served on jury duty despite her boss’s injunction to “get out of it”).

Then the handbook cases began. These cases rested on a fundamental fairness issue - namely, was it fair for employers to claim the protections of the employee handbook, with its mandated rules and regulations, if it was allowed simultaneously to escape its obligations under that same handbook? Most early cases focused on the progressive discipline systems many employers adopted in their handbooks. Basic facts - employee makes a mistake, employee is fired instead of given a warning, employee learns other employees were given warnings, employee sues - met with increasingly complex rules - disclaimers in a certain typeface, placed in a particular position - and confusion resulted.

We’ll start examining these cases in their specifics tomorrow.