Last week, we kicked off our series on Employee Handbook Cases in South Carolina with this post. Today, I’d like to continue the discussion with a look at how the cause of action based on employee handbooks got started.

First, some background: We discussed in the last post the concept of “employment at will” - which allows you, or your employer, to terminate the relationship without incurring liability for damages or breach, for any reason - “a good reason, a bad reason, or no reason at all.” We talked too about how the doctrine of at-will employment became limited by continued chipping away at the “bad reason” part of that equation, through the “public policy” exception at first, then by statutes that protected employees from retaliatory firings and discriminatory treatment. These new rights, however, were continually seen as exceptions to the basic rule - that of employment at-will.

To fully understand the handbooks cases, you need first to understand the concept of an employment contract. It is this concept that stands as the other end of the spectrum from employment at-will. Whereas an “at-will” employee can quit at any time (or be fired at any time), an employee under contract is not so free. She must abide by the terms of her contract, and if she quits prior to the end of the term of that contract, in situations that are not permitted for termination under the contract’s specific provisions, then the employee is liable to the employer for breach of contract. And any damages that result from that breach, the employee is (theoretically, at least) on the hook for paying to the employer. The same is true in reverse. Most employment contracts call for firing “for cause” only - that is to say, the employee must commit some overt act that is not acceptable under the terms of the contract. Only upon the happening of that act may the employer discharge the employee before the end of the contractual term. Otherwise, the employer is liable to the employee for the lost wages and any other damages that flow particularly from the breach (with certain limits).

Now, we see the utility of the handbook in the at-will scenario. While an employee at-will can be fired for any reason or no reason, the employee under contract must be fired for a specific reason - a particular bad act, that must be spelled out and established to some degree. The contract protects both parties, but in the event of an employee termination, the contract employee has greater rights than the at-will employee, clearly. The handbook steps in as a quasi-contract.

This makes sense to most employees. After all, if the employer takes the time and effort to publish its expectations of the employee in written format, shouldn’t the employer be expected to abide by the same? It’s only fair. Or at least, it seems that way. Unfortunately, however, courts don’t readily accept handbooks as contracts, without certain criteria being present. Simply put: employee handbooks, without specific promissory or mandatory language, aren’t the same thing as contracts.

So, in order to protect the employee from the whims of the employer which publishes its handbooks in an expectation of reaping the benefits therefrom, but then expects to squirrel out from under its obligations, the handbook cases establish a cause of action for some terminated employees to rest their claims of wrongful discharge upon. In the next post, we’ll start looking at the specific cases that illuminated this approach.