Continuing our series examining the development in South Carolina of the employee handbook case law, we turn to a case captioned Toth v. Square D Co., a 1989 SC Supreme Court case in which the Supreme Court was referred the question of whether the Smalls holding would be extended to employees’ claims of wrongful termination that arose prior to the court’s opinion in Smalls. Toth and 14 other cases were consolidated by the U.S. District Court and the question was certified to the SC Supreme Court:

Is the holding in Small v. Springs Industries, Inc., to be given retroactive effect so as to permit a plaintiff whose employment was terminated before June 8, 1987,the date the Small opinion was filed, to bring an action for breach of contract based on the provisions of an employee handbook?

The Supreme Court answered the question, “Yes” - the plaintiffs were allowed to bring suits based on actions preceding the Smalls opinion. The Court reasoned that Smalls really didn’t make “new law,” per se - that the question was really more one of evidence, than of a new cause of action.  Thus, the normal “rule” against giving new holdings retroactive did not apply. As the Court said:

The use of employee handbook provisions in the construction of an employment relationship is not a novel idea. In fact, introduction of such provisions has previously been allowed in a pro-employer setting. This Court previously upheld the dismissal of an employee because a handbook provision allowed “any employee [to be] dismissed or suspended by the city manager.”  Our Court of Appeals has also upheld consideration of handbook provisions in the construction of an employment relationship. In light of these past decisions upholding consideration of handbook provisions to construe employment contracts, respondents’ claim that the Small decision was totally unforeshadowed is untenable.