50 Wrongful Discharge
A. Definition
Where an employment contract is silent as to its duration, an employee may be terminated at will by his or her employer for any reason or no reason.1 Several exceptions have been created to the general rule. One arises when the at-will contract is modified,2usually by an employee handbook,3 although the legislature has modified the handbook exception by a statute providing that a handbook does not create an employment contract if it is conspicuously disclaimed.4 Imposition of a probation period does not generally create an employment contract.5
While the language of court decisions has occasionally made it appear that an action based on such a modification of the employment contract is an action for wrongful discharge, it is in fact an action for breach of contract,6 and the plaintiff must allege and prove the elements of a breach of contract to prevail.7 Another exception to the general rule occurs when the plaintiff's employment was terminated in violation of a statutory or constitutional right.8 "When a statute creates a substantive right and provides a remedy for infringement of that right, the plaintiff is limited to that statutory remedy."9
The third exception to the principles of at-will employment was created in Ludwick v. This Minute of Carolina, Inc. ,10 where the court said if termination violates a clear mandate of public policy the plaintiff has a cause of action for wrongful discharge. Unlike the "handbook" exception, wrongful termination, or retaliatory discharge, is a tort action,11 and apparently is not a general tort remedy, but one created to protect employees where no other remedy exists.12 "[A]n employee under an at-will contract with a 30 day notice provision may maintain an action for wrongful discharge in violation of public policy under Ludwick."13 However, contracts for a definite term that require payment of severance in the event of termination without cause provide a remedy for an employee wrongfully discharged and the ability to recover damages in the form of severance ordinarily precludes recovery in a cause of action for wrongful termination based on the public policy exception to the at-will doctrine.14
B. Elements
It does not appear that any South Carolina court has explicitly enumerated the elements of a cause of action for wrongful discharge; however a federal court has identified them as:
(1) termination of the plaintiff
(2) a clear mandate of public policy
(3) the termination was in retaliation for actions protected by that public policy.15
C. Elements Defined
1. Termination of the Plaintiff
To prevail the plaintiff must have been an employee, not an independent contractor or partner, and he or she must have been terminated from that employment.16
2. A Clear Mandate of Public Policy17
The plaintiff must show a clear mandate of public policy.18 In Ludwick the court said a cause of action for wrongful termination would lie where, as a condition of retaining employment, the employer requires an at-will employee to violate the law.19 The definition of what constitutes a public policy for the purposes of the exception to the doctrine of termination at will has been extended to actions constituting legislatively defined "crimes against public policy,"20 but its parameters are as yet unclear. As the South Carolina Supreme Court has said, it has applied "the public policy exception to situations where an employer requires an employee to violate a criminal law, and situations where the reason for the employee's termination was itself a violation of the criminal law, we have never held the exception is limited to these situations."21 In several instances the courts have refused to allow a motion to dismiss where the complaint has presented a "novel" issue. These include: threatening to invoke rights under the Payment of Wages Act;22 reporting and testifying voluntarily about radioactive contamination and unsafe working conditions at a nuclear facility;23 an alleged violation of the Federal Emergency Medical Treatment and Active Labor Act;24 and, refusal to participate in employer's illegal and unethical acts.25 The South Carolina Supreme Court specifically refused to extend the exception to situations where the employee has "... an existing remedy for a discharge which allegedly violates rights other than the right to the employment itself."26
In Evans v. Taylor Made Sandwich Co. the court decided that a jury could find that terminations of employees who invoked rights under the Payment of Wages Act were retaliatory and a violation of public policy.27 The South Carolina Supreme Court overruled Evans to the extent it holds a jury may determine whether discharging an employee is a violation of public policy as the determination of what constitutes public policy is a question of law for the courts to decide.28 At the same time, the court said it agreed with the Evans court that there is no existing statutory remedy for wrongful termination within the Payment of Wages Act that would prohibit an employee from bringing a claim based on a violation of public policy. The court did not hold that a violation of the Act would support a claim, but merely that an action for wrongful termination cannot be precluded. It specifically declined to address "whether the public policy exception applies when an employee is terminated in retaliation for filing a wage complaint with the Department of Labor" because there was no evidence the employee in the case was terminated in retaliation for filing or threatening to file a claim.
3. The Termination Was in Retaliation for Actions Protected by That Public Policy
The termination must have been for actions protected by the public policy. There are cases where the plaintiff failed to plead or was unable to prove that discharge was for such activities.29
D. Defenses
The statute of limitations applicable to any injury of the rights of another not arising on contract is three years for actions arising on or after April 5, 1988, and six years for those arising before that date.30 Since wrongful discharge is a tort action separate from any contract action the plaintiff may have, presumably the statute of limitations for contract actions does not apply. Actions initiated under the provision must be commenced within three years after the plaintiff knew, or by the exercise of reasonable diligence should have known, that a cause of action existed.31
While common law charitable immunity was eliminated by the South Carolina Supreme Court in 1981,32 the decision does not have retroactive application.33 There is a statutory limitation on liability for charitable organizations.34 A "charitable organization" is any organization, institution, association, society, or corporation which is exempt from taxation pursuant to 26 U.S.C. § 501(c)(3) or (d).35 A person "sustaining injury or dying" as a result of a tortious act of commission or omission by an employee36 of a charitable organization acting within the scope of his or her employment, may recover no more than the liability imposed under the Tort Claims Act37 for actual damages sustained. Unless it is proved that the employee acted recklessly, willfully, or in gross negligence, an action against the charitable organization is a complete bar to recovery against the employee.38
In some circumstances, claims may be preempted by federal law.39 Failure to exhaust administrative remedies has also been held to be a defense.40
E. Damages
Damages in a wrongful discharge action may include economic loss and punitive damages41 and reinstatement may be available as a remedy. When an employee is wrongfully discharged under a contract for a definite term, the measure of damages generally is the wages for the unexpired portion of the term.42
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Notes:
[1] Ludwick v. This Minute of Carolina, Inc., 287 S.C. 219, 337 S.E.2d 213 (1985). See also Prescott v. Farmers Telephone Cooperative, 335 S.C. 330, 516 S.E.2d 923 (1999); Epps v. Clarendon County, 304 S.C. 424, 405 S.E.2d 386 (1991); Ross v. Life Insurance Co. ofVirginia, 273 S.C. 764, 259 S.E.2d 814 (1979) (allegations of conspiracy by defendants to terminate employment failed to state a cause of action where the employment contract was terminable at the will of either party); Moshtaghi v. The Citadel, 314 S.C. 316, 443 S.E.2d 915 (Ct. App. 1994); Jones v. General Electric Co., 331 S.C. 351, 503 S.E.2d 173 (Ct. App. 1998). And see Cape v. Greenville County Sch. Dist., 365 S.C. 316, 618 S.E.2d 881 (S.C. 2005) (employment contract for definite term that contained at-will termination clause was valid; under the express terms of contract, employee was at-will and, therefore, had no breach of contract cause of action based on termination as express contract provision altered presumption that employment for definite term is terminable only on just cause, and replaced presumption with at-will termination clause).
[2] If the employee handbook does not apply to the employee, it cannot modify the at-will relationship. Grant v. Mount Vernon Mills, Inc., 370 S.C. 138, 634 S.E.2d 15 (Ct. App. 2006) (where employee handbook policy...
