D. Defenses
The SCPWA does not prohibit employers from asserting valid defenses or disputing payment in good faith.47
The Act includes its own suit limitation. An action to recover wages has to be commenced within three years after the wages become due.48 The discovery rule apparently applies.49
The Act prohibits its provisions from being "contravened or set aside" by private agreement,50 and, therefore, an employer cannot defend an action by claiming the employee has waived his or her rights under the Act.51 However, a departure policy, under which a departing employee was entitled to commissions only for advertisements sold and actually broadcast prior to his leaving the employment did not constitute a private agreement regarding what wages were due in contravention of the SCPWA.52
That the defendant relied on advice of counsel in withholding the wages may serve as a defense.53 Estoppel may also be a defense. For example, if the employer makes unilateral changes in prospective payments of wages or benefits and the employee accepts the proposed changes in the employment by continuing to work without objecting to the changes, the employee may be estopped from recovering any lost money.54
The South Carolina Supreme Court has rejected the proposition that a disloyal employee forfeits all compensation.55 Instead, it has adopt a balancing approach under which, in general, an employee is not entitled to any compensation for services performed during a period in which he or she has engaged in activities constituting a breach of the duty of loyalty, but even if the employee breaches the duty during some periods, he or she may recover compensation for services properly rendered during periods in which no breach occurred and for which compensation was apportioned in the employment agreement.56 In a federal district court case,57 the defendant employer, a mortgage brokerage company, asserted disloyalty as an affirmative defense. It argued the plaintiff forfeited entitlement to any compensation under the SCPWA because of her disloyalty. The plaintiff was hired by the defendant as a loan originator and, under a written employment agreement, was to be paid commissions based on a formula tied to mortgage brokerage fees collected on loans the plaintiff originated and closed. The defendant alleged the plaintiff submitted a fraudulent loan application and characterized the submission as an act of disloyalty. It argued the plaintiff forfeited the wages she earned for the entire period of the alleged disloyalty: from the time the application was submitted until her termination. The court accepted "disloyalty" as a defense, but refused to grant the defendant's motion for summary judgment because whether the plaintiff was disloyal within the meaning of the law would be a jury question.
SCPWA claims are potentially subject to preemption by the federal Labor Management Relations Act.58 Sovereign immunity under the federal Eleventh Amendment is a possible defense when the employer is an arm of the state.59
The South Carolina Supreme Court has held there is an implied good faith defense to the award of treble damages.60 First, the court noted that the language of the statute is permissive: "the employee may recover ... an amount equal to three times the full amount of the unpaid...
