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.2 Several exceptions have been created to the general rule. One arises when the at-will contract is modified,3 usually by an employee handbook,4 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.5 Imposition of a probation period does not generally create an employment contract.6
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,7 and the plaintiff must allege and prove the elements of a breach of contract to prevail. 8 Another exception to the general rule occurs when the plaintiff's employment was terminated in violation of a statutory or constitutional right.9 "When a statute creates a substantive right and provides a remedy for infringement of that right, the plaintiff is limited to that statutory remedy."10
The third exception to the principles of at-will employment was created in Ludwick v. This Minute of Carolina, Inc.,11 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,12 and apparently is not a general tort remedy, but one created to protect employees where no other remedy exists.13 "[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."14 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.15
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Notes:
[2] 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. of Virginia, 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).
[3] 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 plainly stated termination policy only applied to hourly nonexempt employees, and plaintiff was salaried employee, termination policy did not apply to her, and her at-will status was not altered).
[4] Small v. Springs Industries, Inc., 292 S.C. 481, 357 S.E.2d 452 (1987). See also Hendrix v. Eastern Distribution, Inc., 316 S.C. 34, 446 S.E.2d 440 (Ct. App. 1994) (at-will status altered by oral assurances that there would be no termination to avoid payment of commissions). Note that a handbook does not alter the nature of employment where it contains a conspicuous disclaimer. See, e.g., Johnson v. First Financial Corp., 305 S.C. 556, 409 S.E.2d 804 (Ct. App. 1991). Regarding the test for conspicuousness, see Jones v. General Electric Co., 331 S.C. 351, 503 S.E.2d 173 (Ct. App. 1998); Taliaferro v. Associates Corp. of N. Am., 112 F. Supp. 2d 483 (D.S.C. 1999) (court could resolve employment status...
