McClurkin v. Champion Labs. Inc.

Suanita McClurkin, Plaintiff,

v.Champion Laboratories, Inc., Defendant.

C.A. No. : 0:11-cv-02401-CMC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA ROCK HILL DIVISION

November 8, 2011

OPINION AND ORDER

ON MOTION TO

DISMISS

This matter is before the court on motion of Defendant Champion Laboratories, Inc. to dismiss Plaintiff Suanita McClurkin's Complaint pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure. Dkt. No. 4. Plaintiff's Complaint alleges three causes of action arising out of her termination from Defendant's York County facility: (1) breach of contract; (2) breach of contract accompanied by fraudulent act; and (3) breach of fiduciary duty. The court has jurisdiction under 28 U.S.C. § 1332(a)(1). For the reasons stated below, Defendant's motion is granted in part and denied in part.

STANDARD

A motion under Rule 12(b)(6) of the Federal Rules of Civil Procedure should be granted only if, after accepting all well-pleaded allegations in the complaint as true, it appears certain the plaintiff cannot prove any set of facts in support of her claims that entitles her to relief. See Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). Although the court must take the facts in the light most favorable to the plaintiff, it "need not accept the legal conclusions [the plaintiff would draw] from the facts." Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting Eastern Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000)). The court may also disregard any "unwarranted inferences, unreasonable conclusions, or arguments." Id.

The Rule 12(b)(6) standard has often been expressed as precluding dismissal unless it is certain that the plaintiff is not entitled to relief under any legal theory that plausibly could be suggested by the facts alleged. See Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). Nonetheless, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (quoted in Giarratano, 521 F.3d at 302). See also Wolman v. Tose, 467 F.2d 29, 33 n.5 (4th Cir. 1972) ("Under the liberal rules of federal pleading, a complaint should survive a motion to dismiss if it sets out facts sufficient for the court to infer that all the required elements of the cause of action are present.").

Thus, in applying Rule 12(b)(6), the court also applies the relevant pleading standard. Despite the liberal pleading standard of Rule 8, a plaintiff in any civil action must include more than mere conclusory statements in support of his claim. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (court need only accept as true the complaint's factual allegations, not its legal conclusions); see also Bass v. Dupont, 324 F.3d 761, 765 (4th Cir. 2003) (holding that "[w]hile a plaintiff is not charged with pleading facts sufficient to prove her case, as an evidentiary matter, in her complaint, a plaintiff is required to allege facts that support a claim for relief").

DISCUSSION

Defendant argues that the case should be dismissed because Plaintiff's Complaint fails to state a cause of action. Specifically, Defendant argues that (1) Plaintiff's breach of contract claim is barred by S.C. Code Ann. § 41-1-110 ("§ 41-1-110"); (2) Plaintiff did not allege a fraudulent act to support a claim for breach of contract accompanied by fraudulent act; and (3) Defendant owed no fiduciary duty to Plaintiff because there was no fiduciary relationship between Defendant and Plaintiff. Dkt. No. 4-1.

In response to Defendant's motion to dismiss, Plaintiff argues that Defendant improperly attached a copy of the employee handbook and acknowledgment page,¹ thereby converting a motion to dismiss into a motion for summary judgment. Dkt. No. 7 at 6. Plaintiff further argues that the motion to dismiss should be denied because Defendant had an attendance policy contained in its employee handbook, which it "dishonestly" applied to Plaintiff. Id. at 7-8.² Plaintiff fails to specifically address any of Defendant's arguments.

The court first notes that Defendant did not convert its motion to dismiss into a motion for summary judgment by attaching a copy of the employee handbook and a copy of an acknowledgment form signed by Plaintiff. The Fourth Circuit has held that a court may consider a document referenced in, but not attached to, a complaint on a Rule 12(b)(6) motion if the document is integral to and explicitly relied upon in the complaint, and if the plaintiff does not challenge its authenticity. Am. Chiropractic Ass'n, Inc. v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004). Plaintiff refers to the employee handbook in her Complaint, relies on the attendance policy contained in the employee handbook as the basis of her breach of contract claim, and does not challenge the authenticity of the employee handbook included with Defendant's motion to dismiss. Accordingly, the court may consider the employee handbook under Rule 12(b)(6). The acknowledgment page, which was not specifically referred to in the Complaint, is also attached toDefendant's motion. The court, however, need not consider the acknowledgment page to reach its decision below.

Breach of Contract. Defendant argues that the employee handbook provided to Plaintiff in March 2006 does not create a contractual obligation because the handbook contained a conspicuous disclaimer as described in § 41-1-110, and that Plaintiff's breach of contract claim is, therefore, barred by § 41-1-110. Dkt. No. 4-1 at 6-7. Plaintiff does not respond specifically to Defendant's argument that Plaintiff's breach of contract claim is barred by § 41-1-110. On reply, Defendant reargues that the breach of contract claim is barred pursuant to § 41-1-110 because the handbook contained a conspicuous disclaimer.³

Under South Carolina law, employment relationships are generally at will. Prescott v. Farmers Tel. Coop., Inc., 335 S.C. 330, 334, 516 S.E.2d 923, 925 (S.C. 1999). "[A]n at-will employee may be terminated at any time for any reason or no reason, with or without cause." Stiles v. American Gen. Life Ins. Co., 335 S.C. 222, 224, 516 S.E.2d 449, 450 (S.C. 1999). "However, where the at-will status of the employee is altered by the terms of an employee handbook, an employer's discharge of an employee may give rise to a cause of action for wrongful discharge." See Conner v. City of Forest Acres, 348 S.C. 454, 463, 560 S.E.2d 606, 610 (S.C. 2002) (citing Small v. Springs Indus., Inc., 292 S.C. 481, 357 S.E.2d 452 (S.C. 1987)). To alter the at-willemployment status, the handbook must contain contractually binding language that is "definitive in nature, promising specific treatment in specific situations." Hessenthaler v. Tri-County Sister Help, Inc., 365 S.C. 101, 110, 616 S.E.2d 694, 698 (S.C. 2005). In determining whether a policy promises specific treatment in specific situations, "[t]he court should consider whether the promises are couched in permissive or mandatory language." Lingard v. Carolina By-Products, 361 S.C. 442, 447, 605 S.E.2d 545, 548 (S.C. Ct. App. 2004). Furthermore, "the handbook promise must restrict the right of an employer to discharge." Lawrence v. Westinghouse Savannah River Co., Inc., 2005 WL 3968031 at *4 (D.S.C. March 31, 2005).

Employers who wish to issue handbooks without being bound by them "must insert a conspicuous disclaimer into the handbook."⁴ Hessenthaler, 616 S.E.2d at 697. South Carolina Code § 41-1-110 provides that employee handbooks, personnel manuals, or other policies issued after June 30, 2004 will not create contractual obligations if the document contains a conspicuous disclaimer. In order to be conspicuous as a matter of law under this statute, the disclaimer in a handbook "must be in underlined capital letters on the first page of the document and signed by the employee." Id.

Defendant directs the court to a disclaimer on the first page of the employee handbook that was distributed to Plaintiff in 2006. The disclaimer is reproduced below:

EMPLOYMENT AT WILL

This booklet reflects Company policy at the time of publication.

The Company, of course, may change these policies and

reserves the right to do so at any time. Moreover, this bookletis not to be considered all-inclusive or construed as a contract. Employment at will means that either you or the Company may terminate this relationship at any time, for any reason, with or without cause or notice.

Dkt. No. 4-2 at 4. The disclaimer is underlined and located on the first page of the handbook as required by § 41-1-110. The court, however, finds that the disclaimer does not meet the statutory requirements of § 41-1-110 because the disclaimer is not in capital letters.⁵ Although the title to the disclaimer is capitalized, the disclaimer itself is not capitalized.

After claiming that "the Disclaimer satisfies all of the statute's requirements," Defendant argues in a footnote that the court could find the disclaimer conspicuous even if the disclaimer does not meet all of the statutory requirements. Although Defendant claims that "courts have not required strict compliance with Section 41-1-110," the court does not find support in the case cited by Defendant. Dkt. No. 4-1 at 7 n.3. Defendant cites to Moss v. City of Abbeville, 740 F. Supp. 2d 738, 754 (D.S.C. 2010), where the court observed that an underlined, bolded disclaimer "appears to meet the statutory requirements." However, the court never decided whether the disclaimer complied with § 41-1-110. Id. Rather, the court found that there was no contract created by the handbook because plaintiff never received the handbook.⁶ Id. at 754-55.

The disclaimer contained on the first page of Defendant's employee handbook is not conspicuous under § 41-1-110 because it is not capitalized. The court, therefore, cannot dismiss Plaintiff's breach of contract claim based on Defendant's argument that the disclaimer is...