Grant v. Mount Vernon Mills, Inc., 4122.

• Decision Date: 12 June 2006
• Docket Number: No. 4122.,4122.
• Citation: 634 S.E.2d 15
• Court: South Carolina Court of Appeals
• Parties: Cynthia K. GRANT, Appellant, v. MOUNT VERNON MILLS, INC., Respondent.

634 S.E.2d 15

Cynthia K. GRANT, Appellant, v. MOUNT VERNON MILLS, INC., Respondent.

No. 4122.

Court of Appeals of South Carolina.

Heard May 11, 2006.

Decided June 12, 2006.

Rehearing Denied August 25, 2006.

COPYRIGHT MATERIAL OMITTED

Candy Kern-Fuller, of Piedmont, for Appellant.

Thomas A. Bright, of Greenville, for Respondent.

KITTREDGE, J.

This is a breach of contract action based on an employee handbook. The employee, Cynthia K. Grant, appeals from the circuit court's grant of summary judgment in favor of Mount Vernon Mills, Inc. We affirm and hold that the termination provisions in the employee handbook did not apply to Grant (as a salaried employee), and that in any event, the termination policy provisions of the handbook are permissive in nature and did not alter the at-will relationship.

I.

We apply the same standard as the circuit court when reviewing the grant of a summary judgment motion: summary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), SCRCP; Fleming v. Rose, 350 S.C. 488, 493, 567 S.E.2d 857, 860 (2002). To determine whether any material fact exists, the evidence and all reasonable inferences must be viewed in the light most favorable to the nonmoving party. South Carolina Prop. & Cas. Guar. Ass'n v. Yensen, 345 S.C. 512, 518, 548 S.E.2d 880, 883 (Ct.App.2001).

Once the party moving for summary judgment meets the initial burden of showing the absence of a genuine issue as to any material fact, the nonmoving party may not simply rest on the mere allegations contained in the pleadings. Peterson v. W. Am. Ins. Co., 336 S.C. 89, 94, 518 S.E.2d 608, 610 (Ct.App. 1999). "Rather, the nonmoving party must come forward with specific facts showing there is a genuine issue for trial." Id. "The purpose of summary judgment is to expedite disposition of cases which do not require the services of a fact finder." George v. Fabri, 345 S.C. 440, 452, 548 S.E.2d 868, 874 (2001).

II.

In 1996, Grant began her salaried employment with Mount Vernon as a Pension Benefits Manager. Grant's duties included processing monthly pensions payroll, conducting interviews with plan participants, and reviewing termination packages for terminated employees. Grant received a copy of the employee handbook.

The employee handbook contains numerous policies, including Employment Policy and Practice, Union Policy, Relocation Policy, Jury Duty, Terminations, Employment of Family Relatives, and so forth. Each policy in the manual has—at the top of the page— the term "COVERAGE." The policies apply to a variety of employee classifications. Some policies apply to "ALL EMPLOYEES"; some policies apply to "SALARIED EMPLOYEES"; some apply to "SALARIED EMPLOYEES — EXEMPT AND NONEXEMPT"; some apply to "HOURLY EMPLOYEES"; some apply to "HOURLY NONEXEMPT EMPLOYEES"; and one policy applies to "FIRST LINE SUPERVISORS." As noted, Grant was a salaried employee.

At issue here is the handbook's termination policy that provides "COVERAGE" for "HOURLY NONEXEMPT EMPLOYEES" and states in relevant part:

I. Policy

It is the policy of the Company to attempt to be fair and just in all dealings with employees. For purposes of this policy, a termination is the result of any action initiated by the employee or the Company whereby the service record of the employee is broken.

. . . .

B. Discipline

1. Notice of Warnings

a) Warnings are normally given as a result of an employee's unsatisfactory conduct or performance. The purpose of the warning is to serve notice to the employee that a continuation of the practice may result in discharge and to advise the employee that a change in conduct or performance must be made.

b) Warnings should be administered by the employee's immediate supervisor and should be straight forward and sincere. The supervisor should assume the responsibility and attitude of being helpful.

. . . .

2. Discharge

a) The three warnings and final improper conduct or performance will result in discharge if all four take place in a twelve consecutive month period.

. . . .

d) Immediate discharge

. . . .

4) Offenses — It is not the Company's intent to list in detail everything that an employee should or should not do under all circumstances. The following offenses are only examples of the types of conduct which could result in immediate discharge:

. . . .

d) Creating discord or lack of harmony; . . . .

(emphasis added).

On September 13, 2000, Grant met with three of her supervisors, Kent Harris, Ned Cochrane, and Gary Williams. Grant was terminated, effective immediately. The supervisors told Grant the reasons for her termination, and those reasons relate to their perception of Grant's poor work performance and her creating discord and lack of harmony in the workplace. Harris informed Grant she was terminated for her performance problems and lack of effort to work in a team environment within the corporate setting. Further, he stated she consistently displayed a poor attitude as evidenced by various emails she sent. In one of those emails Grant complained about being asked to perform employee interviews. She concluded by asking, "So do we just get the crappy work dumped on us?" In addition to Grant's supervisors' belief of her negative attitude towards employees and her work, Harris stated Grant performed her job poorly.

Grant filed suit in the circuit court alleging race and sex discrimination in violation of Title VII of the Civil Rights Act of 1964, as well as state claims for breach of contract, breach of contract accompanied by fraudulent act, and breach of the covenant of good faith and fair dealing.

Mount Vernon removed the action to federal district court and filed a motion for summary judgment on all claims. The federal district court granted Mount Vernon summary judgment as to the federal claims and remanded the various contract claims to state court.

On remand to state court, Mount Vernon moved for summary judgment. Mount Vernon alleged the various contract claims were premised on the existence of an employment contract, and no contract existed as a matter of law because Grant was employed at-will. Mount Vernon maintained the employee handbook policy plainly stated the termination policy only applied to hourly nonexempt employees, and Grant was a salaried employee. Mount Vernon contended that because the termination policy did not apply to Grant, her at-will status was not altered. Accordingly, Mount Vernon claimed Grant's breach of contract claims failed as a matter of law.

Grant countered that during her employment she reviewed various salaried employee files that contained written warnings prior to termination. Grant also submitted various affidavits from salaried employees who stated they received written warnings prior to termination. Further, Grant submitted affidavits from two managers who stated they gave written warnings to salaried employees prior to termination. Grant's position was and remains that if other salaried employees received warnings, so should she.

Grant additionally relied on Mount Vernon's failure to insert a conspicuous disclaimer in the handbook to express its desire to maintain the at-will employment relationship.¹ Therefore, Grant contended that a question of fact existed as to whether the handbook created a binding contract, meaning Grant could only be fired for cause.

The circuit court granted Mount Vernon summary judgment. The circuit court reasoned the termination policy stated that coverage was for hourly nonexempt employees and because Grant was a salaried employee no ambiguity existed as to the fact she fell outside the scope of the policy. Therefore, the circuit court found the employee handbook did not create a contract of employment that modified Grant's at-will status. Moreover, the circuit court rejected Grant's reliance on Mount Vernon's decision to give warnings to other at-will employees and not her. This appeal followed.

III.

Grant maintains the circuit court erred in concluding Mount Vernon's employee handbook, as a matter of law, did not alter Grant's status as an at-will employee. We disagree.

South Carolina has long recognized the doctrine of employment at-will. Conner v. City of Forest Acres, 363 S.C. 460, 471, 611 S.E.2d 905, 910-11 (2005) (Conner II); Shealy v. Fowler, 182 S.C. 81, 87, 188 S.E. 499, 502 (1936) ("[a] contract for permanent employment, so long as it is satisfactorily performed, which is not supported by any consideration other than the obligation of service to be performed on the one hand and wages to be paid on the other, is terminable at the pleasure of either party."). This doctrine allows either party to terminate the employment "for any reason or no reason" without being subject to a claim for breach of contract, subject to narrow exceptions and prohibitions against illegal discrimination which are not present here. Horton v. Darby Elec. Co., Inc., 360 S.C. 58, 67, 599 S.E.2d 456, 460 (2004); see also Conner II, 363 S.C. at 471, 611 S.E.2d at 910. The at-will employment doctrine is essentially an economic incentive that provides critically needed flexibility in the marketplace. Prescott v. Farmers Tel. Co-op., Inc., 335 S.C. 330, 334-35, 516 S.E.2d 923, 925 (1999).

When the at-will status of an employee is altered by the terms of an employee handbook, however, a contract may arise allowing for a cause of action for wrongful discharge. Small v. Springs Indus., Inc., 292 S.C. 481, 484, 357 S.E.2d 452, 454 (1987).

When the evidence conflicts or is capable of more than one inference, the issue of whether an employee handbook constitutes a contract should be submitted to the jury; however, "`a court should intervene to resolve the handbook issue as a matter of law . . . if the handbook statements and the disclaimer, taken together, establish beyond any doubt tha[t] an enforceable promise either does or does not exist.'"...