Shelton v. Oscar Mayer Foods Corp.
| Decision Date | 05 December 1996 |
| Docket Number | No. 24580,24580 |
| Court | South Carolina Supreme Court |
| Parties | , 12 IER Cases 1052 Julian Harris SHELTON, Petitioner, v. OSCAR MAYER FOODS CORPORATION, d/b/a Louis Rich, a wholly owned subsidiary of Phillip Morris Companies, Inc., Barton Protective Services, Inc., and William Brown, Defendants. of which Oscar Mayer Foods Corporation, d/b/a Louis Rich, a wholly owned subsidiary of Phillip Morris companies, Inc., is Respondent. . Heard |
C. Richard Kelly, Columbia; and Samuel M. Price, Jr., Newberry, for petitioner.
Thomas A. Bright, of Haynesworth, Baldwin, Johnson and Greaves, P.A., Greenville, for respondent.
Harold W. Funderburk, Jr., Columbia, for amicus curiae SC Employment Security Commission.
Shelton claims the trial court and the Court of Appeals erred in holding the factual issues determined during a contested hearing conducted by the South Carolina Employment Security Commission (ESC) did not preclude relitigation of those issues in a subsequent wrongful discharge suit. We affirm.
Shelton was employed at the Louis Rich processing plant in Newberry, South Carolina. In 1987, William Brown, a security guard, told Louis Rich management he had observed Shelton and a co-worker smoking marijuana in the co-worker's van in the Louis Rich parking lot. Allegedly, Louis Rich discharged Shelton without further investigation.
After termination, Shelton sought unemployment benefits from the ESC. At the ESC hearing, testimony about the incident was presented by Shelton, the co-worker, and the security guard. The hearing officer found Shelton was discharged without cause and entitled to benefits. Louis Rich did not appeal this decision.
Subsequently, Shelton brought a wrongful termination of employment suit. Shelton claimed Louis Rich failed to ensure, as its handbook provided, that its rules governing employee conduct would be enforced fairly and equally with regard to all employees. Shelton alleged several causes of action against Louis Rich including breach of contract, breach of contract accompanied by a fraudulent act, fraudulent misrepresentation, and breach of covenant of good faith and fair dealing. Shelton moved for partial summary judgment on the ground Louis Rich was collaterally estopped from litigating whether Shelton was discharged for smoking marijuana because that factual determination had been made in the ESC decision. Judge T.L. Hughston, Jr. denied this motion. At trial, Judge James W. Johnson, Jr. granted Louis Rich's motion for a directed verdict on the breach of contract claim. All other claims had been previously disposed of on motions to dismiss or for summary judgment by either Judge Johnson or Judge Hughston.
Shelton appealed. Initially, the Court of Appeals reversed on the collateral estoppel issue. Shelton v. Oscar Mayer Foods Corp., Op. No. 2312 (S.C.Ct.App. filed February 27, 1995) (Davis Adv.Sh. No. 5 at 34). However, upon rehearing, the Court of Appeals upheld the determination of the trial court that Louis Rich should not be collaterally estopped from relitigating issues decided in a previous ESC hearing. Shelton v. Oscar Mayer Foods Corp., 319 S.C. 81, 459 S.E.2d 851 (1995). The Court of Appeals in its ruling relied on the policy underlying the purpose of the ESC and case law from other jurisdictions. We granted certiorari.
Did the trial court and Court of Appeals err in holding collateral estoppel does not apply to the factual findings of an ESC hearing?
Shelton argues Louis Rich was collaterally estopped from relitigating a factual issue decided during a contested hearing conducted by the ESC to determine whether Louis Rich discharged Shelton for cause. We disagree.
Collateral estoppel or issue preclusion prevents a party from relitigating in a subsequent suit an issue actually and necessarily litigated and determined in a prior action. Beall v. Doe, 281 S.C. 363, 369 n. 1, 315 S.E.2d 186, 189 n. 1 (Ct.App.1984). The issue of whether collateral estoppel applies to rulings of the ESC has never been directly addressed by an appellate court of this state prior to Shelton, supra. However, this Court has held an administrative agency's findings of fact may have preclusive effect in a subsequent civil suit. See Bennett v. South Carolina Dep't of Corrections, 305 S.C. 310, 408 S.E.2d 230 (1991). 1
In the abstract, there is no legitimate reason to permit a defendant who has already thoroughly and vigorously litigated an issue and lost the opportunity to relitigate the identical question.... The public interest demands an end to the litigation of the same issue. Principles of finality, certainty, and the proper administration of justice suggest that a decision once rendered should stand unless some compelling countervailing consideration necessitates relitigation.
Beall, 281 S.C. at 370, 315 S.E.2d at 190 (quoting Hossler v. Barry, 403 A.2d 762, 769 (Me.1979)).
The purpose of the ESC hearings is to quickly provide benefits to persons becoming unemployed through no fault of their own. S.C.Code Ann. § 41-27-20 (1986). The legislature intended to minimize procedural hurdles before the ESC so as to enable unemployed claimants to obtain prompt decisions regarding entitlement to unemployment benefits from the ESC. The purposes of the ESC are in conflict with the doctrine of collateral estoppel; therefore, public policy dictates the findings made during an ESC hearing should not receive collateral estoppel effect.
Further, the narrow issue the ESC decides is simply whether the claimant is qualified to receive employment benefits. See S.C.Code Ann. § 41-35-120. Thus, the jurisdiction of the ESC is limited. By focusing on a narrow issue, the ESC is able to expeditiously determine whether an employee is entitled to unemployment benefits. This serves the purpose of providing benefits quickly to employees who are unemployed through no fault of their own. To apply collateral estoppel to ESC decisions would result in ESC hearings becoming forums for employers and employees to engage in lengthy civil litigation of claims relating to an employee's discharge. Thus, the intent underlying the employment security law would be frustrated.
Employers normally are not compelled to intensely contest ESC hearings because the stakes are not great in such hearings. An ESC hearing only determines whether an employee was discharged for cause and thus...
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