Small v. Springs Industries, Inc.

• Decision Date: 21 May 1986
• Docket Number: No. 22736,22736
• Citation: 292 S.C. 481,357 S.E.2d 452
• Court: South Carolina Supreme Court
• Parties: , 55 USLW 2698, 106 Lab.Cas. P 55,766, 2 IER Cases 266 Kathy L. SMALL, Respondent, v. SPRINGS INDUSTRIES, INC., Appellant. . Heard

Page 452

357 S.E.2d 452

292 S.C. 481, 55 USLW 2698, 106

Lab.Cas. P 55,766,

2 IER Cases 266

Kathy L. SMALL, Respondent, v. SPRINGS INDUSTRIES, INC., Appellant.

No. 22736.

Supreme Court of South Carolina.

Heard May 21, 1986.

Decided June 8, 1987.

James H. Watson, Mark R. Holmes and Kenneth E. Young, Leatherwood, Walker Todd and Mann, Greenville, and Christopher S. Barnard, of Legal Dept., of Springs Industries, Inc., Fort Mill, for appellant.

Herbert W. Louthian, of Louthian & Louthian, Columbia, and Thomas C. Davis, Beaufort, for respondent.

HARWELL, Justice:

Respondent Small sued appellant Springs Industries, Inc. (Springs) for breach of contract. After Small had been employed at Springs for five years, the company issued an employee handbook and distributed it to all of its employees. Springs later issued a bulletin to all employees setting forth in full the handbook's termination procedure. This handbook and bulletin provided for a four-step disciplinary process which consisted of a verbal reprimand, a written warning, a final written warning, and discharge. Small was discharged after only one written warning. The trial judge allowed the jury to determine whether or not the employee handbook, the bulletin, and oral assurances by Small's supervisors that Springs would always follow the handbook's four-step discharge process, altered the otherwise at-will employment relationship. The jury found for Small and returned a verdict of $300,000 actual damages for breach of the employment contract. Springs appeals. We affirm in part, reverse in part, and remand.

Small's employment record at Springs is less than impressive. Her record is replete with absences and injuries. Nonetheless, Springs' employee handbook provides a four-step discharge policy for all of its employees. The handbook does contain an exception to this four part process: "[S]ome offenses, such as fighting, drunkenness, and others of an equally serious nature, will lead to immediate discharge without the usual four-step procedure being followed." At trial, Small's boss testified that he had never had any disciplinary problems with Small; she had never come to work intoxicated; and she had never created any fights or disputes.

Under the common law, a trial court should submit to the jury the issue of existence of a contract when its existence is questioned and the evidence is either conflicting or admits of more than one inference. Capital City Garage and Tire Co. v. Electric Storage Battery Co., 113 S.C. 352, 101 S.E. 838 (1920); Benya v. Gamble, 282 S.C. 624, 321 S.E.2d 57 (Ct.App.1984); 17A C.J.S. Contracts § 611 (1963). It was for the jury to decide whether the handbook, the bulletin, and the oral assurances constituted an employment contract. If the jury found that they did, then it had to decide whether or not Springs reasonably could have determined that Small's actions constituted a serious offense which could result in discharge without the four-step process. The jury obviously determined that a contract was established and that Small's actions could not have fallen into the "serious offense" category. Since Springs admittedly failed to follow its own discharge policy, the jury allowed Small to recover for breach of contract. In a law action that is tried by a jury, our jurisdiction extends only to correcting errors of law. We will not disturb a factual finding made by the jury unless there is no evidence in the record which reasonably supports the jury's findings. Townes Associates, Ltd. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976).

Springs contends that no employment contract was established and, therefore, Small remained an at-will employee who could be terminated without notice for any reason. Small acknowledges the validity of the at-will employment rule but she contends that Springs altered this relationship and became contractually bound by the employee handbook, bulletin, and oral assurances of her supervisors. Springs contends that no employment contract was established because there was no mutuality or "meeting of the minds" between the parties; the writings did not contain the necessary elements of an employment contract; and the writings lacked reciprocal rights, duties, and obligations.

Springs' analysis might be valid if it were applied to a bilateral contract or agreement. The employment agreement in this case, like most employment agreements, was a unilateral agreement. Springs made an offer or promise to hire Small in return for specified benefits and wages. Small accepted this offer by performing the act on which the promise was impliedly or expressly based. Springs' promise constituted the terms of the employment agreement. Small's action or forebearance in reliance on Springs' promise was sufficient consideration to make the promise legally binding. ¹ There was no contractual requirement that Small do anything more than perform the act on which the promise was predicated in order to legally bind Springs. See Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 630-31, 292 N.W.2d 880, 900 (1980). (Ryan, J., concurring).

Unquestionably, Springs was under no obligation to write and distribute the employee handbook or the bulletin. Once Springs voluntarily chose to publish the handbook and bulletin and orally assure the employees that the provisions of those publications would be followed, there were "strong equitable and social policy reasons militating against allowing employers to promulgate for their employees potentially misleading personnel manuals while reserving the right to deviate from them at their own caprice." Walker v. Westinghouse Electric Corporation, 77 N.C.App. 253, 259, 335 S.E.2d 79, 83 (1985). "Having announced the policy, presumably with a view to obtaining the benefit of improved employee attitudes and behavior and improved quality of the work force, the employer may not treat its promise as illusory." Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 619, 292 N.W.2d 880, 895 (1980).

If an employer wishes to issue policies, manuals, or bulletins as purely advisory statements with no intent of being bound by them and with a desire to continue under the employment at will policy, he certainly is free to do so. This could be accomplished merely by inserting a conspicuous disclaimer or provision into the written document. It is patently unjust to allow an employer to couch a handbook, bulletin, or other similar material in mandatory terms and then allow him to ignore these very policies as "a gratuitous, nonbinding statement of general policy" whenever it works to his disadvantage. Assuredly, the employer would view these policies differently if it were the employee who failed to follow them.

Springs contends that employers will stop providing handbooks, bulletins, and similar materials if they are bound by them. If company policies are not worth the paper on which they are printed, then it would be better not to mislead employees by distributing them. Due to the potential for gross inequality in a situation such as the one in the case at bar, a majority of states has determined that a handbook can alter the employment status. See Annot., 33 A.L.R. 4th 120 (1984). South Carolina, as a progressive state which wishes to see that both employer and employee are treated fairly, now joins those states. We hold that a jury can consider an employee handbook, along with other evidence, in deciding whether the employer and employee had a limiting agreement on the employee's at-will employment status. The jury in this case considered all the evidence and returned a verdict in Small's favor. "The courts will exercise the greatest self-restraint in interfering with the constitutionally mandated process of jury decision. (Citation omitted)." Gates v. Life of Montana Insurance Company, 40 St.Rep. 1287, 668 P.2d 213, 215 (Mont.1983). Under our scope of review as set forth in Townes Associates, the jury's decision that there was a contract and that it was...