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25036 - Littlefield, et al. v. SC Forestry Commission, et al.

Shearouse Adv. Sh. No. 39
S.E. 2d

THE STATE OF SOUTH CAROLINA

In The Supreme Court

Catherine Littlefield,

Vivian Martin, and

Jeremy James, for

themselves and all

others similarly situated, Appellants,

v.

South Carolina Forestry

Commission, South

Carolina Department of

Mental Health, both as

representatives of all

agencies of the State of

South Carolina; Richard

Eckstrom, in his official

capacity as Treasurer of

the State of South

Carolina, South Carolina

Budget and Control

Board Division of,

Human Resources, Respondents.

Appeal From Richland County

J. Ernest Kinard, Jr., Circuit Court Judge

Opinion No. 25036

Heard November 16, 1999 - Filed December 20,1999

REVERSED

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Littlefield, et al., v. SC Forestry Commission, et al.,





Armand Derfner, Peter Wilborn, and Ray P.

McClain, all of Charleston; for appellants.

Vance J. Bettis, of Gignilliat, Savitz & Bettis; Edwin

E. Evans, Office of General Counsel, S.C. Budget and

Control Board; and Samuel L. Wilkins, Office of

Human Resources, S.C. Budget and Control Board,

all of Columbia, for respondents.





WALLER, A.J.: At issue in this appeal is the manner in which state

agencies calculate pay for unused annual leave of terminated, deceased, and

retiring state employees. The methodology employed by state agencies differs

depending upon whether the state employee is terminated, retires, or dies. The

circuit court upheld the agencies' methodology, finding no equal protection

violation in the disparate treatment accorded different employees. The court

also denied employees' motion for class certification. We reverse.





FACTS



Employees in this case are Catherine Littlefield and Vivian Martin,

former employees of the South Carolina Forestry Commission.1 Littlefield was

employed by the Commission from 1973 until May 1996, when she was laid off.

In January 1996, Littlefield carried over 324.5 hours of annual leave.2 Between

January and May 1996 (at which time she was terminated), Littlefield earned

97.5 more hours3 of annual leave. Prior to receiving notification of her


1 The circuit court's ruled plaintiff Jeremy James lacks standing as his

state employment has not terminated. We concur with this ruling.





2 Pursuant to S.C. Code Ann. § 8-11-610 (1986), employees earn at least

1 and 1/4 days annual leave for each month of employment. Such annual leave

may be carried over from year to year, not to exceed forty-five days. Because

Littlefield worked only 39 hours per week, however, her maximum carryover of

accrued leave was 351 hours (or 43.875 days).







3 Littlefield earned 19.5 hours per month pursuant to 23A S.C. Code Ann.

Reg. 19-703.08(D)(1976).

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Littlefield, et al., v. SC Forestry Commission, et al.,





termination in 1996, Littlefield used 20 hours of annual leave. Upon her

termination, the Forestry Commission deducted the 20 hours leave she took in

1996 from her maximum allowable carryover of 351 hours, and paid her for 331

hours. She claims the 20 hours of annual leave she took prior to her

termination in 1996 should not have been deducted from her maximum

carryover hours, but should simply have been counted as hours earned and used

in her final year of employment.





Martin was employed 40 hours per week by Commission from 1985 until

she was laid off in October 1993.4 In January 1993, she carried forward 45 days

(360 hours) of unused annual leave. Between January and October 1993, she

earned another 100 hours of annual leave, of which she used 94.5 hours. Upon

termination, she was paid 265.5 hours (360 hours minus 94.5 hours = 265.5

hours) of annual leave. She claims she was entitled to be compensated for 360

hours of annual leave, without regard to the 94.5 hours annual leave earned

and taken in 1993, prior to her termination.







ISSUES

1. Does the method of computation used by state agencies in

arriving at termination pay violate equal protection?

2. Did the circuit court err in refusing to certify a class action?





1. EQUAL PROTECTION

The method of calculation of termination pay for state employees is set

forth in S.C. Code Ann. § 8-11-620, which provides:

Upon termination from state employment, an employee may take

both annual leave and a lump-sum payment for unused leave, but

in no event shall such combination exceed forty-five days in

a calendar year except as provided for in § 8-11-610.5 If an



4 Martin's position as a fire tower operator in her hometown of York was

eliminated. She was offered a position 50 miles away in Spartanburg, which

she refused.





5 The exceptions provided in section 8-11-610 permit employees prior to

1972 who had more than 45 days annual leave to retain those amounts. The

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Littlefield, et al., v. SC Forestry Commission, et al.,





employee dies, his legal representative shall be entitled to a

lump-sum payment for his unused leave, not to exceed forty-five

working days, except as provided for in § 8-11-610. Upon

retirement from state employment or upon the death of an

employee, a lump-sum payment will be made for unused leave, not

to exceed forty-five days, unless a higher maximum is approved

under the provisions of § 8-11-610, and without regard to the

earned leave taken during the calendar year in which the

employee retires.6 (Emphasis supplied).





State agencies interpret this statute to mean that, if state employment is

terminated for reasons other than death or retirement, the employee is paid

a maximum of 45 days annual leave upon termination, less any amounts of

annual leave taken by the employee during the calendar year in which his or

her employment terminates. If an employee dies or retires, however, the

agencies do not deduct annual leave taken during the final calendar year from

the amount carried forward from the previous year.7





The net effect of agencies' interpretation is that if an employee is

terminated (as opposed to dying or retiring), and has used any annual leave

during the final calendar year of employment, the employee's carryover account

from the previous year is reduced by the number of days annual leave used

during the year of termination.8


exceptions are not at issue in this appeal.





6 Pursuant to this statute, the office of human resources has enacted 23A

S.C. Code Ann. Reg. 19-703.07 (l) & (m) which essentially track the language

of the statute.





7 Although the statute specifies a maximum of 45 days, agencies state in

their brief that they apply this rule uniformly to all terminated employees,

without regard to whether they have reached the maximum number of

carryover days.





8 The system appears similar to a bank account in which the employee

has a checking and a savings account. "Carryover leave" is annually placed into

the savings account, and earned monthly leave is deposited monthly into the

checking account. As leave is used during the year, it is deducted from the

checking account. Upon termination, any annual leave hours taken during the

final year of employment is also deducted from the amount of total leave then

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Littlefield, et al., v. SC Forestry Commission, et al.,





Employees contend that to essentially "dock" them twice for leave used

in their final year of employment, while not doing so in the case of retirees and

decedents, results in an equal protection violation. We agree.





To satisfy equal protection, a legislative classification must bear a

reasonable relation to the legislative purpose sought to be achieved; members

of the class must be treated alike under similar circumstances; and the

classification must rest on some rational basis. Walker v. South Carolina Dep't

of Highways and Pub. Transp., 320 S.C. 496, 466 S.E.2d 346 (1995). When the

Court considers the constitutionality of a statute passed by the General

Assembly, it construes the statute so as to render it valid if possible. University

of South Carolina v. Mehlman, 245 S.C. 180, 139 S.E.2d 771 (1964).







We find no rational basis for the differential treatment accorded

terminated employees versus retiring or deceased employees. Initially, contrary

to the construction placed upon it by agencies, Section 8-11-620 does not state

that decedents' estates are to be compensated without regard to annual leave

taken in the final year of employment; the statute specifically refers only to

retirees in that regard. Accordingly, there is no rational basis for agencies to

treat decedents differently than other terminated employees.





Moreover, we find no rational basis for the agencies' distinction between

retirees and non-retirees. In the present case, appellant Littlefield worked for

the Forestry Commission for 23 years when she was laid off due to a reduction

in force. There is no indication in the record that her termination was in any

way volitional, or that, but for the layoff, she would not have reached full

retirement. To treat employees who are involuntarily laid off after 23 years of

service differently than employees who manage to avoid such a layoff and reach

retirement is simply irrational.





We agree with Employees that agencies' construction of Section 8-11-620

results in an equal protection violation. We find a proper interpretation of

Section 8-11-620 simply means that upon termination, an employee may not

use or be paid for more than 45 days annual leave, but that annual leave which

was accrued and used during the final year prior to termination may not be

deducted from the amounts of annual leave carried forward from the prior year.


available in the savings account. In essence, the terminated employee is

actually "docked" twice for any annual leave used during the final year of

employment.

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Littlefield, et al., v. SC Forestry Commission, et al.,





Such an interpretation of the statute results in no equal protection violation,

and renders the statute constitutional. See University of South Carolina v.

Mehlman, 245 S.C. 180, 139 S.E.2d 771 (1964)(when this Court considers the

constitutionality of a statute passed by the General Assembly, we construe the

statute so as to render it valid if possible). Accordingly, we reverse the circuit

court's ruling on this issue.





2. CLASS CERTIFICATION



The circuit court denied the plaintiffs' motion for class certification for two

reasons: 1) the proposed class included current employees who had no

justiciable controversy, and 2) it presumed the state would voluntarily comply

with any final judgment rendered if plaintiffs prevailed.





As to the first asserted basis for denying certification, although we agree

that present employees are not properly included in the class, we see no reason

the circuit court could not, as urged by plaintiffs, have redefined the class to

include only former employees. Accord McGann v. Mungo, 287 S.C. 561, 340

S.E.2d 154 (Ct. App. 1986) (circuit court may require plaintiffs to re-plead or

redefine alleged class).





As to the second asserted basis, the circuit court ruled the state agencies

should be afforded an opportunity to comply voluntarily with any final

judgment invalidating their method of calculation of annual leave. The circuit

court relied on two federal cases for this proposition. Our state class action rule

differs significantly from its federal counterpart. The drafters of Rule 23, South

Carolina Rules of Civil Procedure (SCRCP) intentionally omitted from our state

rule the additional requirements found in Federal Rule 23(B), Federal Rules of

Civil Procedure (FRCP). By omitting the additional requirements, Rule 23,

SCRCP, endorses a more expansive view of class action availability than its

federal counterpart.





Since adoption of Rule 23, SCRCP, this Court has heard many cases that

have used the class action procedure to allow adequate representatives to

address issues which affect large groups of citizens in our state. See, e.g.,

Redmond v. Lexington County School Dist. No. Four, 314 S.C. 431, 445 S.E.2d

441 (1994); Brown v. County of Horry, 308 S.C. 180, 417 S.E.2d 565 (1992);

Payne v. Duke Power Co., 304 S.C. 447, 405 S.E.2d 399 (1991); South Carolina

Pub. Serv. Auth. v. Citizens and Southern Nat'l Bank of South Carolina, 300

S.C. 142, 386 S.E.2d 775 (1989).

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Littlefield, et al., v. SC Forestry Commission, et al.,





We find the current case especially appropriate for class treatment. The

number of potential plaintiffs is large, there is one main issue of law which is

identical for all plaintiffs, all injuries result from misapplication of the statute

by the agencies, and calculation of damages would not be difficult. Accordingly,

we find the circuit court abused its discretion in refusing class certification. The

judgment below is

REVERSED.

FINNEY, C.J., TOAL, MOORE, and BURNETT, JJ., concur.

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