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2004-UP-433 - Drakeford v. New South, Inc.

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals


Quay Drakeford, Appellant,

v.

New South, Inc., Respondent.


Appeal From Kershaw County
 G. Thomas Cooper, Jr., Circuit Court Judge


Unpublished Opinion No. 2004-UP-433
Submitted May 12, 2004 – Filed July 23, 2004


AFFIRMED


Gerald F. Smith, of Columbia, for Appellant.

William Lee Duda, of Columbia, for Respondent.

PER CURIAM:  Quay Drakeford brought this action for breach of employment contract against his former employer, New South, Inc., asserting that an employee handbook created an employment contract and New South breached this employment contract and the implied covenant of good faith and fair dealing.  The trial court granted New South’s motion for summary judgment.  We affirm. [1]

FACTS

Drakeford was hired by New South, a lumber company, in 1995.  He worked there continuously until he was terminated in 2000.  Shortly before his termination, Drakeford was promoted to crew leader, supervising a six-person crew.  After Drakeford became crew leader, a member of his crew asked to be reassigned.  When questioned about her request, she began to cry and explained that Drakeford was a “bully” and intimidated her.  She stated he used a “hateful” tone of voice and attitude toward her.  Further investigation revealed several co-workers who said that Drakeford referred to the distressed crew-member as “whitey” when she was not around and made other racially charged comments.  Additionally, it was alleged he made verbal threats to another member of the crew. 

The investigation also resulted in co-workers disclosing an incident in which Drakeford allegedly used an open knife to point at another worker and made verbal threats to that worker.  The co-worker who had been threatened with the knife also stated that on another occasion, Drakeford came up behind him holding a piece of lumber drawn back like a bat and when discovered said, “I could have got him if I wanted.” 

Based on its investigation of these allegations, New South terminated Drakeford for creating a hostile work environment.  Drakeford sued New South for breach of an employment contract and the implied covenant of good faith and fair dealing.  Drakeford asserted that an employee handbook altered his at-will status, creating an employment contract and that New South breached the employment contract when it did not conform to an employee handbook policy creating a progressive disciplinary policy. [2]   The trial court granted New South’s motion for summary judgment, finding the employment handbook did not alter Drakeford’s at-will employment status, and without an employment contract there could be no implied covenant of good faith and fair dealing.  The court subsequently denied Drakeford’s motion to alter or amend the judgment.  This appeal followed. 

STANDARD OF REVIEW

“The purpose of summary judgment is to expedite the disposition of cases which do not require the services of a fact finder.”  Dawkins v. Fields, 354 S.C. 58, 69, 580 S.E.2d 433, 438 (2003).  Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.  Osborne v. Adams, 346 S.C. 4, 7, 550 S.E.2d 319, 321 (2001).  The evidence and all reasonable inferences therefrom must be viewed in the light most favorable to the non-moving party.  Id.  “It is well established that summary judgment should be granted ‘. . . in cases in which plain, palpable and indisputable facts exist on which reasonable minds cannot differ.’”  Anders v. S.C. Farm Bureau Mut. Ins. Co., 307 S.C. 371, 373, 415 S.E.2d 406, 407 (Ct. App. 1992) (quoting Main v. Corley, 281 S.C. 525, 526, 316 S.E.2d 406, 407 (1984)); see Bloom v. Ravoira, 339 S.C. 417, 425, 529 S.E.2d 710, 714 (2000) (finding where a verdict is not reasonably possible under the facts presented, summary judgment is proper). 

LAW/ANALYSIS

I.  Timeliness of appeal

New South argues that this court lacks jurisdiction to consider the appeal because Drakeford failed to timely serve the notice of appeal. [3]   We disagree. 

On August 22, 2002, Drakeford received written notice of the trial court’s order granting New South’s motion for summary judgment.  He timely served his motion to alter or amend the judgment on September 3, 2002. [4]   The trial court denied the motion in an order filed October 1, 2002.  Drakeford served the notice of appeal on October 25, 2002. 

Rule 203(b)(1), SCACR, provides,

A notice of appeal shall be served on all respondents within thirty (30) days after receipt of written notice of entry of the order or judgment.  When a timely motion for judgment n.o.v. (Rule 50, SCRCP), motion to alter or amend the judgment (Rules 52 and 59, SCRCP), or a motion for a new trial (Rule 59, SCRCP) has been made, the time for appeal for all parties shall be stayed and shall run from receipt of written notice of entry of the order granting or denying such motion. 

New South asserts that the timely filing of a motion to alter or amend merely tolls the running of the thirty day period for serving the notice of appeal rather than the thirty day period beginning anew after the appellant receives the order granting or denying the motion.  Thus, it contends the eleven days between Drakeford’s receipt of the original order and his service of the motion to alter or amend must be counted against his time for serving the notice of appeal.  

We disagree with this interpretation of the rule.  Rule 203(b)(1), SCACR, clearly states the time for serving the notice of appeal “shall run from receipt of written notice of entry of the order granting or denying [the timely post-trial motion].”  The supreme court reiterated, “Under Rule 59(f), when such a motion is made, the time for appeal from the judgment begins to run from the time of the order granting or denying the motion.”  Otten v. Otten, 287 S.C. 166, 167, 337 S.E.2d 207, 208 (1985).  Thus, Drakeford had thirty days from the date he received written notice of entry of the order denying his motion to alter or amend to serve his notice of appeal.  As he served the notice of appeal within thirty days of the trial court’s issuance of the order, we find he timely served his notice of appeal.  Thus, this court has jurisdiction to consider his appeal.                

II.  Breach of Contract

Drakeford argues the trial court erred in granting summary judgment because material issues of fact existed concerning whether New South’s employee handbook created an employment contract.  We disagree.

South Carolina recognizes the doctrine of employment at will in wrongful termination actions.  Prescott v. Farmers Tel. Coop., Inc., 335 S.C. 330, 334, 516 S.E.2d 923, 925 (1999).  Although some exceptions have been recognized, the doctrine of employment at-will remains in South Carolina as a longstanding economic incentive that provides the marketplace its necessary flexibility.  Prescott, 335 S.C. at 335, 442 S.E.2d at 925.  At-will employment may be terminated by either party at any time, for any reason or for no reason at all.  Prescott 335 S.C. at 334, 516 S.E.2d at 925.  The general rule is that termination of an at-will employee normally does not give rise to a cause of action for breach of contract.  Conner v. City of Forest Acres, 348 S.C. 454, 463, 560 S.E.2d 606, 610 (2002). 

However, an employer and employee may choose to contractually alter the general rule of employment at-will.  Prescott, 335 S.C. at 335, 442 S.E.2d at 925.  An employee handbook may create such a contract.  Small v. Springs, 292 S.C. 481, 485, 357 S.E.2d 452, 455 (1987).  The court in Small explained, “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.” Id. at 485, 357 S.E.2d at 455. 

Although the Small court instructed that an employer may continue at-will employment by inserting a conspicuous disclaimer into the handbook, the supreme court subsequently ruled a disclaimer is merely one factor to consider in ascertaining whether the handbook as a whole conveys credible promises that should be enforced.  Id.; Fleming v. Borden, 316 S.C. 452, 450 S.E.2d 589, 596 (1994).  The court in Fleming explained, “[A] handbook that contains both promissory language and a disclaimer should be viewed as inherently ambiguous.  Thus, . . . the entire handbook, including any disclaimer, should be considered in determining whether the handbook gives rise to a promise, an expectation and a benefit.”  Id. at 463-64, 450 S.E.2d at 596  (quoting Stephen F. Befort, Employee Handbooks and the Legal Effect of Disclaimers, 13 Indus.Rel.L.J. 326, 375-76 (1991-92)). 

After careful review of New South’s employee handbook, we find the provisions are written in permissive language and accompanied by effective disclaimers of any alteration of the at-will nature of employment.

The “Introductory Statement” in New South’s employee handbook specifically states that employment is at-will, and this sentiment is repeated throughout the text, including a section entitled “Nature of Employment.”  The general tenor of the handbook is as a source of information.  Additionally, upon receipt of the handbook, Drakeford signed a form that was part of the handbook in which he acknowledged “that this handbook is neither a contract of employment nor a legal document.”  He admitted he had read the handbook after receiving it.  Drakeford also clearly demonstrated his understanding of the basic principles underlying at-will employment, as he explained his understanding of the handbook provisions as follows:  “That the person that is the employer has the right under any circumstance even one that has been created, he can [terminate] you.  Even if you didn’t do what was stated that you did.”  Typically, the question of whether a disclaimer is conspicuous is a question of fact.  Williams v. Riedman, 339 S.C. 251, 264, 529 S.E.2d 28, 34 (Ct. App. 2000).  However, considering the written statements in the policy, the acknowledgment, and Drakeford’s professed knowledge, we find the only reasonable inference from the evidence is that New South made an effective disclaimer.

However, as stated above, the simple existence of a disclaimer is not determinative.  Instead, we must consider the actual language of the employment handbook to determine if the handbook’s provisions are couched in permissive or mandatory language.  Examples of mandatory language from Conner include:  “(1) violations of the Code of Conduct ‘will be disciplined,’ (2) ‘discipline shall be of an increasingly progressive nature,’ and (3) ‘all employees shall be treated fairly and consistently in all matters related to their employment.’”  Conner, 348 S.C. at 464 n.4, 560 S.E.2d at 611 n.4. 

We agree with the trial court’s determination that the relevant sections of the New South employee handbook were couched in permissive language.  The section on “Progressive Discipline” specified:

Although employment with New South is based on mutual consent and both the employee and New South have the right to terminate employment at will, with or without cause or advance notice, New South may use progressive discipline at its discretion.  (emphasis added).

The provision further provided that “[d]isciplinary action may call for any of three steps,” and “[t]here may be circumstances when one or more steps are bypassed.”  (emphasis added).  When detailing the progressive policy, New South stated that: 

Progressive discipline means that, with respect to most disciplinary problems, these steps will normally be followed:  a first offense may call for a verbal written warning; a next offense may be followed by a written warning; another offense of the same nature within 6 months may result in termination, or receipt of a third written reprimand for different offenses within a 12 month period may then lead to termination of employment.

(emphasis added).  In this provision, New South recognized “certain types of employee problems . . . are serious enough to justify either a suspension during investigation, or, in extreme situations, termination of employment, without going through the usual progressive discipline steps.”  (emphasis added). 

The “Progressive Discipline” provision also referenced an “Employee Conduct and Work Rules” policy, and stated that it “includes examples of problems that may result in immediate suspension or termination of employment.”  (emphasis added).  The “Employee Conduct and Work Rules” policy declares itself to be a non-exclusive list of conduct that “may result in disciplinary action, up to and including termination of employment. . .”  (emphasis added).  Included in the list of unacceptable behavior is “[f]ighting or threatening violence in the workplace,” “disrespectful conduct,” and “unlawful or unwelcome harassment.”  This policy provision concludes by stating “[e]mployment with New South is at the mutual consent of New South and the employee, and either party may terminate that relationship at any time, with or without cause, and with or without advance notice.” 

Drakeford relies on Jones v. General Electric Co., 331 S.C. 351, 503 S.E.2d 173 (Ct. App. 1998) in his argument for reversal of the trial court’s grant of summary judgment.  The handbook in Jones also included a list of possible offenses in its Work Rules section. Class I violations were described as behaviors ‘“in which a single offense subjects the involved employee(s) to discharge”’ while Class II offenses provided for progressive discipline for repeated violations and were described as “‘offenses which, with repetition, will lead to disciplinary time off and/or discharge.”’  Id. at 366-37, 503 S.E.2d at 181-82.  The Work Rules section of the handbook in Jones, especially for Class II violations, used clearly mandatory language with regard to punishment.  Furthermore, Jones testified that the G.E. representatives instructed the new employees during orientation that the handbook was G.E.’s “bible,” and that they abided by the procedures described therein.  Id.  at 368, 503 S.E.2d at 182.  This court concluded, “[T]here is a material question of fact as to whether G.E.’s employee handbook, particularly the section entitled Work Rules, established mandatory procedures or whether the handbook contains merely permissive provisions outlining employee conduct.”  Id. at 370, 503 S.E.2d at 183.

In contrast to the handbook in Jones, the New South handbook consistently used permissive language when discussing behavioral offenses and punishment.  Accordingly, we find the facts of the present case distinguishable from those in Jones

Drakeford also argues that his termination violates the “Problem Resolution (Grievance)” policy of the employee handbook because New South made a commitment to an open and frank atmosphere in which problems or complaints would be heard.  The handbook  provision upon which Drakeford relies stated a general commitment to fair treatment and specifically promised that “[n]o employee will be penalized, formally or informally, for voicing a complaint with New South in a reasonable, business-like manner, or for using the problem resolution procedure.”  This provision does not make any promise related to Drakeford, as he did not pursue the “Problem Resolution (Grievance)” steps that are outlined in the policy. 

Drakeford further argues the trial court erred in not considering the entire handbook and only focusing on the relevant provisions.  However, the circuit court explained in the preamble of its order that it had considered all evidence in the record, and the entire contract was in the record. 

Furthermore, our own review of the employment handbook demonstrates that New South had assumed through mandatory language only finite and limited duties.  New South used mandatory language to describe its duty to be an equal opportunity employer, make reasonable accommodations under the Americans with Disabilities Act, comply with legal obligations, provide specified employment benefits, give paid holiday time for specified holidays, comply with workers’ compensation law, give specified sick day benefits, give jury duty benefits, provide short and long term disability benefits, offer a 401(k) savings plan, pay the employees on specified paydays, make certain pay deductions as required by law, pay overtime, investigate all reports of workplace violence, and provide various forms of leave.  Many of the duties accepted by New South in its employee handbook are required by law or provide guidelines that are essential to the operation of a business.  To use these duties to find that an employee’s status had been altered from at-will would severely undermine the at-will doctrine so as to make an informational employment handbook impossible.

After reviewing the employment handbook at question in its entirety, we conclude Drakeford’s at-will status was not altered.  See Darby v. Horton Elec. Co., Op. No. 25839 (S.C. Sup. Ct. filed July 6, 2004) (Shearouse Adv.Sh. No. 28 at 14, 23) (stating employer’s manual exemplified the appropriate manner in which to give employees a guide regarding their employment without altering the at-will employment relationship where the manual contained conspicuous disclaimers, which the employee understood and the disciplinary procedure contained permissive language and did not provide for mandatory progressive discipline).  Accordingly, we find the trial court did not err in granting summary judgment to New South on Drakeford’s claim for breach of employment contract and breach of the implied covenant of good faith and fair dealing. [5]

AFFIRMED.

ANDERSON, HUFF, and KITTREDGE, JJ., concur. 


[1]   We decide this case without oral argument pursuant to Rule 215, SCACR.

[2] The “Progressive Discipline” policy states “a first offense may call for a verbal warning; a next offense may be followed by a written warning; another offense of the same nature within 6 months may result in termination. . . .” 

[3] New South originally raised this argument in a motion to dismiss.  This court denied the motion on February 13, 2003.  New South renewed its argument in its Respondent’s brief. 

[4] Monday, September 2, 2002, was Labor Day. 

[5] The implied covenant of good faith and fair dealing is predicated upon the existence of a contract.  Williams v. Riedman, 339 S.C. 251, 274, 529 S.E.2d 28, 40 (Ct. App. 2000).  As we have concluded the trial court properly determined the employment handbook did not alter Drakeford’s at-will status and thus no contract existed, Drakeford’s cause of action for breach of an implied covenant of good faith and fair dealing must fail.