S.E. 2d
THE STATE OF SOUTH CAROLINA
In The Supreme Court
David M. Prescott, Respondent,
v.
Farmers Telephone
Cooperative, Inc., Petitioner.
ON WRIT OF CERTIORARI TO THE COURT OF
APPEALS
Appeal From Sumter County
Linwood S. Evans, Jr., Special Circuit Court Judge
Opinion No. 24948
Heard April 21, 1999 - Filed June 1, 1999
REVERSED
William E. Durant, Jr., and Michael M. Jordan, of
Schwartz, McLeod, Durant, and Jordan, of Sumter, for
petitioner.
J. Edward Bell, III, of Bell & Moore, of Sumter, for
respondent.
Robert L. Widener and Richard J. Morgan, of McNair
Law Firm, of Columbia, for amicus curiae South
Carolina Telephone Association.
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PRESCOTT v. FARMERS TELEPHONE
Benjamin A. Johnson and Stephen M. Cox, of Robinson,
Bradshaw & Hinson, P.A., of Rock Hill, for amici curiae
The South Carolina Chamber of Commerce and The
South Carolina Manufacturers Alliance.
BURNETT, A.J.: The Court granted a writ of certiorari to review
the decision of the Court of Appeals in Prescott v. Farmers Tel., Coop., Inc., 328
S.C. 379, 491 S.E.2d 698 (Ct. App. 1997) (Stilwell, J., dissenting). We
reverse.
BACKGROUND
Respondent David M. Prescott (Prescott) brought this wrongful
discharge action against his former employer, Petitioner Farmers Telephone
Cooperative, Inc. (FTC). Prescott alleged various causes of action, including
breach of an employment agreement, breach of the implied duty of good faith and
fair dealing, defamation, intentional interference with an economic relationship,
and promissory estoppel. He also sought specific performance of the employment
contract. The trial court granted FTC summary judgment on all claims except
defamation. Prescott appealed.
The Court of Appeals affirmed in part, reversed in part, and
remanded. Id. In relevant part, the Court of Appeals held FTC's employment
handbook did not alter Prescott's status as an at-will employee and, thereby, FTC
could terminate Prescott without cause. Id. The Court of Appeals also held
alleged oral assurances by Prescott's supervisors created a jury issue as to
whether Prescott had a contract of employment with FTC requiring termination
to be for cause. Id. The issue on the writ of certiorari concerns this second
ruling.
FACTS
In March 1972, Prescott was hired by FTC as a lineman. Over time,
he was promoted. In 1992, Prescott was terminated for lying.
Thereafter, Prescott filed this lawsuit. By way of deposition, Prescott
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PRESCOTT v. FARMERS TELEPHONE
testified he received an employee handbook several months after he was hired.1
He stated it was his understanding from the employee handbook and through
discussions with three supervisors that, "[a] s long as you do your job, keep your
nose clean, that you'd have a job at Farmers Telephone right on." Prescott
testified he interpreted "keeping your nose clean" as "don't go out there and get
into trouble and do things you're not supposed to be doing."
At the hearing on FTC's motion for summary judgment, Prescott
presented his affidavit to the trial court. In this affidavit, Prescott asserted, at the
time he was hired, FTC officials told him he would have a job with FTC "as long
as [he did his] job, [kept his] nose clean." He stated he interpreted this to mean
"that my employment would continue so long as I performed my employment
duties and refrained from engaging in misconduct." Prescott further stated,
during the years following his hire, supervisors reiterated the same statement.
According to Prescott, FTC issued a new employee manual in 1988.2 Even after
its issuance, Prescott's supervisors told him "as long as you do your job, keep
your nose clean, that you'd have a job at Farmers Telephone." According to
Prescott, he was hired as an employee of definite duration who could only be
terminated for cause and, over his twenty-year employment, his status was orally
confirmed by supervisors, in spite of any statements to the contrary in
employment manuals.
FTC denied these allegations, responding the 1988 employee
handbook contained a disclaimer which stated all employees are at-will and may
be terminated at any time without notice.
1 According to Prescott, the 1972 handbook specifically provided employees
could only be terminated for cause. Since this handbook does not appear in the
Appendix, the Court will not consider the effect of the document. Rule 209(h),
SCACR (appellate court will not consider any fact which does not appear in the
[Appendix]); see also Zaman v. South Carolina State Bd. of Medical Examiners,
305 S.C. 281, 408 S.E.2d 213 (1991) (where record provides no factual basis, the
Court will not consider the issue).
2 The Appendix indicates FTC issued an employee handbook in 1979 and a
document entitled "Personnel Policies" in 1988.
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PRESCOTT v. FARMERS TELEPHONE
ISSUE
Did the Court of Appeals err by holding the oral statement by
Prescott's supervisors created a jury issue as to whether Prescott's
status as an at-will employee was altered?
DISCUSSION
South Carolina has long recognized the doctrine of employment at
Will. Pursuant to this doctrine, "a contract for permanent employment, so long as
it is satisfactorily performed which is not supported by any consideration other
than the obligation or service to be performed on the one hand and wages to be
paid on the other, is terminable at the pleasure of either party." Shealy v. Fowler,
182 S.C. 81, 87, 188 S.E. 499, 502 (1936). At-will employment is generally
terminable by either party at any time, for any reason or for no reason at all.
Todd v. South Carolina Farm Bureau Mut. Ins. Co., 276 S.C. 284, 278 S.E.2d 607
(1981), appeal after remand, 283 S.C. 155,321 S.E.2d 602 (Ct. App. 1984), writ
granted in part, 285 S.C. 84, 328 S.E.2d 479 quashed, 287 S.C. 190, 336 S.E.2d 472
(1985); Culler v. Blue Ridge Elec. Coop. Inc., 309 S.C. 243, 245, 422 S.E.2d 9t, 92
(1992) (doctrine of employment at-will in its pure form allows an employer to
discharge an employee for good reason, no reason, or bad reason without
incurring liability). The termination of an at-will employee normally does not give
rise to a cause of action for breach of contract. Hudson v. Zenith Engraving Co.,
Inc., 273 S.C. 766, 259 S.E.2d 812 (1979).
Although this Court has recognized exceptions to employment at
will,3 the doctrine remains in force in South Carolina. We find the policy of
employment at-will provides necessary flexibility for the marketplace and is,
ultimately, an incentive to economic development. Accordingly, we affirm and
3 See Small v. Springs Industries, Inc., 292 S.C. 48t, 357 S.E.2d 452
(1987) (employer may not discharge employee in violation of procedures set forth
in employee handbook); Ludwick v. This Minute of Carolina, Inc., 287 S.C. 219, 337
S.E.2d 213 (1985) (an at-will employee may not be discharged in violation of a
clear mandate of public policy); Moshtaghi v. The Citadel, 314 S. C. 316, 443 S.E.2d
915 (Ct. App. 1994) (an at-will employee may not be terminated for exercising
constitutional rights).
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PRESCOTT v. FARMERS TELEPHONE
adhere to the employment at-will doctrine in South Carolina.
Of course, an employer and employee may choose to contractually
alter the general rule of employment at-will and restrict their freedom to
discharge without cause or to resign with impunity. See Small v. Springs
Industries, Inc., 292 S.C. 481, 357 S.E.2d 452 (1987) (employment at-will limited by
employer's issuance of employee handbook setting forth progressive discharge
procedures); Weber v. Perry, 201 S.C. 8, 21 S.E.2d 193 (1942) (employee is not at
will where he provides consideration in addition to the provision of
services).
General contract law provides that a "contract exists when there is
an agreement between two or more persons upon sufficient consideration either
to do or not to do a particular act." Carolina Amusement Co., Inc. v. Connecticut
Nat. Life Ins. Co., 313 S.C. 215, 220, 437 S.E.2d 122, 125 (Ct. App. 1993), quoting
Benya v. Gamble, 282 S.C. 624, 628, 321 S.E.2d 57, 50 (Ct. App. 1984). A contract
may arise from oral or written words or by conduct. Gaskins v. Blue Cross-Blue
Shield of South Carolina, 271 S.C. 1011 245 S.E.2d 598 (1978).
In the employment context, we have already recognized that a
contract altering the at-will arrangement may arise, in part, from the oral
statement of the employer. In King v. PYA/Monarch, Inc., 317 S.C. 385, 453 S.E.2d
885 (1995), we held a written employment agreement which stated employment
was at-will was modified by the issuance of a written reprimand and a
supervisor's oral statement that two other warnings would be required before the
employee could be terminated.4 Applying this law and general contract
principles, we hold the at-will status of an employee may be altered by an oral
contract of definite employment.
In order to prove the existence of a definite contract of employment,
the employee must establish all of the elements of a contract. Most employment
agreements are unilateral. Small v. Springs Industries, Inc., supra. A unilateral
contract has the following three elements: 1) a specific offer, 2) communication of
the offer to the employee, and 3) performance of job duties in reliance on
the
4 We have also recognized oral employment contracts where the employee
provides consideration in addition to the provision of services. Weber v. Perry,
201 S.C. 8, 21 S.E.2d 193 (1942). When this occurs, the employment is no longer
at-will.
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PRESCOTT v. FARMERS TELEPHONE
offer.5 82 Am.Jur.2d Wrongful Discharge § 84 (1992).
"An offer is the manifestation of willingness to enter into a bargain,
so made as to justify another person in understanding that his assent to that
bargain is invited and will conclude it." Carolina Amusement Co., Inc. v.
Connecticut Nat. Life Ins. Co., supra, at 220, S.E.2d at 125, quoting Restatement
(Second) of Contracts § 24 (1981). "The offer identifies the bargained for
exchange and creates a power of acceptance in the offeree." Carolina
Amusement Co., Inc. v. Connecticut Nat. Life Ins. Co., supra, at 220, S.E.2d at 125,
quoting Restatement (Second) of Contracts § 29 (1981).
"Any conduct from which a reasonable person in the offeree's
position would be justified in inferring a promise in return for a requested act ...
amounts to an offer." Carolina Amusement Co., Inc. v. Connecticut Nat. Life Ins.
Co., supra, at 220, S.E.2d at 125, quoting Broadway. Jeffers, 185 S.C. 523, 530-31,
194 S.E. 642, 645 (1938). To be binding, an offer must be definite. In addition, it
must "be one which is intended of itself to create legal relations on acceptance."
McLaurin v. Hamer, 165 S.C. 411, 420, 164 S.E. 2, 5 (1932).
Construing all ambiguities, conclusions, and inferences in the
evidence in favor of Prescott,6 we find Prescott failed to establish FTC made an
offer to alter his at-will employment status. The alleged offer, "[a]s long as you do
your job, keep your nose clean, that you'd have a job at Farmers Telephone right
on" is not sufficiently explicit to constitute an offer to limit termination to just
cause. We conclude a reasonable person in Prescott's position would construe
the statement as praise or encouragement, or even "puffery," rather than as an
offer of definite employment. Vague assurances of job security, even if repeated,
do not give rise to contractual rights. See Broussard v. Cad Inc.-Fed., 780 F.2d
162 (1" Cir. 1986) (representation "if [employee] did a good job he would have
long-term employment" is not express undertaking to guarantee employee could
5 A unilateral contract is one "in which there is a promise on one side only;
the consideration on the other side being executed." McMahan v. McMahon, 122
S.C. 336, 340, 115 S.E. 293, 294 (1922).
6 In ruling on motions for summary judgment, the court must construe all
ambiguities, conclusions, and inferences arising from the evidence against the
moving party. True v. Monteith, 327 S.C. 116, 489 S.E.2d 615 (1997).
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PRESCOTT v. FARMERS TELEPHONE
be discharged only for good cause); Eyerman v. Mary Kay Cosmetics, Inc., 967
F.2d 213 (6th Cir. 1992) (discussions concerning nursing homes for retired
directors and other retirement benefits and representative's question "if
[employees] wanted to receive a Cadillac every two years for the rest of their
lives," were insufficient to constitute promise to alter at-will contract); Chastain v.
Kelly-Springfield Tire Co., 733 F.2d 1479 (11th Cir. 1984) (statement by employer
that "jobs was (sic) secure; that we could continue on like we had been ... [i]f we
did our jobs, kept our noses clean, didn't make waves and not sell to Goodyear
and Kelly accounts" was not intent to offer lifetime employment); Rowe v.
Montgomery Ward & Co., 473 N.W.2d 268, 273 (Mich. 1991)(employee based just
cause employment on supervisor's statement as long as you sold, you would have
a job at the store; oral statements creating a contract to terminate only for cause
"must be based on more than an expression of an optimistic hope of a long
relationship"); Lawson v. Boeing Co., 792 P.2d 545 (Wash. App. 1990) (repeated
oral promises alleging guaranteed position. so long as employee's job performance
met a certain level was insufficient to create material fact of employment
contract).7
Since Prescott failed to establish FTC offered him definite
employment, he failed to establish the existence of a contract which altered his
status as an at-will employee.8 Accordingly, the Court of Appeals erred in
reversing the trial judge's order granting summary judgment to FTC on Prescott's
cause of action for breach of an employment agreement.
We dispose of FTC's remaining arguments pursuant to Rule
220(b)(1), SCACR, and the following authorities: Issue VIII: Townsend v. City o
Dillon, 326 S.C. 244, 486 S.E.2d 95 (1997)(an issue not ruled upon by trial court is
not preserved for appeal); Taylor v. Medenica, 324 S.C. 200, 479 S.E.2d 35 (1996) (a
party may not argue one ground at trial and an alternate ground on appeal);
Zaman v. South Carolina State Bd. of Medical Examiners, supra (record
must
7 We refer to these cases solely for purposes of illustration.
8 Prescott asserts the alteration of his employment status is a non-issue
because he was hired as a term employee. We disagree. Since there is a
presumption of at-will employment, it is necessary to consider whether an offer
alters the presumption, regardless of whether the offer occurs at the initial hire or
during the employment.
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PRESCOTT v. FARMERS TELEPHONE
show issue was raised to trial court); Germain v. Nichol, 278 S.C. 508, 299 S.E.2d
335 (1983) (appellant has burden of providing the Court with a sufficient record
upon which Court can make a decision).9
REVERSED.
TOAL, A.C.J., MOORE, WALLER, and Acting Associate
Justice George T. Gregory, Jr., concur.
9 As to FTC's argument Prescott failed to appeal the trial judge's description
of the oral statement as "merely vague oral remarks about job security," we find
Prescott clearly presented this issue in his brief to the Court of Appeals.
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