South Carolina courts have long recognized the doctrine of at-will employment, which allows either the employer or the employee to terminate the employment relationship at any time for any reason or for no reason. Since 1985, the South Carolina courts have created exceptions to the at-will employment doctrine. For instance, the courts have held that an employer may be liable if it discharges an employee in violation of a recognized public policy. Generally, the public policy exception applies when an employer requires an employee to violate the law or when the reason for the employee's termination is itself a violation of criminal law.
Last fall, the South Carolina Court of Appeals appeared to be leaning toward broadening the public policy exception in Nolte v. Gibbs International, Inc. Nolte, a certified public accountant, worked as controller of Gibbs International. He was an at-will employee. Gibbs terminated Nolte's employment telling him his position was being eliminated. Nolte challenged that discharge alleging he was terminated in violation of public policy. During the course of his employment, Nolte questioned use of the company account to pay personal expenses and questioned certain payments as being unlawful kickbacks. He brought suit claiming that he was wrongfully discharged in violation of public policy because he objected to Gibbs' allegedly unlawful accounting practices.
The circuit court dismissed the claim apparently on the basis that Nolte was an at-will employee and that he was not terminated in violation of public policy. The Court of Appeals disagreed and reinstated the case finding that Nolte had presented sufficient evidence to create a genuine dispute of material fact as to whether he was discharged in violation of a clear mandate of public policy. In that decision the Court of Appeals held that with further factual development, Nolte might be able to establish that his compliance with Gibbs' requests would have violated a number of state and federal laws. The court then elaborated on what type of employer conduct or actions might violate the state's public policy. The court stated as follows:
[A public policy] cause of action may still result if Nolte's discharge resulted from his refusal to participate in Gibbs' unlawful or unethical conduct. Our Supreme Court has stated that the public policy exception is not limited to situations where an employer requires an employee's violation of criminal law, or to situations where the reason for the employee's termination is itself a violation of criminal law. . . The public policy exception "is more easily stated than judicially applied. The difficulty rests in determining a precise definition of the expression 'public policy.' Hence, the public policy exception has been extended by some courts to particular job terminations not recognized by others." . . . Some courts have recognized a cause of action for wrongful discharge where an employee was terminated after refusing to participate in an employer's unlawful or unethical acts. . ..
Certainly, the language of this paragraph appears to indicate that the court might broaden the public policy exception. In fact, the language impliedly suggests that the court would consider broadening the exception to include "public policy" violations which did not have a statutory basis or connection.
The Court of Appeals reconsidered its decision at Gibbs' request and on March 1, 1999, refiled its opinion with modifications. The court continued to hold that Nolte had presented sufficient evidence to create a genuine dispute of material fact as to whether he was discharged in violation of a clear mandate of public policy. Specifically, the court continued to find that material factual issues existed as to whether Nolte was asked to violate various federal and state statutes. However, the court deleted from its previous opinion the paragraph (quoted above) in which it speculated on the type of employer conduct which might violate the state's public policy and create potential liability for wrongful discharge. This deletion may be significant in that it may indicate the court's reluctance to further broaden the public policy exception to the wrongful discharge doctrine.
The Nolte decision is another example of the constantly evolving exceptions to the at-will employment doctrine. We expect the South Carolina courts will continue to clarify and modify the exceptions in the future.
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