[H]all was the manager of the Greenville branch of UBS. On September 1, 2017, Hall organized an employee happy hour which several UBS employees, including Reid, attended.1 Throughout the event, Reid mentioned she was having issues with her boyfriend and was scared to go home. Hall offered to let Reid stay at his home for the evening. At the end of the happy hour, Hall invited everyone still present to dinner at a nearby restaurant, but only Reid and one of her friends joined him. After dinner, Reid and her friend gave Hall a ride home, with Reid joining Hall in the backseat while her friend drove. When they arrived at his home, Hall again asked Reid if she would be alright and she said she would be. Hall then gave Reid a "European-style consolatory cheek kiss" and exited the vehicle. Later that evening, Hall texted Reid to confirm she was okay. Hall repeated his offer for Reid to stay with him and told her he was outside his home with his dog. Reid responded to Hall's comment about his dog but did not respond to Hall's offer for her to stay with him.Reid reported her version of the events of the evening to UBS's human resources department (HR). HR questioned Hall about the evening, and Hall explained his version of events. According to Hall, Reid fabricated certain events of the evening and also fabricated Hall's general advances towards her and Hall's relationships with other employees in the Greenville office. UBS fired Hall a few weeks after Reid's report. This action followed. Pertinent to the certified questions are Hall's cause of action against UBS for breach of the implied covenant of good faith and fair dealing and Hall's cause of action against Reid for tortious interference with contractual relations. 2= = =Footnote 1: During oral argument, counsel for Reid referred to Reid as Hall's subordinate. This alleged fact is not in the certification order, and it has no bearing upon our answers to the certified questions.Footnote 2: During oral argument, Hall's counsel stated Hall's wife and child were home with Hall. This alleged fact is not in the certification order, and it has no bearing upon our answers to the certified questions.
I. Are terminable-at-will employment relationships contractual in nature as a matter of law?II. Does the implied covenant of good faith and fair dealing arise in the context of terminable-at-will employment relationships, and can an employer's termination of an at-will employee constitute a breach of the relationship such that it may give rise to a claim by the former employee against the employer for breach of the implied covenant of good faith and fair dealing?III. Can an employer's termination of an at-will employee, which results from a third-party employee's report to the employer, constitute a breach of the relationship such that it may give rise to a claim by the former employee against the third-party employee for tortious interference with a contractual relationship?
[A]ll at-will employment relationships, whether they are memorialized in a written contract stipulating the at-will nature of the employment or orally formed simply out of circumstance, are contractual relationships. When an employer offers to pay an employee to perform a service for a price and the employee performs that service, a contract is formed. Of course, our recognition that at-will relationships are contractual does not alter the established rule allowing an employer to discharge an at-will employee for any reason without incurring liability. That is because under South Carolina law, the right to fire the employee at any time and for any reason is an integral term of the at-will contract. We answer the first certified question "yes."
A. Does the covenant arise in at-will employment relationships?
The SCSupCt affirms that the implied covenant of good faith and fair dealing does NOT arise in at-will relationships. That pretty much resolves this point. Except it doesn't. Nope. Citing its prior finding in the first certified question that at-will relationships are, in fact, "contractual," the state court now asserts that:
[I]n light of our answer to the first certified question, this rationale is no longer valid. The implied covenant of good faith and fair dealing exists in at-will employment contracts.
at Page 7 of the SCSupCt Opinion
B. Can an employer's termination of an at-will employee give rise to a claim by the former employee against the employer for breach of the implied covenant of good faith and fair dealing?
Having thrown precedent to the winds in its finding above, SCSupCt now asserts that:
As we explained above, every contract includes the implied covenant of good faith and fair dealing. It is clear then that if a party to a contract believes another party to the contract has breached the implied covenant of good faith and fair dealing, the cause of action is simply one for breach of contract. . . .at Page 8 of the SCSupCt Opinion
What was once, isn't anymore, and with a wave of its judicial wand, SCSupCt invalidates its precedent in favor of imposing an implied covenant of good faith and fair dealing upon at-will employment, which would give rise to a breach of contract. Upon this revised landscape, the state court repaints a more nuanced picture:
It follows then that the implied covenant of good faith and fair dealing, while it exists in the at-will employment contract, does not infringe upon the employer's right to do what the contract allows him to do-terminate the employee for any reason. The employer's motive for firing the employee is immaterial, and the employer may fire the employee-even for a bad reason-without incurring liability for breach of the implied covenant of good faith and fair dealing. We answer Question II in its entirety as follows: The implied covenant of good faith and fair dealing exists in an at-will employment contract; however, the employer's termination of the employee cannot form the basis of a claim that the employer breached the covenant of good faith and fair dealing.4at Pages 8 - 9 of the SCSupCt Opinion= = =Footnote 4: During oral argument, Hall stated his claim for breach of the implied covenant of good faith and fair dealing was not founded upon UBS firing him, but instead upon UBS's submission of a report detailing Hall's actions to the Financial Industry Regulatory Authority (FINRA). Since the record does not include Hall's complaint, we do not know what actions Hall alleged as the basis for his claim for breach of the implied covenant of good faith and fair dealing, and our answers to the district court's questions are based on the limited record before us. The district court can resolve any questions related to FINRA.
We revise this question to read as follows: Can an employer's termination of an at-will employee, which results from a third-party employee's report to the employer, give rise to a claim by the terminated employee against the third-party employee for tortious interference with a contractual relationship, even when the termination itself was not a breach of the at-will contract? We revise the question because the threshold viability of the terminated at-will employee's tortious interference claim against the third-party employee does not depend upon whether the employer's termination of the employee was a breach of the at-will contract; instead, the threshold viability of the claim depends upon whether the third-party employee, without justification, made a report to the employer which induced the employer to terminate the at-will employee.The district court has presented the narrow question of whether a third-party employee's interference can be actionable. The majority view across the country extends liability not only to third-party employees but also to any third party who intentionally and unjustifiably interferes with the at-will relationship. As we answer the district court's narrow question, we will also answer the broader question.
[W]e hold the absence of an underlying breach by the terminating employer does not shield the third party from liability when she intentionally and unjustifiably procures the termination of an at-will employee. Therefore, we answer Question III, as modified, "yes."
BEATTY, C.J., KITTREDGE and HEARN, JJ., concur. FEW, J., concurring in part and dissenting in part in a separate opinion.
I appreciate the majority's very fine explanation of our answers to the district court's first and second questions. I completely agree with the majority's answer and explanation as to the first question. As to the second question, I agree with the answers given, but I would explain the answer to the second part of the question in slightly different terms. The manner in which I suggest we explain our answer to the second part of the second question-in my opinion-requires a different answer to the third question than the answer given by the majority.
[T]herefore, it is not possible for "an employer's termination of an at-will employee . . . [to] give rise to a claim by the terminated employee against the third-party employee for tortious interference with a contractual relationship.". . .There is an additional reason I would answer the third question "no." In this case, if Reid's report is accurate-in other words if Hall made sexual advances to her or otherwise treated her in a professionally inappropriate manner-then she did nothing actionable in reporting Hall's conduct to UBS. In that event, any consequences Hall faces result not from Reid's report but from his own wrongful conduct. Reid's report is actionable, and thus may be the cause of Hall's damages, only to the extent the report is false. In that event, Hall has other theories of recovery against Reid, such as defamation. I would require an employee who is fired from an at-will position as a result of a false report to the employer to rely on defamation, which provides defenses and privileges to the party making the report that the law holds appropriate in a civil action based on a false statement.