A jury has returned an $868,000 verdict for an employee’s wrongful termination in an unusual case illustrating what “not to do” when discharging an employee. The verdict is believed to be one of the largest ever in South Carolina involving breach of an oral promise. Parker v. The National Honorary Beta Club, No. 2014-CP-42-1759 (Spartanburg County Court of Common Pleas).

The Case

The plaintiff, Denise Parker, had worked in administration and data input for the National Honorary Beta Club, a youth leadership organization, for 38 years before she was terminated. The Beta Club had never disciplined her and consistently gave her positive performance evaluations during her lengthy service.

In 2013, the Beta Club hired a new Chief Executive Officer. The new CEO allegedly had a harsh management style that negatively affected morale and caused many employees to fear for their jobs. The CEO issued Parker a vague reprimand that she was not being professional and warned her that “there’s people lined up out there in the street waiting on your job.”

Parker had previously been elected to a staff committee that reported employee concerns to Beta Club’s board of directors. At a board meeting, Parker was asked to discuss the reprimand she received. Parker told the board she did not want to discuss it because she was worried about losing her job. She testified that a board member then told her, “Denise, if we ask you a question, you have to answer it, and [the CEO] can’t fire you for answering our questioning.”

Thus assured, Parker told the board about her interactions with the CEO. Less than two weeks later, the CEO fired Parker for being negative at the board meeting and failing to promptly respond to emails. According to Parker, the only emails she did not respond to were spam.

Parker sued the Beta Club claiming breach of an oral contract and fraud. The Beta Club moved for summary judgment, arguing the case should be thrown out because Parker had signed a disclaimer that she was employed “at will” and could be fired with or without cause. The motion was denied. The trial court reasoned the disclaimer did not effectively disclaim future oral promises to not terminate her and did not meet the standards of the South Carolina statute governing employee handbook disclaimers.

At a three-day trial, the Beta Club presented witnesses testifying that Parker was fired for being disruptive and not getting along with coworkers. Parker offered her own testimony and coworkers who backed her story. After deliberating, the Spartanburg, South Carolina, jury found that the Beta Club breached an oral promise to not fire her and returned a verdict for Parker, awarding her $518,000 in lost wages and benefits and $350,000 in punitive damages.

Lessons

The case presents lessons for management seeking to avoid a similar result.

  • First, management should avoid making verbal promises to an employee that he or she will not be fired or guaranteeing other terms and conditions of employment that an employee could be expected to rely upon. Although vague assurances of job security generally are not sufficient to alter at-will employment, even oral promises can create an employment contract if they contain specific terms, as was the case here. If management wishes to enter into an employment contract, the agreement should be in writing, drafted (or reviewed) by counsel, and signed by the employee and the employer. Likewise, employee handbooks should include appropriate disclaimers and be reviewed by counsel for legal compliance. In South Carolina, for example, failure to meet specific statutory requirements on disclaimer content and formatting can lead to breach of contract claims.
  • Second, disciplinary reprimands should be specific. Merely stating that an employee is being disruptive or unprofessional creates a weak evidentiary record. Any discipline should be documented and should identify specific examples of misconduct or performance problems.
  • Third, management must be on the same page. In this case, the CEO was clearly out of sync with the board of directors. Had lines of communication been more open, the CEO would have known of the board’s promise to not fire Parker and fired her only if there was a legitimate reason unrelated to her participation in the board meeting.
  • Fourth, employees should be treated with respect prior to, during, and after termination. Many wrongful termination lawsuits are filed simply because an employee perceives unfair treatment. Similarly, juries expect employees to be treated fairly and can be quick to punish employers without good, well-documented reasons for termination. This is especially true for employees who (1) have favorable performance evaluations and (2) have been employed by the company for many years. Juries expect that employers reward good work and reciprocate an employee’s long-term loyalty.