As we have previously discussed, every state except for Montana has a default position of at-will employment. When employers publish employee handbooks, it is generally best practice to start that handbook with a conspicuous disclaimer that reminds employees that they are employed at-will, that the policies contained in the handbook do not guarantee employment for any specified period, and that the employer is not contractually bound to follow the terms of every policy in the handbook as published. Courts across the country have dismissed employees’ breach of contract claims because employers included conspicuous disclaimers at the beginning of their handbooks.
South Carolina, however, goes above and beyond other states in defining what makes a disclaimer sufficiently conspicuous. In South Carolina, the disclaimer must be on the first page of the handbook. Moreover, it must be underlined and in capital letters. Finally, it must be signed by the employee.
Failure to include this conspicuous language in the required style on the first page does not necessarily mean employees’ at-will status will be lost. However, if an employer ignores South Carolina’s disclaimer law, there is a greater risk a court will hold that a handbook creates a binding employment contract.
Depending on the facts, a South Carolina employer that used a non-compliant disclaimer would likely prevail in a breach of contract lawsuit most of the time. However, that employer might be less likely to prevail on an easy motion to dismiss, resulting in the risk of longer litigation, higher attorneys’ fees, and more time and energy diverted from a focus on the employer’s business.
