Opinion
Civil Action 6:23-2691-JDA-KFM
04-03-2024
Allyson C. Bergin as Personal Representative of the Estate of Molly A McKenzie, Plaintiff, v. 4 Aces Kitchen & Bar, LLC d/b/a 4 Aces Kitchen & Cocktails, Defendant.
REPORT OF MAGISTRATE JUDGE
Kevin F. McDonald, United States Magistrate Judge
This matter is before the court on the partial motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) filed by 4 Aces Kitchen & Bar, LLC (“the defendant”) (doc. 26). Pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and Local Civil Rule 73.02(B)(2)(g) (D.S.C.), all pretrial matters in employment discrimination cases are referred to a United States Magistrate Judge for consideration.
BACKGROUND AND FACTUAL ALLEGATIONS
According to the amended complaint, the defendant owns and operates a restaurant and bar in Greenville County, South Carolina (doc. 24 ¶ 5). The defendant hired Molly McKenzie (“Ms. McKenzie”), a female over the age of 40, as a general manager of the restaurant in May 2021 (id. ¶ 6, 13). Ms. McKenzie worked in this position until late March or early April 2022, when the defendant terminated her employment (id. ¶¶ 8-11). At all times relevant to Ms. McKenzie's employment, the defendant maintained various policies and procedures set forth in an employee handbook, which included a disciplinary policy (id. ¶ 7).
The plaintiff alleges that on March 27, 2022, while still employed by the defendant, Ms. McKenzie was hospitalized after suffering an acute mental health crisis and attempting to take her own life (doc. 24 ¶ 8). Ms. McKenzie was hospitalized for inpatient treatment for ten days (id.). On the same day that Ms. McKenzie was hospitalized, her partner contacted the defendant to let the defendant know that she was in the hospital (id. ¶ 9). He also informed the defendant of why Ms. McKenzie was in the hospital (id.). In doing so, it was Ms. McKenzie's partner's intention to let the defendant know that Ms. McKenzie would need time away from work and to see if the defendant needed Ms. McKenzie's keys to the restaurant during that time (id.).
The plaintiff submits that thereafter, and while Ms. McKenzie remained hospitalized, the defendant notified Ms. McKenzie that the defendant had cancelled her health insurance without cause (doc. 24 ¶ 10). Ms. McKenzie's health insurance premiums had already been paid for that month, in part by the defendant and in part by Ms. McKenzie, and she needed her health insurance to cover the costs of her hospitalization (id.). Given these circumstances, Ms. McKenzie responded to the defendant and objected to the cancellation of her health insurance (id.).
The plaintiff contends that Ms. McKenzie was released from the hospital on April 6, 2022, and she contacted the defendant on the same day to advise that she had been released and would return to work on the following Monday (doc. 24 ¶ 11). The defendant responded and asked Ms. McKenzie to come to the restaurant the following day (id.). When Ms. McKenzie reported to the restaurant on April 7, 2022, the defendant advised her that her employment had been terminated (id.). Ms. McKenzie had not received any prior warnings, disciplinary actions, reprimands, or notice of performance issues (id. ¶¶ 11-12). When Ms. McKenzie asked why her employment had been terminated, the defendant refused to provide a reason (id. ¶ 11).
The plaintiff alleges that following Ms. McKenzie's employment termination, Ms. McKenzie learned that her position had already been filled by a much younger and less experienced female (doc. 24 ¶ 13). Ms. McKenzie also learned that one of the defendant's owners had specifically expressed that he wanted to hire someone who was young and that customers would find attractive (id.). Additionally, the defendant's owners and members of management shared private details relating to Ms. McKenzie's health issues and hospitalization with various individuals, including other employees and customers of the restaurant (id.). Further, the owners and management made various false comments about Ms. McKenzie, both personally and professionally, to other employees and customers (id.).
The plaintiff submits that Ms. McKenzie subsequently filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”), and Ms. McKenzie received a notice of right to sue letter from the EEOC on September 14, 2023 (doc. 24 ¶ 14). On April 4, 2023, Ms. McKenzie filed a complaint against the defendant in the Greenville County Court of Common Pleas, alleging claims for wrongful termination, interference with rights in violation of the Family and Medical Leave Act (“FMLA”), retaliation in violation of the FMLA, defamation, invasion of privacy, intentional infliction of emotional distress, violation of South Carolina Code Annotated § 1-13-80, and breach of contract (doc. 1-1). The defendant removed the case based on federal question jurisdiction on June 15, 2023 (doc. 1), and filed a partial motion to dismiss for failure to state a claim on June 22, 2023 (doc. 7).
On July 7, 2023, Ms. McKenzie took her own life (doc. 24 ¶ 15). On July 12, 2023, the undersigned issued an order granting the parties' consent motion to stay the case (doc. 12). Ms. McKenzie's counsel filed a motion to substitute party on October 5, 2023, requesting that Allyson C. Bergin (“Ms. Bergin” or “plaintiff”), as the personal representative and on behalf of the estate of Ms. McKenzie, be substituted as the plaintiff in this matter (doc. 17). The undersigned granted the motion to substitute on October 10, 2023 (doc. 19). On October 16, 2023, the undersigned issued an order granting the plaintiff's consent motion to amend the complaint (doc. 22). In this order, the undersigned noted that upon the filing of an amended complaint, the defendant's partial motion to dismiss, which was directed to the original complaint, would be rendered moot (id.).
The plaintiff filed an amended complaint against the defendant on October 17, 2023, alleging claims for wrongful termination, interference with rights in violation of the FMLA, retaliation in violation of the FMLA, defamation, invasion of privacy, intentional infliction of emotional distress, violation of South Carolina Code Annotated § 1-13-80, breach of contract, disability discrimination in violation of the Americans with Disabilities Act (“ADA”), retaliation in violation of the ADA, and discrimination in violation of the Age Discrimination in Employment Act (“ADEA”) (doc. 24). The defendant filed a partial motion to dismiss on November 1,2023, arguing that the plaintiff's claims for wrongful termination, defamation, invasion of privacy, intentional infliction of emotional distress, and breach of contract should be dismissed (doc. 26). The plaintiff filed a response in opposition on December 6, 2023 (doc. 29). Accordingly, this matter is now ripe for review.
APPLICABLE LAW AND ANALYSIS
Standard of Review
“'The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint.'” Williams v. Preiss-Wal Pat III, LLC, 17 F.Supp.3d 528, 531 (D.S.C. 2014) (quoting Edwards v. City of Goldsboro, 178 F.3d 231,243 (4th Cir. 1999)). Rule 8(a) sets forth a liberal pleading standard, which requires only a "‘short and plain statement of the claim showing the pleader is entitled to relief,' in order to ‘give the defendant fair notice of what . . . the claim is and the grounds upon which it rests.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41,47 (1957)). “In assessing the sufficiency of a complaint, [the court] assume[s] as true all its well-pleaded facts and draw[s] all reasonable inferences in favor of the plaintiff.” Nanni v. Aberdeen Marketplace, Inc., 878 F.3d 447, 452 (4th Cir. 2017) (citing Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 253 (4th Cir. 2009)). “[T]he facts alleged ‘must be enough to raise a right to relief above the speculative level' and must provide ‘enough facts to state a claim to relief that is plausible on its face.'" Robinson v. American Honda Motor Co., Inc., 551 F.3d 218, 222 (4th Cir. 2009) (quoting Twombly, 550 U.S. at 555, 570). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted).
“In deciding whether a complaint will survive a motion to dismiss, a court evaluates the complaint in its entirety, as well as documents attached or incorporated into the complaint.” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 448 (4th Cir. 2011). The court may consider such a document, even if it is not attached to the complaint, if the document “'was integral to and explicitly relied on in the complaint'” and there is no authenticity challenge. Id. (quoting Phillips v. LCI Int'l, Inc., 190 F.3d 609, 618 (4th Cir. 1999)). See also Int'l Assn of Machinists & Aerospace Workers v. Haley, 832 F.Supp.2d 612, 622 (D.S.C. 2011) (“In evaluating a motion to dismiss under Rule 12(b)(6), the Court . . . may also ‘consider documents attached to . . . the motion to dismiss, so long as they are integral to the complaint and authentic.'”) (quoting Sec'y of State for Def. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007))). Rule 12(d) states: “If on a motion under Rule 12(b)(6) . . ., matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all the material that is pertinent to the motion.” Fed.R.Civ.P. 12(d).
Wrongful Termination
In her wrongful termination claim, the plaintiff alleges that South Carolina public policy provides that (1) employees should be allowed to pursue medical treatment when having health issues without the fear of retaliation from their employers, (2) employees should remain insured under employer-sponsored health insurance policies for which employees have paid all applicable premiums, and (3) employees should be able to object to unfair and/or unlawful employment practices without experiencing retaliation from their employers (doc. 24 ¶ 17). The plaintiff contends that Ms. McKenzie acted in accordance with this public policy by seeking medical treatment and objecting to the defendant's termination of her insurance while she was hospitalized (id. ¶ 18). Moreover, the plaintiff alleges that the defendants terminated Ms. McKenzie's employment in retaliation for her above-referenced actions (id. ¶ 20).
The defendant argues that the plaintiff's wrongful termination claim should be dismissed because she has not alleged a violation of a recognized public policy in South Carolina (doc. 26-1 at 3-6). “South Carolina has a strong policy favoring at-will employment,” Taghivand v. Rite Aid Corp., 768 S.E 2d 385, 386 (S.C. 2015), and “[a]n at-will employee may be terminated at any time for any reason or for no reason, with or without cause.” Barron v. Labor Finders of S.C., 713 S.E.2d 634, 636 (S.C. 2011) (citation omitted). However, there is an exception to the at-will employment doctrine that provides that “an at-will employee has a cause of action in tort for wrongful termination where there is a retaliatory termination of the at-will employee in violation of a clear mandate of public policy.” Id. at 637 (citation and internal quotation marks omitted). “The public policy exception clearly applies in cases where either: (1) the employer requires the employee to violate the law, or (2) the reason for the employee's termination itself is a violation of criminal law.” Id. (citations omitted). “Although [the Supreme Court of South Carolina] has made clear the exception is not limited to these situations, it has not explicitly recognized any others.” Owens v. Crabtree, 823 S.E.2d 224, 228 (S.C. 2019) (citation and internal quotation marks omitted). “‘The primary source of the declaration of public policy of the state is the General Assembly; the courts assume this prerogative only in the absence of legislative declaration.'” Barron, 713 S.E.2d at 617 (quoting Citizens' Bank v. Heyward, 133 S.E. 709, 713 (1925)).
The plaintiff does not claim that the defendant required Ms. McKenzie to violate the law or that the reason for terminating Ms. McKenzie's employment was a violation of criminal law (see doc. 29 at 6-8). Rather, the plaintiff alleges that public policy generally provides for the rights that she set forth above (id.; doc. 24). However, the undersigned agrees with the defendant that because the plaintiff has failed to identify a clear mandate of public policy supporting these rights, the plaintiff has failed to state a claim for wrongful termination in violation of South Carolina public policy that is plausible on its face. Accordingly, the undersigned recommends that the district court grant the defendant's motion to dismiss the plaintiff's wrongful termination claim.
Defamation
In her defamation claim, the plaintiff alleges that the defendant, acting through its owners and members of management, made knowingly negative and false statements regarding Ms. McKenzie, her performance, her conduct, her character, and the circumstances surrounding the termination of her employment to various third parties, including employees and customers at the restaurant (doc. 24 ¶ 32). The plaintiff further alleges that these comments were published to said individuals on various occasions following Ms. McKenzie's employment termination (id.). Moreover, the plaintiff submits that the defendant intentionally made these statements with knowledge of the statements' falsity (id. ¶ 33). The plaintiff alleges that as a direct and proximate result of these comments, Ms. McKenzie suffered damages to her reputation, was unable to find another job with the same salary and benefits that she had with the defendant, and experienced emotional pain and suffering that ultimately resulted in Ms. McKenzie taking her own life (id. ¶ 34). The defendant, however, argues that the plaintiff fails to state a plausible defamation claim because she does not allege any specific defamatory statement that was made at any specific time or place and to any specific listener (doc. 26-1 at 8-10).
“The tort of defamation permits a plaintiff to recover for injury to her reputation as the result of the defendant's communication to others of a false message about the plaintiff.” McBride v. Sch. Dist. of Greenville Cnty., 698 S.E.2d 845, 852 (S.C. Ct. App. 2010). The elements of defamation include “(1) a false and defamatory statement concerning another; (2) an unprivileged publication to a third party; (3) fault on the part of the publisher; and (4) either actionability of the statement irrespective of special harm or the existence of special harm caused by the publication.” McNeil v. S.C. Dep't of Corr., 743 S.E.2d 843, 848 (S.C. Ct. App. 2013) (citation omitted). “[I]n order to plead defamation, a plaintiff should allege specific defamatory comments [including] ‘the time, place, content, speaker, and listener of the alleged defamatory matter.'” English Boiler & Tube, Inc. v. W.C. Rouse & Son, Inc., C/A No. 97-2397, 1999 WL 89125, at *3 (4th Cir. 1999) (quoting Caudle v. Thomason, 942 F.Supp. 635, 638 (D.D.C. 1996)). A defendant “cannot be expected to defend against an allegation that [he] defamed [a p]laintiff by making a statement heard by unknown persons at an unknown place at an unknown time.” Colleton v. Charleston Water Sys., 225 F.Supp.3d 362, 369-70 (D.S.C. 2016).
The undersigned finds that the plaintiff has failed to adequately plead a claim for defamation. Although the plaintiff sets forth general allegations that the defendant's owners and members of management made false statements about Ms. McKenzie after Ms. McKenzie's employment was terminated to customers and other employees at the restaurant, the undersigned finds that she has failed to set forth allegations with sufficient specificity to survive the defendant's motion to dismiss. The plaintiff does not allege exactly who made the defamatory comments, when the comments were made, and to whom the comments were made. Significantly, the plaintiff also does not plead what the defamatory statements were. Put simply, the plaintiff fails to set forth a "‘short and plain statement of the claim showing the pleader is entitled to relief, 'in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'" Twombly, 550 U.S. at 555 (quoting Conley, 355 U.S. at 47); see also Iqbal, 556 U.S. at 678 (“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face”) (citation and internal quotation marks omitted). Based on the foregoing, the undersigned recommends that the district court grant the defendant's motion to dismiss the plaintiff's defamation claim. See Ortiz v. Jackson, C/A No. 2:23-cv-01741-DCN, 2023 WL 5208007, at *3 (D.S.C. Aug. 14, 2023) (dismissing a defamation counterclaim when “the counterclaim fail[ed] to provide enough context for Ortiz to know what specific statements she is alleged to have made”); Dixon v. Boeing Co., C/A No. 2:20-01356-BHH-MGB, 2020 WL 9211161, at *6 (D.S.C. May 11, 2020) (“Plaintiff conclusively asserts that Defendant made defamatory comments and then argues that Defendant continued the publication of the false narrative ... by publishing internal and external memorandums, without describing where or how these memorandums were distributed. . . . A pleading that merely offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do.” (internal citations and quotation marks omitted)), R&R adopted by 2021 WL 837479 (D.S.C. Mar. 5, 2021); Campbell v. Int' Paper Co., C/A No. 3:12-30420JFA, 2013 WL 1874850, at *8 (D.S.C. May 3, 2013) (dismissing a defamation claim that was inadequately pled because it lacked details about when, where, and to whom the defamatory statements were published).
However, the plaintiff has requested leave to amend her amended complaint to provide more detailed factual allegations (doc. 29 at 11), and the defendant has not objected to this request. Courts within the District of South Carolina frequently grant such requests under similar circumstances. See, e.g., Doe v. Cannon, C/A No. 2:16-cv-00530-RMG, 2017 WL 591121, at *1 (D.S.C. Feb. 14, 2017); Colleton, 225 F.Supp.3d at 370; Campbell, 2013 WL 1874850, at *8; see also Fed.R.Civ.P. 15(a) (“The court should freely give leave [to amend] when justice so requires.”); Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006) (noting that Rule 15(a) gives effect to the federal policy in favor of resolving cases on their merits instead of disposing of them on technicalities). As a result, the undersigned recommends that the district court dismiss the plaintiff's defamation claim in the amended complaint but grant the plaintiff leave to file a second amended complaint if she wishes to cure the deficiencies in her defamation claim.
The plaintiff requested leave to amend her amended complaint before the scheduling order's deadline to amend pleadings, so the standard set forth in Federal Rule of Civil Procedure 15 applies (see docs. 29; 30).
Invasion of Privacy
The right of privacy is “‘the right to be let alone; the right of a person to be free from unwarranted publicity.'” Swinton Creek Nursery v. Edisto Farm Credit, ACA, 514 S.E.2d 126, 130 (1999) (quoting Holloman v. Life Ins. Co. of Va., 7 S.E.2d 169, 171 (1940)). In South Carolina, there are three distinct causes of action for invasion of privacy:
“[1] The unwarranted appropriation or exploitation of one's personality, [2] the publicizing of one's private affairs with which the public has no legitimate concern, or [3] the wrongful intrusion into one's private activities, in such manner as to outrage or cause mental suffering, shame, or humiliation to a person of ordinary sensibilities.”Swinton, 514 S.E.2d at 130 (quoting Meetze v. Associated Press, 95 S.E.2d 606, 608 (1956)). The plaintiff acknowledges that her claim falls under the second cause of action (doc. 29 at 12). The elements of this tort include (1) publicizing, (2) absent any waiver or privilege, (3) private matters in which the public has no legitimate concern, (4) so as to bring shame or humiliation to a person of ordinary sensibilities. Swinton, 514 S.E.2d at 131 (citations omitted). Publicity “means that the matter is made public, by communicating it to the public at large, or to so many persons that the matter must be regarded as substantially certain to become one of public knowledge.” Id.
In her amended complaint, the plaintiff alleges that the defendant, through its owners and members of management, was provided with private and confidential information regarding Ms. McKenzie's health and medical treatment, including the highly sensitive fact that she had attempted to take her own life (doc. 24 ¶ 37). This information was shared with the defendant solely insofar as it affected Ms. McKenzie's need for leave from work to seek appropriate medical treatment (id.). The plaintiff alleges that the defendant owed Ms. McKenzie a duty of privacy to not improperly share such information with any third party without Ms. McKenzie's consent (id.). The plaintiff pleads that the defendant knew or should have known that Ms. McKenzie desired her private information to remain private and that there was no legitimate and/or compelling public interest in the disclosure of any such information (id. ¶ 38). Nevertheless, the defendant, acting through its owners and members of management, publicized Ms. McKenzie's private affairs and health information, including details and information about her suicide attempt and inpatient hospitalization, in a manner so outrageous as would be highly offensive to a reasonable person (id. ¶ 39). The plaintiff contends that the defendant, through its owners and members of management, “verbally published such highly private and confidential information to other employees and with customers at the [r]estaurant on various dates at various times” (id.).
Similar to the plaintiff's defamation claim, the defendant argues that the plaintiff's invasion of privacy claim should be dismissed because the plaintiff fails to allege who actually publicized any private matter, what was said, and who heard the private information (doc. 26-1 at 10). Rather, the plaintiff makes bald allegations that the defendant, through unknown agents, publicized unknown statements to unknown persons (id.). The undersigned agrees that the plaintiff's allegations do not satisfy the Twombly/Iqbal pleading standard requiring a complaint to “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.' ” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). Without more specificity regarding who made the statements, what was said, and who heard the private information, the defendant has not been provided with fair notice of this claim. See Twombly, 550 U.S. at 555. Accordingly, the undersigned recommends that the district court grant the defendant's motion to dismiss the plaintiff's invasion of privacy claim. See, e.g., Isioye v. Coastal Carolina Univ., C/A No. 4:17-cv-3484-RBH-TER, 2018 WL 6682795, at *5 (D.S.C. Nov. 30, 2018) (finding that a plaintiff's allegations that the defendants invaded his privacy were “legal conclusions rather than factual assertions and [were] insufficient to give rise to a claim for invasion of privacy”), R&R adopted by 2018 WL 6676296 (D.S.C. Dec. 19, 2018). However, the plaintiff also requests leave to amend her amended complaint to provide more specificity to this claim. As with her defamation claim, the undersigned recommends that the district court grant this request.
Intentional Infliction of Emotional Distress
The defendant argues that the plaintiff's intentional infliction of emotional distress claim should be dismissed because it is barred by the South Carolina Workers' Compensation Act (“SCWCA”) (doc. 26-1 at 11-13). The SCWCA contains an exclusivity provision, which states as follows:
The rights and remedies granted by this title to an employee when he and his employer have accepted the provisions of this title, respectively, to pay and accept compensation on account of personal injury or death by accident, shall exclude all other rights and remedies of such employee, his personal representative, parents, dependents or next of kin as against his employer, at common law or otherwise, on account of such injury, loss of service or death. . . .S.C. Code Ann. § 42-1-540. Based on this provision, South Carolina courts hold that the SCWCA provides the exclusive remedy against an employer for an employee who sustains injuries arising out of his or her employment. Sabb v. S.C. State Univ., 567 S.E.2d 231,234 (S.C. 2002). The only exceptions to the exclusivity provision are: (1) when the injury results from the act of a subcontractor who is not the injured person's direct employer; (2) when the injury is not accidental but rather results from the intentional act of the employer or its alter ego; (3) when the tort is slander and the injury is to reputation; or (4) when involving certain occupations expressly excluded by the SCWCA. Cason v. Duke Energy Corp., 560 S.E.2d 891, 893 n.2 (S.C. 2002).
In her amended complaint, the plaintiff alleges that the defendant acted intentionally and/or recklessly in various respects, both during and following the termination of Ms. McKenzie's employment (doc. 24 ¶ 42). The plaintiff alleges that during Ms. McKenzie's employment, the defendant contacted Ms. McKenzie while she was in the hospital and notified her that her health insurance, for which she had already paid premiums, had been cancelled without notice (id. ¶ 10). Following Ms. McKenzie's employment termination, the plaintiff alleges that the defendant, through its owners and other members of management, repeatedly and publicly shared private, confidential, and highly embarrassing details of Ms. McKenzie's health issues, including her suicide attempt and hospitalization, with other employees and customers at the restaurant (id. ¶ 42). The plaintiff submits that these owners and members of management did so intentionally, knowing that such individuals had no need for said information and knowing that sharing such information would be highly embarrassing and damaging to Ms. McKenzie at a time when she was suffering from mental health issues and needed employment and health insurance (id.). The plaintiff alleges that this conduct was so extreme and outrageous as to exceed all possible bounds of decency and that the defendant knew or should have known that severe emotional distress would result from its conduct (id. ¶ 43). The plaintiff contends that the defendant's conduct added to Ms. McKenzie's existing issues and ultimately resulted in her taking her own life (id. ¶ 44).
The undersigned finds that the plaintiff's intentional infliction of emotional distress claim for Ms. McKenzie's injuries occurring after her employment termination are not barred by the exclusivity provision of the SCWCA. “Coverage under the Workers' Compensation Act depends on the existence of an employment relationship.” Edens v. Bellini, 597 S.E.2d 863, 866 (S.C. Ct. App. 2004) (citing McDowell v. Stilley Plywood Co., 41 S.E.2d 872 (S.C. 1947); Gray v. Club Group, Ltd., 528 S.E.2d 435, 441 (S.C. Ct. App. 2000) (“Before provisions of the Workers' Compensation Act can apply, an employer-employee relationship must exist; this is an initial fact to be established.”)). Significantly, “Workers' Compensation awards are authorized only if an employer-employee relationship exists at the time of the injury.” Edens, 597 S.E.2d at 866 (citing Dawkins v. Jordan, 534 S.E.2d 700 (2000)) (emphasis added). Because the plaintiff pleads allegations regarding the defendant's actions - and Ms. McKenzie's injuries from those actions - subsequent to Ms. McKenzie's employment termination, the undersigned recommends that the district court deny the defendant's motion to dismiss this claim on exclusivity grounds. See, e.g., Young v. Roper St. Francis Healthcare, C/A No. 2:12-2337-RMG-BM, 2012 WL 6186197, at *8 (D.S.C. Nov. 9, 2012) (finding that a plaintiff's claim regarding a defendant's actions that occurred after the plaintiff's employment had been terminated was not barred by the exclusivity provision of the SCWCA), R&R adopted by 2012 WL 6193888 (D.S.C. Dec. 12, 2012); Thompson v. Univ. of S.C., 3:04-219-CMC-BM, 2006 WL 2583595, at *16 (D.S.C. Sept. 5, 2006) (finding that there was a question of fact regarding whether a plaintiff's claim involved injuries occurring after the plaintiff's employment ended and was therefore excluded from coverage under the SCWCA).
As discussed above, the plaintiff also alleges that the defendant acted intentionally and/or recklessly during Ms. McKenzie's employment by contacting Ms. McKenzie while she was in the hospital for her suicide attempt and notifying her that her health insurance, for which she had already paid the premiums, had been cancelled without cause (doc. 24 ¶¶ 10, 42). The undersigned also finds that dismissal of this claim pursuant to the exclusivity provision of the SCWCA is not warranted at this time. The Supreme Court of South Carolina has held that claims for intentional infliction of emotional distress arising out of a plaintiff's employment can be subject to the SCWCA. See Dickert v. Metropolitan Life Ins. Co., 428 S.E.2d 700, 701 (S.C. 1993); see, e.g., Menefee v. Westinghouse Savannah River Co., C/A No. 96-1439, 1996 WL 694430, at *1 (4th Cir. Dec. 5, 1996) (finding that a plaintiff's intentional infliction of emotional distress claim was barred by the exclusivity provision of the SCWCA). However, as set out above, an exception exists to the exclusivity provision “when the injury is not accidental but rather results from the intentional act of the employer or its alter ego.” Cason, 560 S.E.2d at 893 n.2; see Bryant v. INA Bearing Co., Inc., C/A No. 93-1663, 1993 WL 540274, at *1 (4th Cir. Dec. 22, 1993) (“South Carolina case law is clear that only when the tortfeasor/co-employee is the 'alter ego' of the employer may liability be had outside the ambit of the Act. Otherwise, an employee's action against a company for the intentional infliction of emotional distress by a co-worker is within the scope of the Act. ”) (citations omitted). Only “dominant corporate owners and officers” may constitute alter egos; the term does not encompass “supervisory employees.” Dickert, 428 S.E.2d at 701. Here, the plaintiff alleges that the defendant's “owners and other members of management” engaged in the conduct at issue. The undersigned finds that this allegation is sufficient to survive the defendant's motion to dismiss and that further factual development is warranted regarding the status of these “owners and other members of management” before concluding whether this claim is barred by the SCWCA. See Wilson v. Enter. Bank of S.C., C/A No. 2:17-cv-1559-PMD-JDA, 2018 WL 1081502, at *3 (D.S.C. Feb. 28, 2018) (“Plaintiff need not prove that particular individuals are “dominant owners or officers” in order to survive a motion to dismiss.”); e.g., Anderson v. Fed. Express Corp., C. A. No. 4:09-3039-TLW-SVH, 2010 WL 3609103, at *2 (D.S.C. May 12, 2010) (finding that further factual development was necessary to allow the court to determine which members of the defendant corporation engaged in the conduct at issue), R&R adopted by 2010 WL 3609049 (D.S.C. Sept. 9, 2010).
The defendant further argues that the plaintiff has failed to allege a plausible claim of intentional infliction of emotional distress (doc. 26-1 at 13-19). To recover for intentional infliction of emotional distress, a plaintiff must show as follows:
(1) the defendant intentionally or recklessly inflicted severe emotional distress, or was certain or substantially certain such distress would result from his conduct; (2) the conduct was so extreme and outrageous as to exceed all possible bounds of decency and must be regarded as atrocious and utterly intolerable in a civilized community; (3) the actions of defendant caused the plaintiff's emotional distress; and (4) the emotional distress suffered by the plaintiff was so severe that no reasonable person could be expected to endure it.Williams v. Lancaster Cnty. Sch. Dist., 631 S.E.2d 286, 305 (S.C. Ct. App. 2006) (citation omitted). “[T]he court plays a significant gatekeeping role to prevent claims for intentional infliction of emotional distress from becoming a panacea for wounded feelings rather than reprehensible conduct[.]” Wall v. Enter. Leasing Co. - Se., LLC, C/A No. 3:18-1225-TLW-SVH, 2019 WL 4935631, at *2 (D.S.C. Jan. 30, 2019) (citation and internal quotation marks omitted), R&R adopted by 2019 WL 4931316 (D.S.C. Oct. 4, 2019); see Nolan v. U.S. Bank Nat'Assn, C/A No. 2:23-cv-1443-RMG, 2024 WL 621082, at *1 (D.S.C. Feb. 14, 2024) (noting that there exists a “high standard for stating an intentional infliction of emotional distress claim under South Carolina law”).
The defendant contends that the plaintiff has failed to plead sufficient facts supporting the second and fourth elements (doc. 26-1 at 14). In her amended complaint, the plaintiff alleges that the defendant, after learning that Ms. McKenzie was in the hospital due to a suicide attempt, called Ms. McKenzie in the hospital and notified her that her health insurance, which had already been paid for, was being cancelled without cause; the defendant terminated Ms. McKenzie's employment; the defendant repeatedly and publicly shared Ms. McKenzie's private health information regarding her suicide attempt and hospitalization with employees and customers at a time when Ms. McKenzie was looking for work and needed health insurance; and Ms. McKenzie subsequently suffered severe emotional distress and took her own life (doc. 24 ¶¶ 10, 42-44). Accepting these allegations as true, the undersigned finds that the plaintiff sufficiently pleads the second and fourth elements of an intentional infliction of emotional distress claim - that the conduct was so extreme and outrageous as to exceed all possible bounds of decency and that the emotional distress suffered by that employee was so severe that no reasonable person could be expected to endure it. Based on the foregoing, the undersigned recommends that the district court deny the defendant's motion to dismiss the plaintiff's intentional infliction of emotional distress claim.
The defendant argues that the Supreme Court of South Carolina applies a heightened burden of proof for the second and fourth elements of an intentional infliction of emotional distress claim (doc. 26-1 at 14) (citing Hansson v. Scalise Builders of S.C., 650 S.E.2d 68, 71 (S.C. 2007)). However, this heightened burden of proof does not apply at the motion to dismiss stage. See Doe v. Oconee Mem' Hosp., 878 S.E.2d 920, 926 (S.C. Ct. App. 2022).
Breach of Contract
In her breach of contract claim, the plaintiff alleges that the defendant had an employee handbook, which constituted a binding contract between the defendant and Ms. McKenzie (doc. 24 ¶ 52). The plaintiff further alleges that the defendant breached this contract because the handbook contained a progressive disciplinary policy, but the defendant failed to provide Ms. McKenzie with the requisite reprimands, warnings, and/or other opportunities for improvement prior to terminating her employment (id. ¶¶ 52-53). The defendant, however, argues that the plaintiff's breach of contract claim should be dismissed because the handbook does not constitute a contract based on the handbook's disclaimer and non-mandatory language (doc. 26-1 at 20-23).
Under South Carolina law, an employee handbook forms a contract when: (1) the handbook provisions and procedures in question apply to the employee; (2) the handbook sets out procedures binding on the employer; and (3) the handbook does not contain a conspicuous and appropriate disclaimer. Grant v. Mount Vernon Mills, Inc., 634 S.E.2d 15, 20 (S.C. Ct. App. 2006). Regarding the disclaimer, South Carolina Code Annotated § 41-1-110 provides as follows:
It is the public policy of this State that a handbook, personnel manual, policy, procedure, or other document issued by an employer or its agent after June 30, 2004, shall not create an express or implied contract of employment if it is conspicuously disclaimed. For purposes of this section, a disclaimer in a handbook or personnel manual must be in underlined capital letters on the first page of the document and signed by the employee. For all other documents referenced in this section, the disclaimer must be in underlined capital letters on the first page of the document. Whether or not a disclaimer is conspicuous is a question of law.S.C. Code Ann. § 41-1-110.
The defendant has attached a copy of its employee handbook to its motion to dismiss (docs. 26-1 at 21; 26-2). Neither party disputes that this handbook was applicable to Ms. McKenzie. The undersigned has considered this handbook herein without converting the defendant's motion to dismiss into a motion for summary judgment, as the handbook is integral to and explicitly relied on in the amended complaint and the plaintiff has not challenged the handbook's authenticity (docs. 24 ¶¶ 7, 52-54; 29 at 20-23). See Zak v. Chelsea Therapeutics Intern., Ltd., 780 F.3d 597, 606-07 (4th Cir. 2015) (“[C]onsideration of a document attached to a motion to dismiss ordinarily is permitted only when the document is integral to and explicitly relied on in the complaint, and the plaintiffs do not challenge the document's authenticity.”) (citation and internal quotation marks omitted).
The first page of the defendant's handbook is a cover page, and it does not contain a disclaimer (see doc. 26-2 at 2). However, the following page, which is labeled as page 1, contains the following disclaimer:
DISCLAIMER
This is for informational purposes only and it is not intended to create, and it does not create a contract of employment, express, implied, unilateral, or otherwise, between you and the company.
The contents of this are presented as guidelines of some of the current policies and procedures of 4 Aces Kitchen and Cocktails, LLC. The term "company" as used herein refers
to the particular restaurant by which you are employed. The policies and procedures set forth in this supersede and replace all prior policies and procedures, written and oral, and, in particular, any prior. Any prior handbook is hereby withdrawn and rescinded. From time to time, it will be necessary, with or without notice, for the company to change, delete or add to the provisions of this.
Nothing in this handbook binds the company to any specific procedures, policies, working conditions, privileges of employment or definite period of employment. As an employee, you are completely free to leave the company at any time you choose, and the company has the same right to end the employment relationship all employees are employees-at-will. In other words, your employment may be terminated at any time, without notice or without specific reasons, at the option of 4 Aces Kitchen and Cocktails or you. Neither this handbook, nor any oral or written policy or procedure, nor any representation by any company employee, supervisor, or officer can or will change the at-will nature of your employment.(Id. at 3). This page also contains a signature line for the employee receiving the handbook (id.).
The undersigned finds that the defendant's handbook contains a conspicuous disclaimer that satisfies the requirements of South Carolina Code Annotated § 41-1-110. The disclaimer is in underlined and capital letters, and it contains a signature line for the employee receiving the handbook. Moreover, the disclaimer is on the page labeled as page one and is on the first substantive page of the document following the cover page (doc. 26-2 at 3). Other courts have recognized that the first substantive page after a cover page can satisfy South Carolina's statutory requirements for a conspicuous disclaimer. See, e.g., Daniels v. Harsco Corp., C/A No. 3:22-cv-2752-JFA-KDW, 2023 WL 2815337, at *9 n.8 (D.S.C. Feb. 9, 2023) (“The undersigned . . . agrees that the ‘first page' statutory requirement may at times be satisfied by having a compliant conspicuous disclaimer on the ‘first page after the cover page' of the handbook.”), R&R adopted by 2023 WL 2569438 (D.S.C. Mar. 20, 2023); Bishop v. City of Columbia, 738 S.E.2d 255, 260 (S.C. Ct. App. 2013) (finding an employee handbook was not a contract when there was a conspicuous disclaimer on the first page after the cover page).
Further, the disciplinary policy at issue does not set out procedures in mandatory language that are binding on the defendant. “To be considered mandatory language, the purported contract must be definitive in nature, promising specific treatment in specific situations.” Daniels, 2023 WL 2815337, at *10 (citation and internal quotation marks omitted). “It must not be couched in permissive language such as ‘normally' and ‘should.'” Id. (citation and internal quotation marks omitted). “[A p]laintiff must direct the court to some particular provision he claims was violated that limited the employer's right to discharge him and the handbook promise must restrict the right of an employer to discharge.” Id. (citation and internal quotation marks omitted).
Here, the disciplinary policy at issue provides, in relevant part, as follows:
GUIDELINES FOR DISCIPLINE AND DISCHARGE
All discipline will be handled on a case-by-case basis. These guidelines are in no way intended to create a contract, express, implied, unilateral, or otherwise, between the company and any employee.
Please note that the company makes no promises or representations regarding these guidelines. The company reserves the right to initiate disciplinary action at any level, at any time, in its discretion. Disciplinary action, therefore, may include immediate discharge for any offense. ...
You should understand all employees are employees-at-will.
In other words, your employment may be terminated at any time, without notice or without specific reasons, at the option of 4 Aces Kitchen and Cocktails or you. . . .
For some violations of 4 Aces Kitchen and Cocktails' policies your manager may, in his or her sole discretion, decide to give you an opportunity to correct your behavior. . . .
YOU MAY, ON THE OTHER HAND, BE TERMINATED WITHOUT NOTICE AND REGARDLESS OF YOUR LENGTH OF SERVICE. ...
THE COMPANY, IN ITS SOLE DISCRETION, WILL DETERMINE THE FORM OF DISCIPLINE, UP TO AND INCLUDING IMMEDIATE DISCHARGE, THAT ANY EMPLOYEE WILL RECEIVE FOR ANY OFFENSE.(Doc. 26-2 at 15-17). Based on this language and the presence of a conspicuous disclaimer, the undersigned finds that the plaintiff fails to sufficiently plead that the employee handbook constituted a contract between the defendant and Ms. McKenzie. Therefore, the undersigned recommends that the district court grant the defendant's motion to dismiss the plaintiff's breach of contract claim.
CONCLUSION AND RECOMMENDATION
Wherefore, based on the foregoing, the undersigned recommends that the district court grant the defendant's partial motion to dismiss (doc. 26) as to the plaintiff's claims for wrongful termination, defamation, invasion of privacy, and breach of contract and deny the defendant's partial motion to dismiss as to the plaintiff's claim for intentional infliction of emotional distress. The undersigned further recommends that the district court grant the plaintiff leave to file a second amended complaint solely to cure the deficiencies in her defamation and invasion of privacy claims.
IT IS SO RECOMMENDED.
The attention of the parties is directed to the important notice on the next page.
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. “[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Fed.R.Civ.P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk United States District Court 250 East North Street, Suite 2300 Greenville, South Carolina 29601
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).