CAMERON McGOWAN CURRIE, District Judge.
Through this action, Plaintiff Jessica E. Sellers ("Sellers") seeks recovery for alleged wrongful actions relating to her employment with Defendant South Carolina Autism Society, Inc., ("Employer"). Sellers alleges, inter alia, that she was treated less favorably than Caucasian employees because of her race (African American) and because she complained about racial discrimination directed to her and other African American employees. Sellers asserts the following seven causes of action: (1) violation of 42 U.S.C. § 1981; (2) intentional infliction of emotional distress ("outrage"); (3) breach of contract; (4) retaliatory discharge in violation of public policy; (5) defamation (relating to post-employment comments); (6) tortious interference with contract/prospective advantage; and (7) negligence. These causes of action are asserted against three Defendants: Employer; Seller's former supervisor, Kim
The matter is before the court on Defendants' motion to dismiss all claims. In accordance with 28 U.S.C. § 636(b) and Local Civil Rule 73.02(B)(2)(e), (g), DSC, this matter was referred to United States Magistrate Joseph R. McCrorey for pretrial proceedings and a Report and Recommendation ("Report"). Through a Report issued February 22, 2012, 2012 WL 1015807, the Magistrate Judge recommends that the court grant Defendants' motion in full, dismissing all claims. In the alternative, the Report recommends dismissal of the sole federal claim and remand of the state law claims to state court.
Defendants filed a response on February 23, 2012, agreeing with the Report's recommendation that the motion to dismiss be granted in full but opposing the alternative recommendation that the state law claims be remanded without ruling. Defendants argue that remand of the state law claims would be inefficient and prejudicial as Defendants "would have to rebrief, re-argue, and redefend against the same meritless claims in yet another forum." Dkt. No. 11 at 2.
Sellers filed an objection to the Report on March 13, 2012. Dkt. No. 14. Sellers objects to the recommendations except as to the recommended dismissal of her claims for outrage and negligence. See Dkt. No. 14 at 16 (indicating no objection to the Report as to these two claims). As to her federal claim, Sellers argues that she had a sufficient contractual interest in her employment to support a claim under 42 U.S.C. § 1981 ("Section 1981"). As to her state law claims, Sellers argues the court should follow the Report's alternative recommendation and remand those to state court if her federal claim is dismissed.
By docket text order entered March 15, 2012, the court raised concerns regarding the recommendation on the Section 1981 claim and invited briefing. Dkt. No. 16. Both sides filed responsive memoranda. Dkt. Nos. 18, 20.
The Magistrate Judge makes only a recommendation to this court. The recommendation has no presumptive weight, and the responsibility to make a final determination remains with the court. See Mathews v. Weber, 423 U.S. 261, 96 S.Ct. 549, 46 L.Ed.2d 483 (1976). The court is charged with making a de novo determination of any portion of the Report of the Magistrate Judge to which a specific objection is made. The court may accept, reject, or modify, in whole or in part, the recommendation made by the Magistrate Judge or recommit the matter to the Magistrate Judge with instructions. See 28 U.S.C. § 636(b). In the absence of an objection, the court reviews the Report for clear error. See Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir.2005) (stating that "in 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") (citation omitted).
The Report addresses Sellers' federal claim for violation of 42 U.S.C. § 1981 together with her claim for breach of contract and recommends that both claims be dismissed because Sellers has not adequately pleaded the existence of an employment contract. Report at 5-7. As to the Section 1981 claim, this recommendation
Fourth Circuit Authority. The Fourth Circuit first addressed whether an at-will employment relationship was sufficient to support a claim under Section 1981 in Spriggs v. Diamond Auto Glass, 165 F.3d 1015 (4th Cir.1999). There the court addressed at-will employment under Maryland law and concluded that, although the employment relationship was terminable at will, the relationship was contractual and could, therefore, support a Section 1981 claim. Id. at 1018 ("Because the parties did not agree on a set duration for Spriggs's employment, Maryland law permitted either party to terminate the contract at will.... Nevertheless, the lack of an agreed-upon duration does not invalidate the underlying contract itself.... Therefore, Spriggs's employment relationship with Diamond, though terminable at will, was contractual.").
Although the court was specifically addressing at-will employment under Maryland law, its discussion suggested broader application. Id. ("Having concluded that an at-will employment relationship is contractual, we hold that such relationships may therefore serve as predicate contracts for § 1981 claims."). The court also noted that its decision placed the Fourth Circuit in agreement with the Fifth Circuit, the only other circuit which had then addressed the issue. Id. at 1018-19 (discussing Fadeyi v. Planned Parenthood Ass'n of Lubbock, Inc., 160 F.3d 1048, 1052 (5th Cir.1998), which held that, under Texas law, an at-will employee has a contractual relationship with her employer, and noted that "Congress could not have meant to exclude at-will workers from the reach of § 1981").
In an unpublished decision in 2000, the Fourth Circuit summarily reversed and remanded a decision from the District of South Carolina based on its holding in Spriggs. See Parks v. Lens Crafters, Inc., No. 99-1551, 2000 WL 1287911 (4th Cir. 2000). The underlying decision turned on application of the at-will doctrine under South Carolina law. See C.A. No. 1:97-cv-3 668-CMC, Dkt. No. 23 at 4-5 (Report and Recommendation); id., Dkt. No. 25 (order adopting Report and Recommendation).
Id. The brevity of this decision as well as its issuance as an unpublished opinion suggest that the Fourth Circuit considered the legal issue to have been resolved by Spriggs.
The Fourth Circuit discussed the topic in somewhat greater detail in a decision issued in 2003, applying the rule announced in Spriggs to claims brought by a North Carolina at-will employee. The court reached the same conclusion as in Spriggs, characterizing North Carolina's at-will employment doctrine as follows:
McLean v. Patten Communities, Inc., 332 F.3d 714, 719 (4th Cir.2003) (noting that the rights guaranteed under Section 1981(a) include those relating to "the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms and conditions of the contractual relationship.").
The Fourth Circuit's summary reversal in Parks (discussed supra), suggests a Fourth Circuit view that the issue has already been resolved. Even if it has not, this court would reach the same result as the court finds nothing so unique about South Carolina's employment at-will doctrine that it should be exempt from what appears to be the unanimous view of all federal appellate courts which have addressed application of Section 1981 to various states' at-will employment doctrines.
Defendants' reliance on Prescott is entirely misplaced as reflected in the first paragraph of the "Discussion" section of that decision:
Prescott, 516 S.E.2d at 925 (emphasis added). The Prescott court's reliance on the 1936 Shealy decision reflects not only South Carolina's long-standing acceptance of the doctrine of at-will employment but also its long-standing acknowledgment that the at-will employment relationship is inherently contractual. See also id. at 927 (summarizing a Sixth Circuit decision as holding that the specified events were "insufficient to constitute promise to alter at-will contract" (emphasis added)).
To the extent Prescott refers to any absence of proof of a contract, it is in the context of addressing the general unavailability of a breach of contract claim for termination of at-will employment or the absence of a contract modifying Prescott's at-will employment relationship. See Prescott, 516 S.E.2d at 925 ("termination of an at-will employee normally does not give rise to a cause of action for breach of contract"); id. ("Of course, an employer and employee may choose to contractually alter the general rule of employment atwill[.]"); id. at 926 ("In the employment context, we have already recognized that a contract altering the at-will arrangement may arise, in part, from the oral statement of the employer."); id. ("Prescott failed to establish that [his employer] made an offer to alter his at-will employment status."); id. at 927 ("Prescott failed to establish ... the existence of a contract which altered his status as an at-will employee."). Nothing in these references suggests that the at-will relationship is not, itself, contractual.
Sellers has alleged specific facts supporting the inferences that (1) she was an employee of Employer, (2) she was treated differently because of her race, and (3) she was terminated for complaining about racial discrimination. These allegations and inferences are sufficient to state a claim under Section 1981 even assuming Sellers is an at-will employee.
It is difficult for the court to adequately deal with Defendants' motion to dismiss Sellers' claim for breach of contract given the parties' failure to address this claim separately from the Section 1981 claim. The court has, therefore, independently reviewed Sellers' complaint and concludes that, as currently pleaded, the breach of contract claim appears to be founded on a claim that Sellers was terminated in violation of Defendant's own policies and procedures and possibly some other agreement as to her employment. Complaint ¶ 71. Sellers has not, however, adequately identified the relevant policies and procedures or otherwise offered factual allegations which might support a claim for breach of contract based on her termination. See generally Small v. Springs Indus., Inc., 292 S.C. 481, 357 S.E.2d 452 (1987) (holding employment at-will may be modified by employer's issuance of handbook setting forth progressive discharge procedures). The court, therefore, dismisses Sellers' breach of contract claim WITHOUT prejudice as to Employer and with prejudice as to the individual Defendants.
Sellers does not object to the recommendation that these claims be dismissed. Finding no clear error, the court adopts the recommendation of the Report and dismisses both claims. This dismissal is WITH prejudice as there is no suggestion that Sellers could allege facts which might support either claim.
Sellers' claim for retaliatory discharge appears to be founded on state law as she states the discharge was "in violation of the public policies of the State of South Carolina and the United States of America." Complaint ¶ 80. This is confirmed by her response to Defendants' motion to dismiss in which she relies on Ludwick v. This Minute of Carolina, Inc., 287 S.C. 219, 337 S.E.2d 213 (1985).
As explained in the Report, a Ludwick claim is available only in limited circumstances such as where an employee is terminated for refusing to commit a criminal action or where the termination itself is a crime. Report at 10. Moreover, such a claim may only be advanced when there is no other available remedy. Id. (discussing Epps v. Clarendon County, 304 S.C. 424, 405 S.E.2d 386 (1991)).
Sellers alleges that she was terminated for challenging racial discrimination. Such a claim may be advanced under at least two federal statutes (Title VII and Section 1981). The availability of these statutory remedies precludes Sellers from advancing a state law retaliatory discharge claim under Ludwick. This cause of action is, therefore, dismissed WITH prejudice.
Sellers' allegations under both her defamation claim and her tortious interference with contract/prospective advantage claim are little more than boilerplate allegations, devoid of sufficient facts to satisfy the pleading standards applicable in federal court. The relevant standards and deficiencies are addressed, in detail, in the Report. The court, therefore, grants the motion to dismiss both claims.
These claims are dismissed WITHOUT prejudice as to all Defendants. Sellers may, therefore, seek to amend to cure the deficiencies. If she elects to do so, her allegations must be specific as to the comments she believes were made (or other improper actions she believes were taken), by whom and to whom the comments were made, the resulting injury, and the approximate dates.
For the reasons set forth above, the court adopts the recommendations of the Report in part, as modified herein, and dismisses all of Sellers' claims other than her claim under 42 U.S.C. § 1981. The dismissal is WITHOUT prejudice as to the claims for breach of contract (with respect to Employer), defamation (all Defendants), and intentional interference with contract/prospective advantage (all Defendants). Dismissal is WITH prejudice as to the claims for breach of contract (to the extent asserted against the individual Defendants), outrage (all Defendants), wrongful discharge in violation of public policy (all Defendants), and negligence (all Defendants).
This matter is again referred to the Magistrate Judge for further pretrial proceedings.
