In a decision this month, the South Carolina Supreme Court held that a third party’s intentional interference with an at-will employee can give rise to a cause of action by a former employee for tortious interference with contractual relations. While the ruling largely protected the employer, it may have the practical effect of putting employers in the middle of lawsuits between employees over alleged misconduct.
In Hall v. UBS Financial Services, Inc., the employer terminated the plaintiff following another employee’s report to UBS’ HR department that the plaintiff had made unwelcome sexual advances towards her. The plaintiff maintained that these allegations were false; however, UBS apparently determined otherwise and terminated his employment as a result. He then filed suit against UBS for breach of the implied covenant of good faith and fair dealing. He also filed suit against the third-party employee for tortious interference with contractual relations.
The case is pending in the U.S. District Court for the District of South Carolina, and that court asked the South Carolina Supreme Court to address three questions:
1. Are terminable at-will employment relationships contractual in nature as a matter of law?
2. 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 the at-will relationship constitute a breach?
3. Can an employer’s termination of an at-will...
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