/opinions/HTMLFiles/COA/3646.htm

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

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Betty P. O'Neal,        Respondent,

v.

Intermedical Hospital of South Carolina,        Appellant.

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Appeal From Richland County
Alison Renee Lee, Circuit Court Judge

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Opinion No. 3646
Heard March 12, 2003 - Filed June 2, 2003

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AFFIRMED IN PART AND REVERSED IN PART 

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Richard J. Morgan, Robyn K. Wietecha, of Columbia; for Appellant.

Laura Puccia Valtorta, of Columbia; for Respondent.

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HUFF, J.: In this wage payment dispute, the trial court trebled the jurys $1,350 award of damages to plaintiff Betty P. ONeal and ordered defendant Intermedical Hospital of South Carolina (Intermedical) to pay ONeal $8,100 in attorneys fees. We affirm in part, and reverse in part.

FACTUAL/PROCEDURAL BACKGROUND

ONeal became employed as a registered nurse for Intermedical on September 21, 1998. ONeal understood that her base pay was to be $18.36 per hour with shift differential pay of an additional $1.50 per hour for night shifts beginning after 11 p.m., and an additional $5.00 per hour for weekend shifts. She further understood that she was required to work every other weekend.

At some point in her employment, ONeal began complaining to Teri Hooper, who was in charge of Intermedicals payroll, that she was not receiving the proper pay. On March 31, 1999, ONeal filed a claim against Intermedical with the Department of Labor for approximately $681.61 in wages owed. Specifically, ONeal asserted that between January 9, 1999 and March 20, 1999, Intermedical improperly withheld wages for 28.18 regular hours at $18.36 per hour, shift differential pay for 17 weekend hours at $5.00 per hour, and shift differential pay for 52.82 night hours at $1.50 per hour.

After an investigation, the South Carolina Department of Labor determined Intermedical failed to comply with the provisions of South Carolina Code Ann. 41-10-40(D) in that it failed to pay ONeal $376.09 in wages in accordance with her regular pay schedule. [1] Nonetheless, the Department of Labor ultimately found that as of March 25, 1999, ONeal had been paid all wages due to her and had in fact been overpaid by $110.77. In August of 1999, the Department of Labor assessed a $375.00 penalty against the hospital for the late payment of wages.

In April 1999, Virginia Herring, Intermedicals nurse manager, created, posted, and distributed copies of the nurses working schedule for April 11 through May 9, 1999. Herring scheduled ONeal to work a number of shifts, including a shift beginning at 11:00 p.m. on Friday, April 23, 1999. By letter dated April 13, 1999, ONeal complained to Herring that her regular working schedule of two eight hours shifts and two twelve hour shifts had been changed to five eight hour shifts without prior notice. ONeal also complained that in creating the schedule, Herring failed to consider a prior request for vacation and also improperly split [her] weekend again by scheduling her to work on Friday, April 23.

On April 14, Herring and ONeal met to discuss the concerns ONeal expressed in her April 13 letter; however, Herring and ONeal dispute the content of the discussion. According to Herring, the parties did not discuss the 11:00 p.m. April 23 shift during their meeting and Herring did not say or do anything during the discussion to give ONeal the impression she would remove her from the schedule for April 23. Herring further stated she informed ONeal she could not guarantee the schedule ONeal requested in her April 13 letter. ONeal, on the other hand, asserted, although she remained on the master schedule for April 23, Herring removed her from Herrings personal copy of the schedule and assured her she would fix it.

ONeal told a number of her co-workers that, although her name still appeared on the posted work schedule for the 11:00 shift on April 23, she would not be working that night because she had discussed the matter with Herring and had arranged to have the night off. Based on information the other employees relayed to Herring about these comments, Herring approached ONeal on the morning of April 23 and informed her she was still on the schedule and was expected to report to work that night. ONeal responded that she would not report to work because Herring had already given her the night off and because Friday was a weekend night. According to Herring, she explained to ONeal that the hospitals shift/differential pay policy did not apply to scheduling and Saturday and Sunday were weekend days for scheduling purposes. ONeal argued that Friday night shifts constituted weekend work according to the hospitals policy. Herring reiterated that she expected ONeal to report to work that night and inquired whether ONeal was refusing to do so. ONeal confirmed that she would not report to work that night. Herring again told ONeal she expected her to report to work that night. ONeal replied, You do what you gotta do and Ill do what I gotta do.

ONeal did not, in fact, work on April 23. On April 28, 1999, Herring called ONeal in for a conference, at which time she informed ONeal her employment with Intermedical was being terminated for insubordination, refusal to work a scheduled shift, and unexcused absence from work.

ONeal instituted the instant action against Intermedical on June 1, 1999, alleging (1) wrongful discharge in retaliation for filing a claim with the Department of Labor; (2) nonpayment of wages earned during the employment relationship including weekend shift differentials, overtime work, night hours, and regular hours; (3) and nonpayment of 138.42 hours of accrued time off pay due upon her discharge from employment. ONeal also sought an award of attorneys fees and costs. Intermedical answered, denying ONeal was entitled to any of the relief requested in her complaint. Intermedical also affirmatively asserted that it acted at all times in good faith and that ONeals own conduct caused all adverse employment action taken against her.

Prior to trial, Intermedical sought and was granted leave to amend its pleading to include, as an additional affirmative defense, the assertion that ONeal breached her duty of loyalty to the hospital. [2] Intermedical also moved for summary judgment on ONeals claim for wrongful discharge. The trial court granted the motion and the trial proceeded on the actions for (1) nonpayment of wages due during the employment relationship and (2) nonpayment of wages due at the time of termination.

At trial, ONeal asserted the hospital shorted her 28.18 hours of regular pay at $18.36 an hour, 17 hours of weekend pay at $5.00 an hour, and 52.82 hours of night pay at $1.50 an hour, for a total due of $681.61. She also sought 138.42 hours of accrued time off at $18.36 an hour, for a total of $2,541.39. Intermedical took the position that although it failed to pay ONeal all of her wages in a timely manner, the hospital had, by the time of her discharge, paid ONeal all of the wages she was due during her employment at the hospital, including shift differential pay. Intermedical did not dispute that ONeal had accrued 138.42 hours of time off for which she was not paid at the time of her discharge. The hospital sought to establish, however, that ONeal was terminated for misconduct, in which case the hospitals policy prohibits payment for accrued time off. In attempting to establish that ONeals misconduct warranted her termination, Intermedical introduced evidence relating to her failure to work her scheduled shift on April 23, 1999, as well as other incidents such as nodding off at work and being unfriendly to co-workers.

At the close of evidence, Intermedical requested that the trial court give the following charge to the jury (Defendants Request to charge No. 10):

It is not for you to judge the wisdom or reasonableness of any of [Intermedicals] business decisions. You cannot require an employer to use business practices or policies you prefer or like, nor is it your role to second-guess or substitute your judgment for [Intermedicals] judgment.

Likewise, it was [Intermedicals] prerogative and right, not [ONeals], to establish relevant criteria and expectations regarding performance for any work that [ONeal] might have performed, if any, for [Intermedical].

The trial courts charge to the jury did not include the requested language; however, the court charged the jury as follows:

Among the fundamental duties of the employee is the obligation to yield obedience to all reasonable rules, orders, and instructions of the employer and willful or intentional disobedience as a general rule justifies dismissal of the employee.

The employee is bound to obey all of the employers lawful and reasonable commands even though such commands may under the circumstances seem harsh and severe, but the employer has a right to manage his own affairs and to establish and enforce any lawful and reasonable policies and instructions and it must be a very extreme case in which an employee would be justified in refusing to obey those orders.

Intermedical objected to the trial courts failure to include the requested charge. The trial court noted the exception, but declined to recharge the jury, reasoning that the courts original charge sufficiently encompassed the requested language.

The jury returned a $1,350 verdict in favor of ONeal for wages owed after discharge, but found in favor of Intermedical on the action for wages due during the period of employment.

After the jury returned its verdict, ONeal moved for attorneys fees and treble damages. By order dated March 9, 2001, the trial court granted both motions, trebling the damage award to $4,050 and ordering Intermedical to contribute $8,100 toward ONeals $9,112.50 attorneys fees bill. This appeal followed.

LAW/ANALYSIS

I. Jury Charge

Intermedical asserts the trial court erred in failing to instruct the jury in accordance with Defendants Request to Charge No. 10. Specifically, Intermedical argues the trial courts charge to the jury did not adequately instruct the jury as to its obligation to apply and enforce Intermedicals policies regardless of personal preferences or opinions, thereby creating the opportunity for the jury to judge the hospitals policy on nonpayment for accrued time off to employees terminated for misconduct. We disagree.

The trial judge is required to charge only the current and correct law of South Carolina. McCourt v. Abernathy, 318 S.C. 301, 306, 457 S.E.2d 603, 606 (1995). Further, [r]efusal to give a properly requested charge is not error if the general instructions are sufficiently broad to enable the jury to understand the law and the issues involved. Id.

Intermedical cites two federal cases involving employment discrimination in support of its requested jury charge. In Furnco Constr. Corp. v. Waters, 438 U.S. 567, 578 (1978), the Supreme Court, in discussing the Seventh Circuit Court of Appeals decision regarding employer hiring procedures, stated, Courts are generally less competent than employers to restructure business practices, and unless mandated to do so by Congress they should not attempt it. In Holder v. City of Raleigh, 867 F.2d 823, 828 (4^th Cir.1989), the Court of Appeals, citing Furnco, stated, We have no authority simply to require employers to use the best standards and procedures available to them. Neither of these cases embrace the specific law as proposed in Intermedicals request to charge. Intermedical cites no South Carolina law supporting such a charge.

Further, even if we were to assume the proposed charge was the correct and current law of South Carolina, we find no error. Although the trial court refused to instruct the jury in exact accordance with Intermedicals request to charge, the court explicitly instructed the jury that an employee is bound to obey all of the employers lawful and reasonable commands even though such commands may under the circumstances seem harsh and severe. The court further instructed the jury that the employer has a right to manage his own affairs and to establish and enforce any lawful and reasonable policies and instructions . . . In our view, the courts instructions to the jury sufficiently conveyed the concepts that an employer has the right to establish and enforce any lawful and reasonable business policies, and an employee is obligated to obey the employer, even if an employers commands or policies seem harsh or severe. Accordingly, we find the instructions were sufficiently broad to enable the jury to understand the law and the issues involved.

II. Treble Damages

Intermedical also argues the trial court erred in awarding ONeal treble damages. We agree.

Section 41-10-80(C) of the South Carolina Wage Payment Act provides in part:

In case of any failure to pay wages due to an employee as required by Section 41-10-40 or 41-10-50 the employee may recover in a civil action an amount equal to three times the full amount of the unpaid wages, plus costs and reasonable attorney's fees as the court may allow.

S.C. Code Ann. 41-10-80(C) (Supp. 2002).

In interpreting this section, our Supreme Court has held that the statutes explicit provision that the employee may recover treble damages signifies permission, which generally means that the action spoken of is optional or discretionary. The court went on to state as follows:

Thus, by using may, rather than shall, the legislature has provided that the penalty is discretionary with the judge. This interpretation accords with the purpose of the Wage Payment Act, to wit: to protect employees from the unjustified and wilful retention of wages by the employer. The imposition of treble damages in those cases where there is a bona fide dispute would be unjust and harsh.

Rice v. Multimedia, Inc., 318 S.C. 95, 98, 456 S.E.2d 381, 383 (1995) (emphasis added) (citations omitted).

Subsequent to Rice, our Supreme Court considered the wage withholding case of Futch v. McAllister Towing of Georgetown, Inc., 335 S.C. 598, 518 S.E.2d 591 (1999). Futch was employed by McAllister Towing (Employer) as a tugboat captain and local manager of its operations in Georgetown. After Employer informed Futch his job would terminate at the end of 1993, Futch, who knew Employer considered ceasing operations in the area, began making plans with a co-worker to start their own tugboat business. After learning of Futchs plans, Employer fired Futch and refused to pay him $4,200 in monthly commissions Futch had earned. Futch brought an action against Employer seeking $4,200, as well as treble damages and attorneys fees, under the Wage Payment Act. The jury awarded Futch the full $4,200 sought, and the trial judge trebled the damages and awarded Futch attorneys fees. On appeal, this court reversed, holding the trial judge should have granted Employers directed verdict motion. The Supreme Court granted certiorari and reversed this court, reinstating the jury verdict. The court, however, declined to reinstate the award of treble damages and attorneys fees finding there was a bona fide dispute about whether Employer owed Futch any wages. In support of its decision, the court cited Rice for the proposition that the imposition of treble damages in cases where there is a bona fide dispute would be unjust and harsh, and [the] Legislature did not intend to deter litigation of reasonable good faith wage disputes. Futch, 335 S.C. at 612, 518 S.E.2d at 598.

In determining the imposition of treble damages was proper in the instant case, the trial court reasoned:

The Court finds the issue of whether [Intermedical] acted in good faith and terminated [ONeal] for cause was submitted to the jury. The jury determined that [ONeal] was entitled to recover accrued time off and awarded her a verdict. The jury therefore determined [Intermedical] did not terminate [ONeal] for cause and thus no good faith basis for refusal to pay benefits was established. Accordingly, the Court hereby trebles the jury verdict to $4,050.00.

The jurys verdict in favor of ONeal does not lend itself to the interpretation espoused by the trial court. As evidenced by the decisions in Futch and Rice, a finding that an employee is entitled to recover unpaid wages is not equivalent to a finding that there existed no bona fide dispute as to the employees entitlement to those wages. Further, Intermedical did not dispute the number of time off hours ONeal had accrued at the time she was terminated. Nonetheless, the jury awarded her damages equal to payment for only a portion of those hours, indicating the jury determined that Intermedical properly withheld payment for the remaining portion of accrued hours. The jurys finding in this regard belies the trial courts determination that, based on the award of damages, the jury necessarily determined that Intermedical failed to establish a good faith basis for refusal to pay the wages at the time of ONeals discharge from employment. Therefore, to the extent the trial court found the jurys verdict was equivalent to a finding that no bona fide dispute existed, such finding was erroneous.

At any rate, our reading of the record convinces us a bona fide dispute existed as to whether and to what extent ONeal was entitled to payment for accrued time off. See The Father v. South Carolina Dept of Soc. Servs., Op. No. 25603 (S.C. Sup.Ct. filed March 10, 2003) (Shearouse Adv. Sh. No. 9 at 30-31) (holding, where the decision to impose sanctions is to be decided by a judge and not a jury, it sounds in equity rather than law such that the South Carolina Constitution mandates the appellate court take its own view of the facts). It is undisputed Intermedicals policy was to refuse payment for accrued time off to employees terminated for misconduct, and ONeal does not contest the validity of the policy itself. The parties offered contradictory testimony as to whether Herring ever agreed to remove ONeal from the schedule for April 23, 1999. It is undisputed, however, that prior to the scheduled shift, Herring made clear to ONeal that she was expected to report to work at the scheduled time and ONeal made a conscious decision not to do so. Further, the parties expressed conflicting interpretations of the definition of weekend hours for purposes of determining whether the terms and conditions of ONeals employment obligated her to work on the disputed date. Thus, we find there existed at least a bona fide dispute as to whether ONeal was terminated for misconduct and, concomitantly, a bona fide disagreement as to whether she was entitled to payment for accrued time off. Again, the propriety of treble damages under the Wage Payment Act turns not on whether an employer is successful in defending against a suit for nonpayment of wages, but whether there existed a bona fide dispute concerning payment of the wages.

Accordingly, the trial courts award of treble damages is reversed and the jurys original award of damages reinstated.

III. Attorneys Fees

Finally, Intermedical asserts error in the award of attorneys fees to ONeal. It argues there was a good faith dispute as to the wages due ONeal and therefore ONeal was not entitled to attorneys fees. Intermedical further argues, even if ONeal was entitled to collect some attorneys fees, the lower court awarded her an excessive amount based on the various factors for awarding attorneys fees.

We agree with Intermedical that there was a bona fide dispute as to whether Intermedical owed ONeal any wages such that the imposition of the award of attorneys fees was also improper pursuant to Futch v. McAllister Towing of Georgetown, Inc., 335 S.C. 598, 518 S.E.2d 591 (1999) and Rice v. Multimedia, Inc., 318 S.C. 95, 456 S.E.2d 381 (1995).

CONCLUSION

For the foregoing reasons, the decision of the trial court is affirmed as to the jury charge, and reversed as to the award of treble damages and attorneys fees.

AFFIRMED IN PART AND REVERSED IN PART.

ANDERSON, J., and MOREHEAD, A.J., concur.

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