Mackrell International South Carolina Employment and Labor Law—A Brief Overview

1. Mackrell InternationalSouth Carolina Employment and Labor Law—A Brief Overview May 29, 2012 David Dubberly

2. South Carolina Payment of Wages Act • S.C. Code Ann. §§ 41-10-41 to 41-10-110 • Notify at time of hire in writing • Wages and hours • Time and place of payment • Deductions from paychecks • Policies on vacation, holiday, and sick leave

3. South Carolina Payment of Wages Act • Notify of changes other than raises in writing seven days in advance • No deductions from wages unless • Required or permitted by law • Employee has been notified

4. South Carolina Payment of Wages Act • Upon termination for any reason • All wages due must be paid • Within 48 hours or by next regular payday if within 30 days • If disagreement on wages due • Give written notice of employer’s position • Pay amount conceded to be due

5. South Carolina Payment of Wages Act • Penalties for failure to notify • $100 per offense • Penalties for failure to pay • Treble damages • Employee’s attorney’s fees and costs • Potential personal liability for managers

6. South Carolina Illegal Immigration Reform Act • S.C. Code Ann. §§ 41-8-10 to 41-8-140 • Enroll in E-Verify • Use E-Verify to confirm work authorization • For all new employees • Within three days of hire

7. South Carolina Illegal Immigration Reform Act • Do not knowingly or intentionally employ unauthorized alien • Otherwise may have imputed license to employ workers and do business in SC suspended or revoked • Enforced by SC Dept. of Labor, Licensing, and Regulation • Random audits • Complaint investigations

8. South Carolina Employee Handbook Law • S.C. Code Ann. § 41‑1‑110 • Employee handbook or other personnel document • NOT contract of employment as matter of law • IF includes “conspicuous” disclaimer

9. South Carolina Employee Handbook Law • What is conspicuous disclaimer? • First page of document • Underlined CAPITAL LETTERS • (For handbooks) signed by employee • Possible language • Handbook is not employment contract • At-will statement • Cannot be changed by oral statements • Right to change, interpret, make exceptions, etc.

10. South Carolina Trade Secrets Act • S.C. Code Ann. §§ 39-8-10 to 39-8-130 • Based in part on Uniform Trade Secrets Act • Employee obligation • Every employee has duty to refrain from using or disclosing employer’s trade secrets • Information is trade secret if it • Has independent economic value due to its secrecy • Is subject to reasonable efforts to keep it secret

11. South Carolina Trade Secrets Act • Definitions • “Economic value” = gives or could give owner advantage over competitors because of its secrecy • “Secret” = not generally known or easily accessible to others in industry • “Reasonable efforts” = information is secured, labeled, and disclosed only on “need to know” basis

12. South Carolina Trade Secrets Act • Trade secrets • Parts checklist, production plans, parts delivery schedule for manufacturing plant • Not Trade Secrets • Customer lists if names on lists available to public through proper sources • Formulas for products if “readily available from the suppliers of [the] raw materials”

13. South Carolina Trade Secrets Act • Remedies • Actual damages or unjust enrichment • Exemplary damages • Injunctive relief • Attorney’s fees • Criminal penalties

14. South Carolina Non-Compete Law • Based on SC case law • Non-competes disfavored, but generally upheld if • Necessary to protect legitimate business interest of employer • Reasonably limited as to time and place • Not unduly restrictive • Reasonable from public policy standpoint • Supported by valuable consideration

15. South Carolina Non-Compete Law • Reasonable time restriction • No longer than reasonably necessary to protect employer’s business interests • SC Supreme Court has enforced non-competes with otherwise valid restrictions lasting three years or less • Unlimited duration not enforceable

16. South Carolina Non-Compete Law • Reasonable geographic restriction • No broader than area in which employee involved in active marketing efforts • Without geographic term not enforceable • Prohibition against contacting existing customers can be valid substitute

17. South Carolina Non-Compete Law • Valuable consideration • Hiring even if on at-will basis • But not continued at-will employment by itself • Promotion with increase in pay

18. Questions/Comments? David Dubberly 803-253-8281 ddubberly@nexsenpruet.com