WILLIAM F.

[BICK] HALLIGAN ALLISON AIKEN HANNA

KATHRYN LONG MAHONEY CONNIE P. JACKSON
ALLEN D. SMITH * KIMBERLEY KELLEY BLACKBURN
HALLIGAN MAHONEY WILLIAMS
SMITH FAWLEY & REAGLE, PA
SHIRLEY M. FAWLEY JASMINE ROGERS DRAIN
THE TOWER AT 1301 GERVAIS STREET, SUITE 1400 JOHN M. REAGLE DWAYNE T. MAZYCK
PO BOX 11367 COLUMBIA, SC 29211 VERNIE L. WILLIAMS SHENEKA S. LODENQUAI
PH 803.254.4035 THOMAS K. BARLOW
HMWLEGAL.COM

CONFIDENTIAL PRIVILEGED
ATTORNEY-CLIENT COMMUNICATION

TO: Mark W. Tollison

FROM: Kathryn Long Mahoney

John M. Reagle
Thomas K. Barlow

DATE: March 11, 2019

RE: County Administrator Contract Issue

You have asked for our legal opinion regarding the current validity, and thus enforceability, of
the Employment Agreement the County of Greenville entered into with County Administrator
Joe Kernell (“Administrator”) on December 7, 2011. As we understand it, the Greenville County
Council (“Council”) is a continuing body composed of 12 members elected from single-member
districts, serving four year terms that are staggered between seven members and five members.
In December 2011, the Council entered into a six year Employment Agreement with the
Administrator, which is extended automatically and indefinitely for additional one year terms,
unless the Council terminates the agreement and provides severance pay. Severance pay is not
required if the Council terminates the agreement for cause, as defined in the Agreement, or if the
Administrator resigns. We further understand that the Council has not taken any action to renew
the Employment Agreement since its inception in 2011. For the reasons set forth below, we
believe a court would likely find the 2011 Employment Agreement unenforceable as against the
Council in 2019, and the Administrator currently is an at-will employee of the County.

Execution of the Contract

By way of background, at a meeting of the Council Committee of the Whole on November 1,

2011, the agenda reflected as Item 4 “Contract Renewals.” The minutes from the Council
Committee of the Whole meeting on November 1, 2011, reflect that a motion was made to go
into Executive Session for “discussion of employment, appointment, compensation, promotion,
demotion, discipline, or release of an employee regulated by the County Council, or the
appointment of a person to a public body …” After reconvening in public session, a motion was
made “to authorize the Council Chairman and Vice Chairman to negotiate contract renewals with

* Certified Specialist in Employment Law Also admitted in District of Columbia Also admitted in Georgia
Certified Mediator Also admitted in North Carolina
the County Administrator and the County Attorney per the discussion in Executive Session.
Motion carried.”

At the Council’s Regular meeting on that same date (November 1, 2011), the agenda for the
Regular meeting provided as Item 11 “Committee Reports.” The minutes from the Regular
meeting showed action on Item 11 as follows: “On behalf of the Committee, Councilor Taylor
moved to authorize the Council Chairman and Vice Chairman to negotiate renewals with the
County Administrator and the County Attorney per the discussion in Executive Session. Motion
carried.”

The actions of the Council at their Committee of the Whole meeting on November 1, 2011, as
well as their Regular meeting on the same date, appear to be valid actions and resulted in an
Employment Agreement entered into on December 7, 2011, between the County of Greenville
and the Administrator, assuming that the terms of the contract were consistent with the
discussion of the Council during executive session on November 1, 2011.

Relevant Terms of the Employment Agreement at Issue

The terms of the Administrator’s contract relevant to this opinion are contained in Sections 2
(Term); 3 (Termination, Severance Pay and Resignation); and Section 11(e)(Other Terms and
Conditions of Employment). The relevant portions follow:

SECTION 2. TERM

a. The Administrator shall serve at the pleasure of the Council through the date
of this contract extension period of his employment (January 18, 2017).

b. After January 18, 2017, this Agreement will be extended automatically for
one (1) year periods, on the same terms and conditions as herein provided,
unless either party terminates this agreement as provided in Section 3 below.

c. Nothing herein shall be deemed to prevent, limit or otherwise interfere with in

any way the right of Council to terminate the Administrator at any time;
provided, however, that such termination shall be in accordance with the
provisions of Section 3 below.

d. Nothing herein shall be deemed to prevent, limit or otherwise interfere with

the right of Administrator to voluntarily resign at any time; provided,
however, that such resignation shall be in accordance with Section 3 below.

SECTION 3. TERMINATION, SEVERANCE PAY AND RESIGNATION

a. In the event that Administrator is terminated or discharged by the Council,

except by termination with cause (as provided below), the County agrees to
pay Administrator a lump sum cash payment equal to twelve (12) months’
pay, all accrued annual leave (as set forth in Section 5 below) and sick leave
(as set forth in Section 5 below), excluding the accrual of sick leave and

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 annual days from the date of termination. The County also agrees to pay
Administrator the cost of premiums for 12 months for medical, hospitalization
insurance and other benefits he was receiving at the time of his termination,
not to exceed the amount paid by the County for these premiums during the
last 12 months when Administrator was employed. Contemporaneously with
the delivery of all severance pay and any other payments described in this
paragraph 3(a), the Administrator agrees to execute and deliver to the County
a release releasing the County of all further claims that the Administrator may
have against the County.

b. The Council may terminate the Administrator for cause because of 1.) a
conviction for or if the Administrator pleads no contest to (a) any illegal act
involving personal gain to him; (b) a felony; or (c) a crime of moral turpitude;
or 2.) malfeasance in office; or 3.) if the Administrator refuses to perform his
duties. Then and in any of those events, the County, by a majority vote of
Council, may terminate this Agreement and the County shall have no
obligation to pay any of the severance or compensation sums or pay any of the
benefits, including accrued annual and sick leave, set forth in the preceding
paragraph and set forth in Section 5 below. Such termination for cause may
be made without notice except that required by the South Carolina Freedom of
Information Act.

c. In the event the County, at any time during the term of this Agreement
reduces the salary or other financial benefits of the Administrator, or in the
event the County refuses, following written notice, to comply with the
provisions of this Agreement that inure to the benefit of the Administrator, or
Administrator resigns following a vote by the County Council that it is
Council’s wish that he resign, then, in that event, Administrator may, at the
election of the Administrator, be deemed to be “terminated” without cause at
the date of such reduction, refusal to comply with the terms herein or vote
requesting resignation.

d. Administrator shall give the Council a minimum of three (3) months written
notice, in advance, subject to sections (a) through (c) herein, in the event the
Administrator voluntarily resigns his position and appointment with the
County. All benefits and salary shall cease as of the date Administrator
voluntarily leaves employment of the County, however, the Administrator is
entitled to payment of all unused leave, as set forth in Section 5 below.

e. Medical disability of the Administrator. Medical disability shall be certified

by a licensed physician chosen by the County and shall mean permanent
disability or continued inability to perform the essential functions of the
Administrator’s duties because of sickness, accident, injury, mental or
physical incapacity or health for a period of ninety (90) consecutive days
subject to all rights under the law. In such case, Council may at its option
unilaterally terminate this Agreement by a majority vote of the members of
Council and written notification thereof. Any severance compensation due

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 pursuant to section (a) hereinabove shall be reduced dollar-for-dollar by any
amount received as a direct result of disability insurance provided by the
County.

SECTION 11. OTHER TERMS AND CONDITIONS OF EMPLOYMENT

e. If any provisions hereof shall be deemed unlawful, invalid, or otherwise

unenforceable, the remainder of this Agreement shall be deemed severable
and shall remain in full force and effect.

Enforceability of Employment Agreement in 2019

Based on the general principle that a local governing body cannot bind its successor with regard
to the employment or removal of a public officer, it is our opinion that a court would likely find
that the Employment Agreement entered into between the Council and the Administrator on
December 7, 2011, is not enforceable against the current Council. This is particularly true, given
the fact that we understand that Council has not acted to renew the Employment Agreement in
any manner since 2011. In Piedmont Public Service District v. Cowart, the Court of Appeals of
South Carolina held that a 20 year employment contract between the Piedmont Public Service
District and its administrator that required five years’ severance pay was not binding on
successor boards of the District. Specifically, the Court held:

[I]f the term of the contract in question extends beyond the term of the governing
members of the municipality entering into the contract, the validity of the contract
is dependent on the subject matter of the contract. The general rule is that, if the
contract involves the exercise of the municipal corporation’s business or
proprietary powers, the contract may extend beyond the term of the contracting
body and is binding on successor bodies if, at the time the contract was entered
into, it was fair and reasonable and necessary or advantageous to the municipality.
However, if the contract involves the legislative functions or governmental
powers of the municipal corporation, the contract is not binding on successor
boards or councils.

Piedmont Public Service District v. Cowart (“Cowart I”), 459 S.E.2d 876, 880 (S.C. App. 1995).
The court further found that there was no doubt that the contract between Cowart and the
Piedmont Public Service District involved governmental or legislative powers. Id. at 881.

In a subsequent decision regarding this issue, Cunningham v. Anderson County, the South
Carolina Court of Appeals found a county administrator’s 2008 contract with Anderson County,
adopted by the Anderson County Council on November 18, 2008, on a 5-2 vote (which included
three council members who had not been re-elected earlier that month), was void and could not
bind the newly constituted Anderson County Council that began its term in January of 2009.
The council’s members were also elected for two-year, non-staggered terms. Cunningham v.
Anderson County (“Cunningham I”). 741 S.E.2d 545 (S.C. App. 2013). In Cunningham, the
court continued to endorse the principle that a local governing body cannot bind its successor
with regard to the appointment or removal of a public officer. Id. at 552. The court stated, “[I]n
Cowart II our supreme court emphasized that the appointment or removal of a public officer ‘is a

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governmental function that cannot be impaired by an employment contract extending beyond the
terms of the members of the local governing body.’ 324 S.C. at 241, 478 S.E.2d at 837
(emphasis added) (citation omitted).” Cunningham I at 551. Specifically, the court found that
“when determining whether a contract is binding on successor governing bodies, ‘the true test is
whether the contract itself deprives a governing body or its successor, of a discretion which
public policy demands should be left unimpaired.’ Cowart I, 319 S.C. at 133, 459 S.E.2d at 881
(emphasis added).” Cunningham I at 552.

As addressed in the Cowart and Cunningham decisions, the continued employment and
conditions for termination of employment are precisely the kind of contract terms that deprive
successor governing bodies of the discretion to employ an administrator. See, e.g., Cowart I, 459
S.E.2d at 881 (“The District’s discretion to employ the Administrator of the District and set the
terms of his employment is discretionary power which public policy demands remain
unimpaired.”). The Court of Appeals in Cowart I and Cunningham I also expressly reaffirmed
this principle and addressed both its application to continuing governmental bodies and county
councils following the implementation of the Home Rule Act. Cunningham I, 741 S.E.2d at
552-53. Accordingly, in our opinion, the Administrator’s employment contract became void and
unenforceable with the commencement of the term of the Greenville County Council elected in
November 2014 (i.e., at the expiration of the longest term of Council members approving the
contract in 2011).

Further, applying the precedent in the Cowart and Cunningham decisions, we believe the current
employment relationship between the Administrator and the County is “at will.” The Court of
Appeals in Cunningham I clearly held that “[a]ccordingly, all provisions of such a contract,
including provisions for severance pay, are void.” Id. at 553. As a result, “...no part of the
contract is valid or enforceable against the [current] Council.” Id. at 554, fn 20. Consequently,
the current employment status of the Administrator is that he is employed at the pleasure of the
Council for an indefinite term. An employment relationship for an indefinite term is
presumptively terminable at will. Id. at 556, fn. 23, citing Barron v. Labor Finders of S.C., 713
S.E.2d 634, 636-37 (2011) (“In South Carolina, employment at-will is presumed absent the
creation of a specific contract of employment.”). Thus, while we believe the contract is void, the
Administrator’s continued “at will” employment is legitimate.

As a final point, because it was within the 2010 Council’s authority to enter into an agreement
with a term ending with that Council’s term, it is our opinion that the Employment Agreement
was valid and enforceable up to the commencement of the successor Council’s term in late 2014,
and the Administrator is at least entitled to all accrued benefits under the Employment
Agreement up to that time.