Barbara Melvin, the South Carolina Ports Authority’s former President and CEO, abruptly resigned in August 2025. The Authority, by agreement, paid her about $920,000, in severance and retirement contribution payments, allowed her to keep her company cell phone, iPad and laptop, and paid her the balance of unused accrued sick time. This change comes at a time when container traffic through the port has fallen, and the Authority lost a high-profile court battle with the dockworker’s union.
Subsequently, Frank Heindel, a Mount Pleasant resident and retired businessman, filed suit against the South Carolina State Ports Authority (SCPA) on August 19, 2026 in the Ninth Judicial Circuit. The suit alleges SCPA held a closed-door executive session to discuss the $920,000 separation package they would later grant to former SCPA President and CEO Barbara Melvin once she left SCPA. Under S.C. Code Ann. § 54-3-103, separation packages such as this one require a recorded public vote.
The Statutory Framework
Since SCPA is expressly named as a “public body” under S.C. Code Ann. § 30-4-20(a), actions of the board are governed by the South Carolina Freedom of Information Act (FOIA). FOIA requires SCPA to follow two important obligations:
- First, SCPA must identify which statutory category listed in § 30-4-70(a) applies as “specific purpose” for the executive session.
- Second, no action may be taken in executive session except to adjourn or return to public session. A public body cannot commit itself to a course of action behind closed doors.
Mr. Heindel’s lawsuit alleges SCPA violated FOIA by both failing to announce the “specific purpose” for the executive session and by taking forbidden action during the closed session.
SCPA Code specifically provides that compensation for the agency’s executive director, expressly defined to include severance, “shall be approved by the board of directors in a public vote,” § 54-3-103. Mr. Heindal’s complaint treats this provision as inseparable from FOIA’s open meetings mechanics. Since the only way a public vote can happen and be documented is through an open meeting with recorded minutes, a failure to conduct that vote is simultaneously a violation of § 54-3-103 and § 30-4-90(a)(3).
The Executive Session Announcement Claim
SCPA’s board convened two executive sessions at its August 19, 2025 meeting. The first, listed on the public agenda, covered three procurement items. The second was not listed on the agenda. It was called after six unrelated contracts had already been approved, and Chairman Stern announced executive session using the same catch-all recitation of all five statutory categories under § 30-4-70(a), naming none of them specifically. From the public’s perspective, this pattern reads less like disclosure and more like a boilerplate formula used to close the door whenever convenient.
Mr. Heindel’s suit relies upon a case from 2001, Quality Towing, Inc. v. City of Myrtle Beach, where the South Carolina Supreme Court rejected the idea that FOIA is satisfied so long as attendees have a general sense of what a closed session will address. Quality Towing, Inc. v. City of Myrtle Beach, 340 S.C. 29 (2000). If Myrtle Beach’s single vague announcement failed there, reciting all five categories at once fails the Port Authority here. A body that names every possible justification at once has, functionally, named none of them. Mr. Heindel’s suit also alleges that Melvin’s separation was substantively discussed, and effectively agreed to, during that session. He points to the timing of the entire situation as evidence. A fully negotiated agreement, with specific dollar amounts and a consulting rate, was carried out within 48 hours with no public meeting in between. That is circumstantial, but the burden of explaining it arguably sits with SCPA. His suit contends a package that detailed does not usually come together in two days, making the SCPA’s conduct extremely suspect.
The Public Vote Claim Under § 54-3-103
The lawsuit’s other claim turns on Melvin’s 2020 employment contract which draws a sharp line between two scenarios. Termination without cause, or resignation for a defined “Good Reason,” triggers severance proceedings under section 5(c). Resignation without invoking “Good Reason” falls under Section 5(b), which does not give her any amount above what she had already earned.
Melvin’s actual resignation letter was one sentence, effective immediately and with no mention of Good Reason or no allegation that SCPA did anything wrong. It does not meet notice requirements that Section 4(b) requires, thus triggering Section 5(b) which contractually owed her nothing. Everything in the 2025 separation agreement, the $822,780 payment, the roughly $100,000 retirement contribution, and the $350-an-hour consulting deal, was therefore new compensation. These payments are new compensation, not a payout of an existing right, which requires the board to approve in a public vote according to § 54-3-103.
SCPA’s own explanation undercuts its position further. Outside counsel Randolph Lowell told Mr. Heindel in October that no board resolution was needed because the payment “was less than what was contractually obligated for a termination without cause. Plaintiff’s Complaint, Ex. G Heindel v. S.C. State Ports Auth., No. 2026-CP-10-04396 (Charleston Cty. Ct. Com. Pl. filed Aug. 17, 2026).
That explanation measures the payment against Section 5(c), the wrong provision entirely, since Melvin was neither terminated without cause nor resigned for Good Reason. Measured against the right provision, section 5(b), the payment exceeds what the contract required by the full amount. Counsel’s email reads less like a justification and more like an accidental admission that no exemption from the public-vote requirement ever applied.
Relief Sought and What’s Next
Mr. Heindel seeks only declaratory and injunctive relief. That relief would come in the form of a ruling that SCPA violated FOIA and § 54-3-103, an injunction requiring a public vote before future compensation deals, and the requirement that SCPA post any adverse judgment on its website for six months. Heindel is only concerned with preserving public accountability and this is not an attempt to take back the money given to Melvin. This suit is a reminder to the SCPA and other agencies across South Carolina that their governing board is required to adhere to the statutory rules governing their actions thus ensuring the board is providing its full fiduciary responsibility to its employees and the public funding their existence.
This suit is ongoing and an court date is expected to be set soon.