No. 86-60 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1987 

DALLAS JOHNSON, 

Plaintiff and Respondent, 

-vsBOZEMAN SCHOOL DISTRICT NO. 7, 

Defendant and Appellant, 

APPEAL FROM: District Court of the Eighteenth ~udicial District, 

In and for the County of Gallatin, 

The Honorable Byron Robb, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

White & Seel; Donald E. White, Bozeman, Montana 

For Respondent: 

Kirwan & Barrett; Peter M. Kirwan, Bozeman, Montana 

Filed: 

Submitted on Briefs: Nov. 21, 1986 

Decided: March 18, 1987 

MAR 1 8 7987 
Mr. Chief Justice J. A. Turnage delivered the Opinion of the 

Court. 

Rozeman School District No. 7 appeals a September 30, 

1985, order of the Eighteenth Judicial District Court, 

Gallatin County. The order affirmed a Human Rights Commission determination that Dallas Johnson was unlawfully discriminated against by the School District on the basis of 

marital status. Johnson cross-appeals that part of the order 

which denied him tenure, attorney fees, and the right to have 

his damages recalculated. 

The School District raises two issues for our review: 

1. Did the Human Rights Commission and the District 

Court err in finding that the School District discriminated 

against Johnson on the basis of his marital status? 

2. Did the Human Rights Commission and the District 

Court err by failing to find that Johnson's claim is barred 

by laches? 

Johnson raises three additional issues: 

3. Did the Human Rights Commission abuse its discretion by failing to award Johnson tenure with the School 

District? 

4. Did the Human Rights Commission abuse its discretion by failing to exclude Johnson's summer earnings from its 

calculation? 

5. Did the District Court abuse its discretion by 

failing to award Johnson his reasonable attorney fees? 

We reverse on Issue 1, which renders moot Issues 2, 3, 

4 and 5. 

In June 1975, Dallas Johnson applied for a position as 

a physical science teacher at Bozeman Junior High within 

School District No. 7 (School District). Johnson has a 

Bachelor's degree from Montana State University and a 
Secondary Teacher's Certificate. Johnson's wife was a teacher at Bozeman Junior High. At the time of Johnson's application, the School District had a policy in effect which 

prohibited persons of the same immediate family from teaching 

in the same school. Johnson was unaware of this policy at 

the time he applied with the School District. At the outset, 

we note that the School District properly abandoned this 

policy in 1981. 

Donovan Miller was the personnel director for the 

School District from 1975 to 1980. Part of his job involved 

screening all applications for teaching in the School District. His procedure was to review the applications, assign 

each one a numerical rating, and then send those applications 

with the highest ratings to the principal of the school where 

an opening existed. The applicants were rated on a scale 

from "one to five;" a rating of "one" was superior and a 

rating of "five" was poor. Johnson's application was rated 

along with a large number of other applicants for the teaching position at Bozeman Junior High. Johnson was rated at 

"four." The other applicants all had higher ratings than 

Johnson. 

The School District had never hired any one rated less 

than "two." Miller's policy was to send only those applications rated a "one" or "two" to the particular principal for 

review. However, the principal doing the interviewing could 

request a particular application from Miller. 

Francis Olson was the principal at Bozeman Junior High 

from 1967 to 1981. He was familiar with Johnson because 

Johnson had student-taught at the junior high. Soon after 

Johnson applied for the teaching position, he contacted Olson 

to ask whether Olson had received Johnson's application. 

Since Olson had not yet received it, Olson called Miller to 

inquire about the application. Olson requested that 
Johnson's file be forwarded to him for review. Miller did 

not refer to Johnson's low rating, but only told Olson that 

he would not send the application because the School District's policy prohibited Johnson's employment at Bozeman 

Junior High, since Johnson's wife was already employed there. 

Shortly thereafter, Olson told Johnson what Miller had said. 

On July 18, 1975, Johnson filed a complaint with the 

Human Rights Commission alleging that the School District 

violated $ 49-2-303, MCA, by discriminating against him on 

the basis of his marital status. On June 21, 1976, and on 

December 19, 1979, he filed additional amended complaints 

with the Commission alleging the same violations as were 

alleged in his initial complaint. However, the Commission 

was unable to conduct an investigation on the matter until 

October 1979 because of the pendency of ap action brought by 

the School District against the Commission. 

On December 17, 1980, the Human Rights Commission 

issued a reasonable cause finding, and on May 18, 1982, a 

hearing was held before an examiner appointed by the Comrnission. The hearing examiner found that the School District 

had unlawfully discriminated against Johnson on the basis of 

marital status, and ordered the School District to offer 

Johnson the next available teaching position in the system. 

Additionally, the examiner awarded Johnson "back pay and 

front pay." On Parch 31, 1983, the case was heard before the 

Human Rights Commission. It affirmed the findings and proposed order of the hearing examiner. Johnson was awarded all 

rights and privileges that would have accrued by reason of 

employment with the School District since 1975, with the 

exception of tenure. The award of "back pay and front pay" 

was offset by the amount that Johnson had actually earned 

since 1975. The School District then filed a petition for 

iudicial review with the District Court. On September 30, 
1985, the District Court affirmed the decision of the Human 

Rights Commission. Both parties have appealed the judgment 

of the District Court. 

Issue 1 

Did the Human Rights Commission and the District Court 

err in finding that the School District discriminated against 

Johnson on the basis of his marital status? 

At the time Johnson applied for a teaching position 

with the School District, the School District had a policy in 

effect which prevented spouses from teaching in the same 

school. The Human Rights Commission ultimately concluded 

that Johnson was qualified for the teaching position he 

applied for and was prevented from consideration because - of 

the anti-nepotism policy. It also concluded that Johnson had 

been unlawfully discriminated against, in violation of 

S 49-2-303 (1) (a), MCA, which provides: 

It is an unlawful discriminatory practice for . . . an employer to refuse 

employment to a person, to bar him from 

employment, or to discriminate against 

him in compensation or in a term, condition, or privilege of employment because 

of his . . . marital status . . . [Emphasis added. ] 

The Commission's findings of fact are subject to the 

judicial standard of review set forth in f; 2-4-704 (2), MCA, 

which states in relevant part: 

The court may not substitute its judgment for that of the agency as to the 

weight of the evidence on questions of 

fact. The court may affirm the decision 

of the aqency or remand the case for 

further proceedings. - The court may 

reverse or modify the decision if -- substantialriahts -- of the a~~ellant have 

been prejud<ced because tcg administra- 
tive findings, i-nferences, conclusions, 

or decisions P are: 

(dl affected by other error - of - law; 

(e) clearly erroneous in view of the 

reliable, probative, and substantial 

evidence on the whole record; [Emphasis 

added. 1 

Findings of fact by an administrative agency are subject to the "clearly erroneous" standard of review. However, 

conclusions of law are subject to the "abuse of discretion" 

standard of review, where the scope is broader. "These 

standards differ due to the agency's expertise regarding the 

facts involved and the court's expertise in interpreting and 

applying the law." City of Billings v. Billings Firefighters 

(Mont. 1982), 651 P.2d 627, 632, 39 St.Rep. 1844, 1849. We 

will therefore review the conclusions of law of the Human 

Rights Commission and the District Court, utilizing the 

standard of S 2-4-704 (2) (d) , MCA. 

The School District contends, as it has since the 

initial proceedings, that Johnson was screened out by the 

rating system. The District asserts that Johnson was not 

hired because his credentials were far inferior to those of 

every other applicant. Thus, the marital policy was never 

brought into effect. The School District also contends that 

the Human Rights Commission and the District Court erred by 

not applying the proper test for the allocation of the burden 

of proof. 

Johnson contends that he called Miller to request that 

his application be forwarded to Olson. Johnson asserts that 

Miller said Johnson could not be considered for the teaching 

position, because his wife was a teacher at that school, and 

his employment would be contrary to the District's policy. 
Under the second stage of the McDonnell Douglas test, 

if the plaintiff has established his prima facie case, the 

burden then shifts to the employer "to articulate some legitimate, nondiscriminatory reason for the employee's rejection." McDonnell Douglas, 411 U.S. at 802, 93 S.Ct. at 1824, 

36 L.Ed.2d at 678. The burden on the employer at this stage 

is merely one of production, not persuasion. "The defendant 

need not persuade the court that it was actually motivated by 

the proffered reasons [citation omitted]. It is sufficient 

if the defendant's evidence raises a genuine issue of fact as 

to whether it discriminated against the plaintiff." Texas 

Dept. of Community Affairs v. Burdine (1981), 450 U.S. 248, 

254-255, 101 S.Ct. 1089, 1094, 67 L.Ed.2d 207, 216 (explaining McDonnell Douglas). If the employer is able to demonstrate a legitimate, nondiscriminatory reason for not hiring 

the complainant, even though that may not have been the 

actual reason for the rejection, then the plaintiff's prima 

facie case of discrimination is rebutted. 

Under the third stage, if the plaintiff 's prima facie 

case is rebutted, he then has an opportunity to prove, by a 

preponderance of the evidence, that the legitimate reasons 

offered by the employer are only a pretext for discrimination. McDonnell Douglas, 411 U.S. at 805, 93 S.Ct. at 1826, 

36 L.Ed.2d at 679. "This burden now merges with the ultimate 

burden of persuading the court that [plaintiff] has been the 

victim of intentional discrimination." Texas Dept. of 

Community Affairs, 450 U.S. at 256, 101 S.Ct. at 1095, 67 

L.Ed.2d at 217. 

We have consistently used the McDonnell Douglas test as 

the appropriate method of proving an employment discrimination claim. European Health Spa v. Human Rights Comm'n 

(Mont. 1984), 687 P.2d 1029, 1032, 41 St.Rep. 1766, 1769; 

Martinez v. Yellowstone County Welfare Dept. (Mont.. 1981), 
626 P.2d 242, 246, 38 St.Rep. 474, 477. We note that the 

School District's policy, when based on marital status, was 

discriminatory on its face. In Thompson v. Board of Trustees, Sch. Dist., Etc. (Mont. 19811, 627 P.2d 1229, 1231, 38 

St.Rep. 706, 709, we held that $ 49-2-303 (1) (a) , MCA, is a 

"strongly worded directive from the legislature prohibiting 

employment discrimination and encouraging public employers to 

hire, promote, and dismiss employees solely on merit." 

However, Johnson never reached the protection afforded 

by 5 49-2-303(1) (a), MCA, because his qualifications never 

reached the minimum hiring standard used by the School District. The record reveals that the School District had never 

hired anyone with a three, four or five rating. Johnson's 

rating of four was based on poor college grades, supervisors' 

poor recommendations and inferior experience. He was 

under-qualified in contrast to the other applicants. Under 

the McDonnell Douglas test, Johnson needed to show that he 

was in a position to be considered for employment before he 

could invoke the protection of 5 49-2-303(1) (a). 

Johnson failed to prove that his marital status was the 

substantial factor in his rejection. On the contrary, the 

District Court stated in its order: "The school district did 

present credible evidence of a nondiscriminatory reason for 

not hiring Mr. Johnson (inferior qualifications and credentials) . . ." In addition, the Human Rights Commission found 

that Johnson had the poorest credentials of any applicant for 

the position. The record reveals that the School District's 

substantial and motivating factor in LTohnson's rejection was 

his rating of "four," and not his marital status. As the 

School Superintendent testified: "[Johnsonl was screened out. 

by his rating before you would even consider the nepotism 

policy. Even if the policy hadn't existed, obviously he 

would have been screened out." Under the test of 
McDonnell Douglas, the key element of a plaintiff's prima 

facie case is his qualifications for the job. Without adequate qualifications, the analysis ends. The bare fact that 

Johnson had a teaching degree and certificate is not enough 

to automatically place him in the pool of acceptable applicants, under the criteria established by the School District. 

Other factors, such as grades and recommendations, played a 

large role in determining the qualifications of an applicant. 

The Rozeman School District set a qualification standard 

which Johnson failed to reach. Johnson has failed to establish the "qualified" element of his prima facie case, thereby 

precluding the need for the School District to rebut his 

evidence. 

If, arguendo, Johnson had established his prima facie 

case, the School District in stage two of the McDonne11 

Douglas test produced enough evidence to raise a genuine 

issue of fact; thereby rebutting Johnson's prima facie case 

of discri..mination, and carrying the analysis to the third 

stage of the test. At the third stage, Johnson must prove, 

by a preponderance of the evidence, that the reasons offered 

by the School District for his rejection are merely a pretext 

for discrimination. However, Johnson's claim also fails at 

this stage because the District Court's order, in discussing 

Johnson's rejection, stated: "this was not a mere pretext 

for hiring someone else." 

We cannot allow Johnson's marital status to secure what 

his qualifications could not. As we held in Snell, 198 Mont. 

at 69, 643 P.2d at 848, "this Court has a responsibility to 

the employer as well as to the employee. Part of that responsibility consists in requiring adequate credible evidence 

of discrimination before subjecting an employer to the penalties associated. with a finding of discrimination." 
We hold that McDonnell Douglas defines the appropriate 

test in this case. However, both the Human Rights Commission 

and the District Court failed to apply the McDonnell Douglas 

test to the facts. Both failed to cite McDonnell Douglas in 

their orders. Therefore, their conclusions that Dallas 

Johnson was discriminated against, on the basis of marital 

status, is an error of law. Under the standard of review of 

S 2-4-704(2)(d), MCA, we reverse on this issue, which renders 

the remaining issues moot. 

We concur: 
Thus, the parties have framed the question: "Which 

factor was primary in the rejection of Johnson's application 

--his rating or his marital status?" Before we can determine 

whether the ultimate conclusion of the Human Rights Commission is an error of law, we will first address the proper 

allocation of proof and the evidentiary burden placed upon 

the respective parties in an employment discrimination case. 

We have held that reference to federal case law is both 

appropriate and helpful in employment discrimination cases 

filed under the Montana Human Rights Act, Title 49, MCA, 

because they closely parallel those of Title VII of the 

Federal Civil Rights Act of 1964, 42 U.S.C. 5 2000 et seq. 

Snell v. Montana-Dakota Utilities Co. (1982), 198 Mont. 56, 

62, 643 P.2d 841, 844. 

In order to aid plaintiffs in proving their claims of 

employment discrimination, the United States Supreme Court 

articulated a three-stage test, which employs shifting burdens of proof. McDonnell Douglas Corp. v. Green (1973) , 411 

U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (employer rejected 

the re-employment application of a black civil rights 

activist). 

Under the first stage of the McDonnell Douglas test, 

the plaintiff bears the burden of establishing a prima facie 

case of discrimination. He must show the following: 

(1) that he is a member of a protected class; 

(2) that he applied for and was qualified for the job; 

(3) that despite his qualifications he was rejected; 

and 

(4) that, after his rejection, the position remained 

open and the employer continued to seek applications from 

persons of the complainant's qualifications. 

This prima facie case creates a rebuttable presumption 

of discrimination.