No. 89-539 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1990 

VIRGINIA WARD, d/b/a YOUR GOOD LOOKS, 

Petitioner and Respondent, 

v. 

JANELLE JOHNSON and 

THE BOARD OF LABOR APPEALS, 

Respondents and Appellants. "fi r4&rq 

APPEAL FROM: District Court of the Sixth Judicial District, 

In and for the County of Park, 

The Honorable Byron L. Robb, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Eula Compton, Bozeman, Montana (Johnson) 

William E. OILeary, Helena, Montana (Board of 

Labor Appeals) 

For Respondent: 

William F. Frazier; Swandal & Douglas, Livingston, 

Montana 

Filed: 

Submitted on Briefs: March 15, 1990 

Decided: April 10, 1990 

0 
Justice John Conway Harrison delivered the Opinion of the Court. 

This case presents an appeal from a decision of the Sixth 

Judicial District, Park County, Montana, wherein the District Court 

reversed a Board of Labor Appeals' decision that affirmed 

appellant's award of unemployment benefits. We reverse the 

District Court and affirm the Board of Labor Appeals' decision. 

The sole issue on appeal is whether the District Court erred 

in finding that the Board of Labor Appeals' decision was not based 

on substantial evidence. 

On September 2, 1987, Virginia Ward, owner of Your Good Looks 

clothing store, fired Janelle Johnson, who had worked as a store 

clerk for nearly five years. On her application for unemployment 

benefits, Johnson alleged that Ward fired her when Ward learned 

that Johnson had sold her car to someone who had offered her more 

money than Ward or Ward's brother. Ward responded by alleging that 

she had fired Johnson because of employee misconduct and listed 

seven reasons justifying Johnson's termination. Briefly, the 

reasons given were: 

1. Tardiness. 

2. Untidiness. 

3. Working crossword puzzles at work (this reason was 

apparently dropped at the hearing). 

4. Taking cash out of the till. 

5. Leaving the store unattended. 

6. Personal'phone calls made on the business phone. 

7. Charging clothing after being told not to charge. 

2 
Initially, Johnson was denied unemployment benefits. 

Johnson filed for a redetermination on October 23, 1987. In 

her redetermination statement she responded to Ward's stated 

reasons for terminating her. As to each of Ward's allegations, 

Johnson explained how her actions were justified, either through 

express permission by Ward or by circumstances requiring Johnson 

to leave the store unattended at times. Ward also filed a 

statement. On November 3, 1987, the Department of Labor reversed 

the denial of benefits and found that Johnson's alleged misconduct 

did not amount to an intentional breach of her obligation to her 

employer, Ward. 

Ward appealed the redetermination and a hearings referee 

conducted a telephone hearing on November 30, 1987. After 

receiving testimony from Ward, Johnson and several witnesses, the 

hearings referee determined that Ward fired Johnson for reasons 

other than misconduct, as misconduct is defined in unemployment 

law. The referee found that Johnson's alleged misconduct was 

explained by agreements she had with Ward. Also since Johnson 

generally operated the store alone, she necessarily had to leave 

the store unattended for short periods of time to get proper 

change, or to get lunch. Further, the referee found that 'I [t] he 

timing of the discharge may have been influenced by the automobile 

transaction." 

Ward appealed the referee's decision to the Board of Labor 

Appeals. After the Board reviewed the record and heard sworn 

testimony from Ward, it ruled that it found no substantial evidence 
to warrant modification or reversal of the referee's decision. 

Further, the Board adopted the Findings of Fact and Decision of the 

appeals referee. . Thereafter, Ward appealed the Board of Labor 

Appeals decision to the District Court which reversed and vacated 

the Board's decision. Essentially Ward had challenged the appeals 

referee's findings and decision. This appeal followed. 

In its opinion the District Court acknowledged that the 

findings of the Board (or appeals referee) are conclusive if 

supported by substantial evidence. However, the District Court 

found the referee's findings to be unsupported by substantial 

evidence and entered its own findings which were contrary to or 

inconsistent with the referee's findings. Appellant argues that 

substantial evidence supported the Board and referee's decision 

and that the District Court erred in concluding otherwise. We 

agree. 

Montana law limits the scope of judicial review of a Board of 

Labor Appeals1 decision. Section 39-51-2410(5), MCA, provides in 

pertinent part: 

In any judicial proceeding under 5 39-51-2406 

through 39-51-2410, the findings of the board 

as to facts, if supported by evidence and in 

absence of fraud, shall be conclusive and the 

jurisdiction of said court shall be confined 

to questions of law. 

Further, in reference to § 39-51-2410 (5) , MCA, this Court has 

held that 

:'[s]upported by the evidence" means supported 

by substantial evidence, which is ''something 

more than a scintilla of evidence, but may be 

less than a preponderance of evidence. " 

(Citations omitted. ) 
Johnson v. Montana Dept. of Labor & Industry (Mont. 1989) , 783 P. 2d 

As well, this Court has stated the following regarding 

application of 5 39-51-2410(5), MCA: 

The court is not permitted to balance 

conflicting evidence in support of and in 

opposition to the Commission's findings of 

fact, nor to determine which is the more 

substantial evidence, nor to consider where 

the preponderance of evidence lies; for to do 

so would be to substitute the Court's view of 

the evidence for that of the Commission, and 

effectively nullify the conclusive character 

of the Commissionls findings of fact as 

provided by statute. 

Connolly v. Montana Bd. of Labor Appeals (1987), 226 Mont. 201, 

205, 734 P.2d 1211, 1214, quoting Noone v. Reeder (1968), 151 Mont. 

248, 252, 411 P. 2d 309, 312. Thus, the reviewing court must decide 

whether substantial evidence supports the Board's decision and not 

whether on the same evidence it would have arrived at the same 

conclusion. 

We have reviewed the record and find that while the 

conflicting evidence is susceptible of more than one 

interpretation, substantial evidence exists to support the 

referee's findings and decision. The record contains Johnson's 

explanations of her alleged misconduct. Further, Ward testified 

that although she had warned Johnson, she had never informed 

Johnson that she would be terminated if the alleged misconduct 

continued. Ward also testified that Johnson's poor performance had 

been occurring for a year and one half prior to her termination. 

Additionally, the record establishes that Ward and her brother had 
been negotiating with Johnson to purchase Johnsonls car and that 

Ward fired Johnson the same day she learned Johnson had sold the 

car to another. 

Much of the Johnson's testimony conflicted with Ward's 

testimony. But, nothing in the record suggests that Johnson's 

testimony was inherently incredible. In short, Johnson's version 

of the termination is supported in the record and the District 

Court erred in holding otherwise. 

Respondent also argues that the appeals referee allowed into 

the record inadmissible evidence, mostly hearsay. Section 39-51- 

2407, MCA, provides in pertinent part: 

[tlhe conduct of hearings and appeals shall be 

in accordance with regulations prescribed by 

the department or the board for determining 

the rights of the parties, whether or not such 

regulations conform to common law or statutory 

rules of evidence and other technical rules or 

procedure. 

Respondent cites us no department regulations in support of her 

contention which we therefore reject. 

We reverse the District Court and reinstate the Board of Labor 

Appeals1 decision. 

We concur: 

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