No. 83-458 

IN THE SUPREMZ COURT OF THE STATE OF MONTANA 

1984 

WILLIAM SLATER and ELSE SLATER, 

d/b/a HEMINGWAYS'S RESTAURANT AND BAR, 

Plaintiffs and Respondents, 

EMPLOYMENT SECURITY DIVISION OF THE 

MONTANA DEPARTFIENT OF LABOR AND 

INDUSTRY, et al., 

Respondents and Appellants, 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Robert H. Wilson, Judge presiding. 

COUNSEL OF FECORD: 

For Appellants: 

R. Scott Currey, Dept. of Labor & Industry, 

Helena, Montana 

D. Michael Eakin, Montana Legal Services, 

Billings, Montana 

For Respondents: 

Hennessey Law Office, Billings, Montana 

Submitted on Briefs: December 8, 1983 

Decided: February 9, 1984 

6.8' jj . p.> t Filed: . , ., . 

- -- Clerk 
Mr. Justice L.C. Gulbrandson delivered the Opinion of the 

Court. 

Defendant Freddee Wessell appeals from the judgment of 

the District Court of the Thirteenth Judicial District, 

Yellowstone County, disqualifying her from receipt of 

unemployment benefits by reason of misconduct. (The 

Employment Security Division ceased to exist in September, 

1981 and the proper state agencies in this action are the 

Department and the Board of Labor Appeals. Although the 

Department must be deemed a party in any action involving an 

appeal to district court of a Board of Labor Appeals 

administrative decision, see Section 39-52-2410, MCA, 

neither the Department nor the Board took an interest or 

actively participated in the appeal in this case.) For the 

reasons stated below, we reverse the judgment of the 

District Court. 

Freddee Wessell was employed by Hemingway's Restaurant 

and Bar as a cocktail waitress for approximately five months 

prior to the end of July, 1982. William Slater is the owner 

of Hemingway's and his wife, Else, works as the floor 

manager. During Wessell's five months on the job, the 

Slaters had expressed some dissatisfaction with her job 

performance, particularly her occasional use of foul 

language in the presence of customers and her alleged 

proclivity for drinking while on the job. She was 

reprimanded in May of 1982 for these indiscretions. The 

parties disagree over whether she received similar 

reprimands for like behavior between May and July. 

On July 20, a slight argument ensued between Else 

Slater and Wessell concerning the appropriateness of 
punching in and out on the time clock during Wessell's 

workshift. FJessell apparantly told two of the bartenders 

that she was dissatisfied with her work and intended to 

quit. The bartenders relayed this information to Else, who 

in turn brought the matter to the attention of William 

Slater. Notice of intent to quit normally would be relayed 

directly to the floor manager by an employee. Nevertheless, 

William and Else decided to replace Wessell and either hire 

a new waitress or use a current employee to cover Wessell's 

next scheduled shift. 

Wessell returned to work her next regularly scheduled 

shift July 20. When she arrived, she saw that a fellow 

employee was already covering for her. Else was not present 

to discuss the matter, so Wessell went directly to the 

executive chef, Bill Gleason. She asked Gleason whether she 

had been fired. He informed her that he did not know. A 

brief discussion then took place, during which Wessell 

indicated that she really didn't care if she was scheduled 

for work or not. Gleason suggested that her attitude was 

poor. At this point, Gleason maintains that Wessell used a 

four-letter word. He then told her that "you should just go 

home then. You just figure you are done, go home." 

However, he never told her that she was fired. Wessell left 

the premises and did not return, assuming that she no longer 

had a job at Hemingway's. 

Wessell filed for unemployment benefits in early 

August. William Slater responded to notice of her 

application, alleging that she had been terminated for 

misconduct. Misconduct is a sufficient ground for 

disqualification from receipt of benefits. Section 
39-51-2303, MCA. A claims examiner for the Department of 

Labor and Industry determined that there was no evidence of 

misconduct, and approved the application. Slatter appealed 

the decision. A hearing was held before a Department 

appeals referee on September 23, 1982. The Slaters, Gleason 

and Wessell testified at that time concerning the 

allegations of misconduct. The referee concluded that 

Wessell had been terminated for reasons other than 

misconduct, and affirmed the award of benefits. 

A further appeal was taken to the Board of Labor 

Appeals. Following a hearing, the Board affirmed the 

findings, conclusions and decision of the referee. The 

Slaters appealed the Board decision to District Court 

pursuant to Section 39-51-2410, MCA, arguing that the Board 

decision was not supported by the evidence. After reviewing 

the transcript of proceedings before the referee and the 

Board, and considering briefs submitted by the parties, the 

District Court concluded that Wessell had been fired for 

misconduct, and disqualified her from receiving benefits. 

Wessell appeals from the District Court's judgment. 

The only issue presented in this appeal is whether 

substantial evidence exists to support the decision of the 

Board awarding unemployment benefits to Wessell, such that 

the judgment of the District Court should be reversed. The 

relevant standard of review is set forth in Section 

39-51-2410(5), MCA: "In any judicial proceeding under 

39-51-2406 through 39-51-2410, the findings of the board as 

to the facts, if supported by evidence and in the absence of 

fraud, shall be conclusive and the jurisdiction of said 

court shall be confined to questions of law." The Montana 
Administrative Procedure Act elaborates on the standard of 

judicial review: 

"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 agency or remand the case for 

further proceedings. The court may 

---------------- reverse or modif1 ---------------- the decision if 

substantial rights of the appellant have 

-------- been prejudiced ------------------ because the 

..................... 

administrative findines, --- inferences, 

conclusions, or decisions are: 

(a) in violation of constitutional or 

statutory provisions; 

(b) in excess of the statutory 

authority of the agency; 

(c) made upon unlawful procedure; 

(d) affected by - other error of law; 

(e) clearly erroneous in view of the 

......................... 

reliable, probative, and substantial 

evidence on the whole record: 

(f) arbitrary or capricious or 

characterized by abuse of discretion or 

clearly unwarranted exercise of 

discretion; or 

(g) because findings of fact, upon 

issues essential to the decision, were 

not made although requested." 

Section 2-4-704(2), MCA (emphasis added). See also Kirby 

Co. of Bozeman, Inc. v. Employment Sec. Div. (Mont. 1980), 

The Slaters maintain that Wessell was fired on July 

20, 1982, when the chef told her to leave, supposedly 

because of her "bad attitude" and use of a four-letter word 

in the presence of a superior. Wessell insists that the 

decision to discharge her was made July 17, following her 

remarks to the bartenders about her intention to quit, and 

that misconduct could not be the basis for her termination. 

Although she concedes that her attitude about her 

employment, as expressed to the chef, was bad, she denies 

using a four-letter word in the chef's presence. 

The testimony of the parties before the referee and 
the Board was conflicting at times, and answers by the 

parties and witnesses to questions were sometimes equivocal. 

Nevertheless, we find substantial, credible evidence to 

support the Board's determination that Wessell was 

discharged for reasons other than misconduct. 

The record reveals that Wessell notified the 

bartenders of her intention to quit. Although this did not 

constitute the usual notice to leave, the employers treated 

it as such and decided to hire a new waitress or assign a 

current employee to fill Wessell's shift. When Wessell next 

returned to work and found another waitress working her 

shift, she approached the chef, Bill Gleason. Gleason 

appeared to have some knowledge of the events before and 

after Wessell's argument with Else Slater. His testimony 

suggests that the employee covering Wessell 's shift was 

there to replace her and that Wessell's employment would 

officially terminate at the end of a week, her "notice" to 

the bartenders having been treated as a week's notice. 

Gleason explained that he never specifically told Wessell 

that she was fired. Although the chef had authority to 

discharge employees, his testimony indicates that he had not 

received instructions concerning Wessell's termination. 

Considering the statements in the record as a whole, and 

according due respect to any decisions made by the referee 

and the Board concerning the weight of witness testimony and 

credibility of the witnesses, we cannot say that the 

ultimate decision of the Board was clearly erroneous. 

The District Court's determination that Wessell was 

fired by the chef for misconduct can be supported only by 

selective treatment of certain aspects of the record. 
Reaching that decision also required the court to weigh or 

interpret critical witness testimony and credibility 

differently than did the referee and the Board. Wessell 

admittedly may not be the ideal employee, but the referee 

and the Board concluded that the evidence, considered in its 

entirety, did not compel a conclusion that her discharge 

resulted from misconduct. Because the decision of the 

referee and the Board is based on a fair interpretation of 

the record, it should not be overturned. 

The judgment of the District Court is reversed. The 

decision of the Board of Labor 

\ 

/ 

Justice / 

We concur: 

%48.rN, ,o4 Chief Justice