DA 06-0256

IN THE SUPREME COURT OF THE STATE OF MONTANA

2008 MT 189

REBEKAH KLEIN,

 Plaintiff and Appellant,

 v.

THE STATE OF MONTANA, by and through its 

MONTANA DEPARTMENT OF CORRECTIONS,

 Defendant and Appellee.

APPEAL FROM: District Court of the First Judicial District,

In and For the County of Lewis and Clark, Cause No. BDV-2005-010

Honorable Jeffrey M. Sherlock, Presiding Judge

COUNSEL OF RECORD:

For Appellant:

Tom W. Stonecipher (argued), Bridget White leFeber, Tarlow Stonecipher

& Steele, PLLC, Bozeman, Montana

For Appellee:

Michael Richard King (argued), Special Assistant Attorney General,

Helena, Montana

For Amicus MEA-MFT, Montana Trial Lawyers Association, Montana

AFL-CIO, Teamsters Union, Local 190, AFSME Montana State Council No. 9,

Montana Nurses Association, Montana Public Employees Association,

International Union of Operating Engineers, Local 400, International Brotherhood

of Electrical Workers, Local 233:

Karl J. Englund, Karl J. Englund, P.C., Missoula Montana

Stephen C. Bullock, Bullock Law Firm, Helena, Montana

For Amicus Montana Defense Trial Lawyers Association:

Jeff M. Hindoien, Gough, Shanahan, Johnson & Waterman,

Helena, Montana 

May 29 2008
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For Amicus Montana League of Cities and Towns and Montana

Association of Counties:

Oliver H. Goe, Chad E. Adams, Browning, Kaleczyc, Berry

& Hoven, P.C., Helena, Montana

Argued: April 4, 2007

Submitted: April 17, 2007

Decided: May 29, 2008 

Filed:

__________________________________________

Clerk
3

Justice Patricia O. Cotter delivered the Opinion of the Court.

¶1 Appellant Rebekah Klein (Klein) appeals a grant of summary judgment in favor of 

the state of Montana, by and through its Montana Department of Corrections (DOC) in 

the First Judicial District Court, Lewis and Clark County. We affirm in part, reverse in 

part and remand for further proceedings consistent with this Opinion. 

FACTUAL AND PROCEDURAL BACKGROUND

¶2 Klein is a member of the Montana Federation of Probation and Parole, Local No. 

4464 (Union), and a probation and parole officer with the DOC in Bozeman, Montana. 

Klein signed a collective bargaining agreement (CBA) with the DOC prior to her 

employment. In its preamble, the CBA describes itself as “a basic and complete 

agreement between the parties concerning terms and conditions of employment which are 

not otherwise mandated by statute.” As such the CBA covers a wide range of issues 

pertaining to employment with the DOC, including a grievance procedure involving the 

use of arbitration for resolving disputes between the DOC and Union members.

¶3 On April 14, 2003, Klein was suspended with pay from her position due to

allegations she had revealed confidential information about an on-going investigation of a 

Bozeman police officer to the police officer who was himself the target of the 

investigation. On April 17, 2003, Klein and a Union representative met with a human 

resource officer and criminal investigator from the DOC to discuss the matter. Klein 

alleges that DOC officials misrepresented to her the nature of this meeting, stating it was 

merely to discuss a “personnel matter” and that information divulged in the meeting 

would not be used in a criminal investigation against her. However, Klein alleges that 
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DOC officials turned over information gleaned from the meeting to the Gallatin County 

Attorney, who then unsuccessfully attempted to prosecute Klein for official misconduct. 

According to Klein, during this meeting DOC officials never provided Klein with any 

warnings, or indicated they intended to use this information to bring a criminal 

prosecution against her.

¶4 On May 7, 2003, after conducting an investigation into Klein’s alleged 

misconduct, officials from the DOC held a hearing on the matter. Prior to this hearing, 

DOC officials informed the Bozeman Daily Chronicle that an investigation had been 

conducted concerning an adult probation officer on leave with the DOC, and that the 

results of that investigation would be turned over to the Gallatin County Attorney. The 

Chronicle in turn reported this information. According to Klein, she and her Union

representatives requested a copy of the investigative report prior to the hearing, but their 

requests were initially denied. They were later given copies of this report at the May 7 

hearing.

¶5 On May 27, 2003, the DOC informed Klein by letter that her employment with the 

DOC was terminated. Among the stated reasons for the discharge was the existence of 

substantial evidence, based on the hearing and related investigation, that Klein had 

obstructed and interfered with the investigation of the Bozeman police officer. On June 

3, 2003, Klein filed a grievance with the DOC, stating that she was fired without just 

cause and seeking to be made whole by receiving her former position, back pay and 

benefits. Her grievance was arbitrated, with a decision in her favor handed down on May 

12, 2005. The arbitrator found that Klein was not fired for just cause and directed DOC 
5

to reinstate her and take appropriate measures to make her whole for the losses she had 

occasioned.

¶6 Prior to the entry of the arbitrator’s final decision, Klein filed suit against the DOC 

on January 6, 2005, in Lewis and Clark County District Court. Her Complaint against 

DOC contained four separate counts. Count I claimed a violation of due process, while 

Counts II through IV sounded in tort. The State moved for summary judgment on all 

four counts. The District Court held oral argument on January 26, 2006, ultimately 

granting the State’s motion and dismissing Klein’s suit. The District Court concluded 

that the terms of the CBA and the authority set forth in Small v. McRae, 200 Mont. 497, 

651 P.2d 982 (1982), McKay v. State of Mont. Bd. of Regents, 2003 MT 274, 317 Mont. 

467, 79 P.3d 236, and Buckhorn v. St. Jude Heritage Medical Group, 18 Cal. Rptr. 3d 

215 (Cal. App. 4 Dist. 2004), required that Klein exhaust her remedies through

arbitration, and prohibited her from litigating her dispute with the DOC because she had 

failed to exhaust those remedies. As stated in the District Court’s order:

The language of the collective bargaining agreement states that it is 

the intent of the agreement to set forth [a] “complete agreement between 

the parties concerning terms and conditions of employment which are not 

otherwise mandated by statute.” Further, the parties agree that they will 

arbitrate “all disputes arising between them involving questions of 

interpretation or application of the provisions of this agreement.” In the 

view of this Court, the combination of the just quoted provisions of the 

collective bargaining agreement dictate that these particular causes of 

action currently filed by Klein against the State must be arbitrated. The 

collective bargaining agreement indicates that it is setting forth a complete 

agreement between the parties concerning the terms and conditions of 

employment.

. . . .

In light of the discretion this Court has been given to resolve any 

doubt in favor of arbitration, this Court must hold that the State’s motion 
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should be granted. Klein has failed to exhaust her collective bargaining 

grievance procedures. As such, she cannot be allowed to sidestep those 

procedures and bring this action.

¶7 Klein appeals this grant of summary judgment. She asserts the District Court

erred in concluding that the terms of the CBA applied to her claims and required her to 

grieve the claims and exhaust her remedies under the CBA. Klein maintains the terms of 

the CBA are unambiguous and allow her to litigate her claims in District Court. She asks

this Court to reverse the grant of summary judgment and reinstate those claims. The 

State opposes Klein and urges us to affirm the District Court. The State contends all the 

facts furnishing a basis for her Complaint arose from the DOC’s investigation and 

resulting discharge, and were adequately covered by the grievance process provided for 

in the CBA. The State argues Klein pursued her grievance through the appropriate 

process, obtained reinstatement with back pay and benefits, and “cannot now completely 

sidestep the process which produced those results and sue in district court for more 

money.” Klein’s appeal before this Court is timely. 

ISSUES

¶8 We state the sole issue on appeal as follows: Did the District Court err in 

concluding the CBA prevented Klein from litigating her claims in District Court?

STANDARD OF REVIEW

¶9 We review grants of summary judgment de novo using the same criteria as the 

district court under M. R. Civ. P. 56. Hogenson Const. of N.D. v. Mont. State Fund, 2007 

MT 267, ¶ 11, 339 Mont. 389, ¶ 11, 170 P.3d 471, ¶ 11. In reviewing the district court’s 
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decision, “[w]e must determine whether the district court correctly applied the law.” 

Hogenson, ¶ 11.

DISCUSSION

¶10 Our main task in resolving the current appeal is to determine whether the District 

Court correctly concluded that the CBA covered all four counts in Klein’s Complaint, 

thus requiring her to exhaust her remedies through mechanisms provided in the CBA.

Resolving this question involves a consideration of both the terms of the CBA, and the 

specific allegations in Klein’s Complaint. 

¶11 Generally speaking, grievance procedures provided for in a collective bargaining 

agreement must be exhausted in the course of resolving disputes between employers and 

employees. Mackay, ¶ 24. There is a well-established policy in favor of resolving labor 

disputes under the terms of a collective bargaining agreement when such an agreement is 

present. Small, 200 Mont. at 503-04, 651 P.2d at 986; Mackay, ¶ 25. However, there is a 

narrow exception to this general principle. “Only in those cases where it is certain that 

the arbitration clause contained in a collective bargaining agreement is not susceptible to 

an interpretation that covers the dispute is an employee entitled to sidestep the provisions 

of the collective bargaining agreement.” Small, 200 Mont. at 504, 651 P.2d at 986. 

Moreover, collective bargaining agreements do not always preclude employees covered 

under their terms from pursuing independent causes of action. See Hines v. Anchor 

Motor Freight, Inc., 424 U.S. 554, 571, 96 S. Ct. 1048, 1059-60 (1976) (finding 

employee may pursue an independent cause of action in spite of finality of arbitration 

decision when employee alleged union representation was dishonest, in bad faith, or 
8

discriminatory); Wright v. Universal Maritime Serv. Corp., 525 U.S. 70, 81-82, 119 

S. Ct. 391, 397 (1998) (holding that a collective bargaining agreement did not prevent 

employee from bringing suit against employer under the Americans with Disabilities Act

of 1990); Miller v. Co. of Glacier, Montana, 257 Mont. 422, 427-28, 851 P.2d 401, 404

(1993) (holding that whether a collective bargaining agreement precludes employee from 

bringing a claim under 42 U.S.C. § 1983 dependent upon the provisions of the agreement 

itself).

¶12 We first turn to the allegations set forth in Klein’s District Court Complaint.

Count I alleges DOC officials violated Klein’s due process rights under Article II, 

Section 17 of the Montana Constitution and Fourteenth Amendment to the United States 

Constitution by compelling her to testify against herself during the investigations prior to 

her discharge, and thus destroying her ability to continue to pursue a career in law 

enforcement. Count II complains that DOC officials committed the tort of deceit by 

willfully misrepresenting the purpose of their meeting with her on April 17, 2003. Klein 

alleges the DOC misrepresented the meeting as a personnel matter “with the intent to 

induce Ms. Klein to make statements which would be turned over to the Gallatin County 

Attorney’s office for purposes of instituting criminal charges against Ms. Klein.” Count 

III alleges the DOC negligently investigated this incident, and breached its duty to Klein 

to reasonably conduct its investigation of her by failing to interview key witnesses prior 

to discharging her. Finally, Count IV alleges that, as a result the DOC’s actions 

throughout this affair, she has “suffered and continues to suffer, severe emotional 
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distress” and that this distress was a “reasonably foreseeable consequence of the [DOC’s] 

negligent acts and omissions.” 

¶13 Next we turn to the CBA itself. It contains a Preamble and twenty-seven articles, 

of which only the Preamble, Article 17, titled “Grievances and Arbitration,” and Article 

18, titled “Employee Rights,” are relevant to the current appeal. The Preamble, as cited 

to by the District Court, describes the CBA as a “basic and complete agreement between 

the parties concerning terms and conditions of employment which are not otherwise 

mandated by statute.” Article 17 describes arbitration and grievance procedures. Article 

17, Section 1 of the CBA states as follows:

Having a desire to create and maintain harmonious labor relations, 

the parties hereto agree that they will promptly attempt to adjust all 

disputes arising between them involving questions of interpretation or 

application of the terms and provisions of this Agreement.

¶14 Article 17, Section 3D states as follows:

When the grievance is presented in writing there shall be set forth all 

of the following:

1. A complete statement of the grievance and facts upon which it is 

based.

2. The rights of the individual claimed to have been violated and the 

remedy or correction requested.

Article 17, Section 3E, titled “Rules of Grievance Processing,” then states the following: 

“Employees desiring to contest an employment action through alternative statutory or 

civil procedures may not contest the same employment action under the provisions of this 

Agreement’s grievance procedure.” 
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¶15 The rights referred to in (2) of Article 17, Section 3D are found in Article 18, titled 

“Employee Rights.” Klein’s grievance alleged that that the DOC violated Section 1 and 

Section 11 in her termination. Those portions read as follows:

Section 1. No permanent employee shall be disciplined or 

discharged except for just cause.

. . . .

Section 11. An employee charged by a client with improper 

behavior or with violating an agency rule or policy shall be deemed 

innocent until such time as sufficient evidence to the contrary has been

presented. Any disciplinary action based on a client complaint may be 

applied through the grievance procedure. 

¶16 The State contends that the terms of the CBA cover the counts in Klein’s 

Complaint, and that she was required to resolve all her claims through the grievance 

process as provided under the CBA. The State claims that Klein “either raised or should 

have raised all of her employment claims during the grievance process she chose to 

pursue.” In support of its argument, the State makes five major points. First, it points out 

that under Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S. Ct. 614 (1965), the CBA 

provides Klein with an exclusive remedy for her employment claims unless and to the 

extent it provides otherwise. Second, the State argues the language in the Preamble 

shows that the only employment matters not covered by its terms are statutory mandates. 

In this case, because no statutory mandates are operative, the CBA controls. Third, the 

State asserts that because Article 17, Section 1 covers “all disputes . . . involving 

questions of interpretation or application of the terms and provisions of this Agreement”

this phrase should be broadly interpreted under United Steel Workers of Am. v. Am. Mfg. 

Co., 363 U.S. 564, 80 S. Ct. 1343 (1960), to include the disputes contained in Klein’s 
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Complaint. The State, urging us to adopt the reasoning used by the District Court, argues 

that the CBA does not need to set forth every possible cause of action in order for such 

actions to be subject to arbitration. This, along with the well-established presumption in 

favor of exhausting remedies provided under collective bargaining agreements, including 

arbitration, as announced in United Steelworkers of Am. v. Warrior & Gulf Navigation 

Co., 363 U.S. 574, 80 S. Ct. 1347 (1960), demonstrates that the counts alleged by Klein 

in District Court were covered by the CBA. As further support, the State cites to 

Buckhorn, Vianna v. Doctors’s Management Co., 33 Cal. Rptr. 2d 188 (Cal. App. 1 Dist. 

1994), and Writers Guild of Am., West, Inc. v. Merrick, 181 Cal. Rptr. 530 (Cal. App. 

Dist. 2 1982), among others, which, the State claims, are cases where employment 

agreements nearly identical to the CBA here were construed to bar torts similar to the 

ones Klein advances.

¶17 Fourth, the State argues Klein could have sought other damages in her grievance 

but because she failed to do so, she waived her right to pursue those claims further. The 

CBA “does not exclude any remedy of relief . . . from its grievance process, nor does it 

provide that relief available for a discharge without just cause is limited to back 

pay/benefits and reinstatement.” According to the State, in pursuing the grievance 

process ultimately leading to her reinstatement and receipt of back pay, Klein “invoked 

her full panoply of rights under her CBA’s grievance process and then pursued that 

process to a final and binding conclusion.” Fifth, the State argues that the term “just 

cause” as used in the CBA should be broadly construed to cover those considerations of 

due process upon which Klein bases her Complaint. The State argues that the issue of 
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whether Klein was fired for just cause “includes considerations of procedural due process 

even if there is no explicit due process provision in the contract.” In re Pan American 

Corp, 140 B.R. 336, 340 (S.D.N.Y. 1992). As a result, any alleged due process 

violations were remedied in the grievance procedure when the arbitrator found Klein was 

not fired for just cause, and decreed an award in her favor.

¶18 Klein argues the CBA does not cover the counts alleged in her Complaint, and that 

the District Court erred in granting summary judgment to the State. Klein maintains

nothing in the Preamble, or the CBA itself, covers the types of state law claims she raised 

in District Court. She argues that Article 17 of the CBA, where it states that the parties 

agree to adjust “all disputes arising between them involving questions of interpretation or 

application of the provisions of this Agreement,” is simply limited to disputes concerning 

the interpretation and application of actual provisions of the CBA, and does not cover the 

causes of action against the DOC as alleged in her Complaint. Klein argues that because 

the CBA contains no specific provisions which can be said to apply to claims of violation 

of due process or the other torts she has alleged, her claims fall outside the terms of the 

CBA and can be pursued in District Court. Klein claims her position is supported by 

Small, and Missoula Co. High Sch. Educ. Assn. v. Bd. of Trustees, 259 Mont. 438, 857 

P.2d 696 (1993).

¶19 Klein further maintains the District Court erred in its interpretation of the CBA, 

and that policy statements in favor of arbitration or exhaustion of remedies under the 

CBA should not be construed to undermine the plain language of the CBA itself. Klein, 

citing to Ratchye v. Lucas, 1998 MT 87, 288 Mont. 345, 957 P.2d 1128, asserts that an 
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arbitration provision in a collective bargaining agreement applies only to matters which 

the parties have agreed to arbitrate, and does not extend further. Additionally, Klein 

asserts Article 17, Section 3E of the CBA demonstrates that she had available to her the 

alternative to pursue her tort and due process claims through either the grievance 

procedure, or in court. In this case, Klein argues that she “only grieved and arbitrated the 

issue of whether she had been disciplined and discharged by the [DOC] for ‘just 

cause’ . . . .” Her due process and tort claims, she argues, were not pursued under the 

grievance procedures of the CBA; thus, she may elect to pursue them in District Court. 

¶20 We interpret the provisions of a collective bargaining agreement “according to the 

plain, ordinary language used by the parties.” Winchester v. Mountain Line, 1999 MT 

134, ¶ 28, 294 Mont. 517, ¶ 28, 982 P.2d 1024, ¶ 28 (quotation omitted). When 

reviewing whether a claim is covered by the terms of a collective bargaining agreement, 

the role of the court “is confined to ascertaining whether the party seeking arbitration is 

making a claim which on its face is governed by the contract.” United Steel Workers of 

Am, 363 U.S. at 568, 80 S. Ct. at 1346. If it is, then the aggrieved party must pursue and 

exhaust those remedies provided for in the collective bargaining agreement. Lueck v. 

United Parcel Serv., 258 Mont. 2, 8, 851 P.2d 1041, 1044-45 (1993).

¶21 In Winchester, for instance, we held that an employee could file suit against his 

employer for alleged unfair labor practices. Winchester, ¶ 28. In that case, our primary 

focus was on whether the terms of the collective bargaining agreement between the 

plaintiff Winchester and his employer, Mountain Line of Missoula, allowed him to bring 

a suit for unfair labor practices in state court, or required him to submit his grievance to 
14

arbitration. We held that arbitration of the claim was not required because a specific 

provision in that agreement stated that claims such as those Winchester filed in district 

court, were not subject to the grievance procedures of the agreement. Winchester, 

¶¶ 25-28.

¶22 In general, we agree with the interpretation of the CBA advanced by Klein in this 

case. In the first instance, nothing in the CBA requires that the issue of whether a 

grievance is arbitrable be first submitted to an arbitrator. The case at bar is 

distinguishable from cases like Writer’s Guild in which such clauses are inserted into 

collective bargaining agreements by the parties. In Writer’s Guild, for instance, such a 

clause reads as follows:

C. MATTERS SUBJECT TO ARBITRATION BUT NOT 

GRIEVANCE [¶]. Notwithstanding anything elsewhere contained in this 

Article 10, the following matters shall be submitted to arbitration but not 

to grievance: [¶] 1. Any dispute as to whether the arbitrator has 

jurisdiction or whether any matter is arbitrable, provided however, that 

the arbitrator may not order an arbitration of any matter not arbitrable as 

provided above . . . .

Writer’s Guild, 181 Cal. Rptr. at 533 (emphasis added).

¶23 There is no comparable clause in the CBA before the Court now. Accordingly, the 

dispositive question is simply whether the counts in Klein’s Complaint concern the 

“interpretation or application of the terms and provisions of” the CBA. If they do, then 

Klein should have submitted them to arbitration. If they do not, then Klein is not 

compelled to pursue those causes under the terms of the CBA. 

¶24 We agree with Klein that she was not required to pursue her claims for the tort of 

deceit (Count II), or the tort of negligent infliction of emotional distress (Count IV)
15

through arbitration per the CBA. Before the arbitrator, Klein challenged whether or not 

she was fired for just cause. We cannot say this claim encompasses the tort of willful 

deceit arising out of DOC’s alleged misrepresentations made in connection with 

facilitating criminal proceedings against Klein, or the negligent infliction of emotional 

distress in connection with DOC’s conduct as alleged in Klein’s Complaint; nor has the 

State shown that it does. More importantly, however, we cannot say that the scope of the 

arbitration clause can be construed to cover these claims, thus requiring them to be 

submitted to arbitration. While expressing no view on the merit of these two claims, we 

reverse the District Court’s grant of summary judgment as to Counts II and IV and hold 

that they must be reinstated before the District Court. However, we caution that Klein’s 

claims for negligent infliction of emotional distress may only be premised upon DOC’s 

alleged conduct in misrepresenting the nature of the April 17, 2003 interview and turning 

information gleaned from this interview to the Gallatin County Attorney for prosecution.

¶25 Our conclusion in this regard is supported by Croom v. City of DeKalb, 389 

N.E.2d 647 (Ill. App. 2 Dist 1979). In Croom, there was a dispute as to whether 

firefighters who were assigned duties as acting officers were entitled to additional pay. 

The firefighters sought to compel arbitration on the issue, but their employer, the City of 

Dekalb, resisted these efforts. The provision of the agreement at issue in that case read as 

follows: “In the event that the Union Committee and the aggrieved are dissatisfied with 

the City Manager’s decision and said grievance involves the interpretation or application 

of the express provisions of this Agreement, the Union may refer the matter to Arbitration 

. . . .” Croom, 389 N.E.2d at 648 (emphasis added). The Illinois court sided with the 
16

city finding that arbitration was not required because there were no express provisions in 

the agreement which covered the issue of additional pay for firefighters who performed 

the duties of acting officers. Croom, 389 N.E.2d at 652. The Appellate Court of Illinois, 

reviewing this result in Jupiter Mechanical Indust. Inc. v. Sprinkler Fitters and 

Apprentices Local Union No. 281, 666 N.E.2d 781 (Ill. App. 1 Dist. 1996), characterized 

it as follows: 

There was no express provision in the Agreement covering 

additional pay for firefighters assigned to duties as acting officers. For that 

reason the court held the arbitration clause did not cover the dispute. In 

Croom, the contract established a broad grievance procedure and a narrow 

scope of arbitration.

Jupiter, 666 N.E.2d at 784.

¶26 Here, as in Croom, the scope of arbitration is limited to “questions of 

interpretation or application of the terms and provisions of” the CBA. None of the terms 

or provisions of the CBA even remotely touch upon the torts of deceit and resulting 

negligent infliction emotional distress as alleged in Klein’s Complaint. Indeed, the 

alleged actions of the DOC are far afield of any employment action and have nothing to 

do with the any of the rights, terms, or provisions enumerated in the CBA.

¶27 The Dissent suggests that our Opinion gives “mere lip service to the basic concept 

that Klein is required to exhaust all of her remedies by use of the grievance procedure.” 

(Dissent, ¶ 46). To the contrary, our Opinion affirms the notion that collective bargaining 

agreements should be interpreted according their terms, and not in a manner beyond what 

the parties have actually agreed to and bargained for. As stated recently by the California 

Court of Appeals,
17

As the secondary authorities which analyze many of the cases 

[which discuss the scope of arbitration clauses] strongly suggest, the 

decision as to whether a contractual arbitration clause covers a particular 

dispute rests substantially on whether the clause in question is “broad” or 

“narrow.” (See Knight et al., Cal. Practice Guide, Alternative Dispute 

Resolution (The Rutter Group 2005) ¶ 5:215.3; see generally id. at ¶¶ 5:8 & 

5.215—5:225.) A “broad” clause includes those using language such as 

“any claim arising from or related to this agreement” (id. at ¶ 5:222) while 

“[m]ore narrowly worded clauses” are considered “dangerous to utilize”

(id. at ¶ 5:223)—presumably meaning “dangerous” to the party wanting to 

arbitrate disputes under it.

Bono v. David, 54 Cal. Rptr. 3d 837, 845 (Cal. App. 1 Dist. 2007) (alterations in 

original).

¶28 There are many examples in the jurisprudence in this area which illustrate the 

distinction between these “broad” and “narrow” clauses. For instance, in Wolitarsky v. 

Blue Cross of Ca., 61 Cal. Rptr. 2d 629 (Cal. App. 2 Dist. 1997), a claim that a health 

insurance policy violated state and federal laws against gender discrimination was 

required to go to arbitration based on the following clause:

Any dispute between the Member and Blue Cross regarding the decision of 

Blue Cross must be submitted to binding arbitration if the amount in 

dispute exceeds the jurisdictional limits of the small claims court.

Wolitarsky, 61 Cal. Rptr. 2d at 630.

¶29 Similarly, in Coast Plaza Doctors Hosp. v. Blue Cross of Ca., 99 Cal. Rptr. 2d 809 

(Cal. App. 2 Dist. 2000), a clause which required the arbitration of “[a]ny problem or 

dispute arising under this Agreement and/or concerning the terms of this Agreement” 

required various tort claims asserted by a plaintiff to be submitted to arbitration. Coast 

Plaza, 99 Cal. Rptr. 2d at 812.
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¶30 In Medical Staff of Doctors Medical Center in Modesto v. Kamil, 33 Cal. Rptr. 3d 

853 (Cal. App. 2 Dist. 2005), however, the court concluded that an arbitration clause was 

not broad enough to cover a dispute involving claims of defamation. In that case, several 

groups of physicians practicing at Modesto Hospital sued Blue Cross for defamation after 

it issued press releases stating that “59 percent of the heart procedures performed by [the 

plaintiffs] were medically unnecessary.” Kamil, 33 Cal. Rptr. 3d at 855. Because the 

holding of Kamil aptly sums up the approach we adopt in this case, we quote it at length:

The agreement between Blue Cross and Physicians contains a 

general arbitration clause that provides in part: “BLUE CROSS and 

PHYSICIAN agree to meet and confer in good faith to resolve any 

problems or disputes that may arise under this Agreement. In the event that 

any problem or dispute concerning the terms of this Agreement, other than 

a Utilization Review decision as provided for in Article VII, is not 

satisfactorily resolved, BLUE CROSS and PHYSICIAN agree to arbitrate 

such problem or dispute.”

The first sentence of the clause requires the parties to confer in good 

faith to resolve disputes that arise under the agreement. The next sentence 

apparently limits arbitration to those disputes concerning the terms of the 

agreement.

. . . .

Blue Cross argues the cases establish that a broadly worded 

arbitration clause applies to any controversy that has its “ ‘roots’ ” in the 

contractual relationship. It relies on the general arbitration clause that 

requires arbitration of disputes concerning the terms of the agreement. 

Even assuming this clause can reasonably be read to encompass disputes 

having “roots” in the contract relationship, or arising out of that 

relationship, Blue Cross does not prevail.

. . . .

Here the contract between Blue Cross and Physicians is to provide 

medical care for Blue Cross beneficiaries. The question is whether the 

seemingly innocuous phrase “concerning the terms of” the agreement to 

provide medical care can reasonably be said to include the alleged 

malicious destruction of the Physicians’ personal and professional 

reputations. To ask the question is to answer it. The answer is no. There 

may be cases where the alleged defamation is so intimately bound with the 

terms of the agreement that arbitration is appropriate. But the terms of this 
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agreement do not give Blue Cross carte blanche to publicly pillory 

Physicians in press releases and newspaper reports as alleged here. The 

defamation complained of here no more concerns the terms of the 

agreement, than would a punch in the nose during a dispute over a medical 

billing.

Kamil, 33 Cal. Rptr. 3d at 856-57 (citations omitted).

¶31 In like manner, Klein’s tort of deceit claim “no more concerns the terms of the 

agreement, than would a punch in the nose” during a hearing or any other proceeding 

initiated by the DOC. As stated in Kamil, there may be cases where an alleged tort is “so 

intimately bound with the terms of the agreement that arbitration is appropriate,” but this 

is not one of those cases. As in Kamil, the terms of the CBA do not give the DOC “carte 

blanche” to treat Klein in any manner it sees fit, and then require her to submit any and 

all grievances to arbitration simply because she is an employee—especially, when as 

here, DOC’s actions are not “rooted” in the contractual relationship established between 

the parties in the CBA. See Buckhorn, 18 Cal. Rptr. 3d at 219 (noting that the question of 

whether tort claims can be independently pursued in spite of an arbitration clause “turns 

on whether the tort claims are ‘rooted’ in the contractual relationship between the parties 

. . . .”).

¶32 As we stated in Miller, “a collective bargaining agreement may contain an 

agreement with the employees that the employee will submit to arbitration ‘any 

controversies’ arising from the collective bargaining agreement. When such an 

arbitration provision is included in a contract, it may encompass determination of tort 

claims within the arbitration itself.” Miller, 257 Mont. at 426, 851 P.2d at 403 (citing 

Vukasin v. D.A. Davidson & Co., 241 Mont. 126, 785 P.2d 713 (1990)). If the Union and 
20

DOC had wanted to include a clause requiring arbitration of any and all disputes, or any 

and all tort claims, they could have done so. However, they did not. Thus, we should 

limit ourselves to the terms the parties have actually bargained for, irrespective of 

whether we practice law in Philadelphia or Frenchtown.

¶33 In this connection, we distinguish the State’s reliance on AT&T Technologies, Inc. 

v. Commun. Workers of Am., 475 U.S. 643, 106 S. Ct. 1415 (1986), as well as 

D’Agnostino v. Housing Auth. of the City of Waterbury, 898 A.2d 228 (Conn. App. 

2006), because both of those cases involved whether a lay-off of employees was proper 

under the terms of those collective bargaining agreements. AT&T, 475 U.S. at 645-48, 

106 S. Ct. at 1416-18; D’Agnostino, 898 A.2d at 231. Mallett v. Town of Plainville, 2006 

U.S. Dist. LEXIS 15794 (D. Conn. 2006), is also distinguishable because the plaintiff’s 

claims in that case were dismissed because he failed to state claims for which relief could 

be granted. Mallett, 2006 U.S. Dist. LEXIS at *41-45. While the district court there did 

state that the claims were precluded under the terms of the collective bargaining 

agreement, the language of that agreement was markedly different from the CBA here,1

and the district court’s statements on this point were dicta which we decline to follow. 

Mallett, 2006 U.S. Dist. LEXIS at *45.

¶34 However, we affirm the District Court’s grant of summary judgment with respect 

to Count I, which asserts a deprivation of due process, and Count III, the tort of negligent 

 

1 The pertinent language from Mallett, in which the district court cites to the collective 

bargaining agreement at issue there, reads as follows: “[Section] 13 of the CBA, which provides 

that ‘disputes and consultations on any questions arising out of the Employer-Employee 

relationship’ must be handled in the first instance by filing a grievance with the union . . . .” 

Mallett, 2006 U.S. Dist. LEXIS at *45. 
21

investigation. In Count I, Klein alleged that she was deprived of her career in law 

enforcement as a result of the conduct of DOC, and that she was compelled to relocate 

out of state so as to rebuild her career. As previously noted, Klein’s Complaint was filed 

before she won her grievance and was reinstated to her position with instructions that 

DOC make her whole for the losses she had sustained. Therefore, we conclude that any 

deprivation of due process and the resulting damage occasioned by the loss of her 

employment was arbitrated and compensated for in the grievance process.

¶35 With respect to Count III, we likewise agree with the State that Klein already 

grieved her claim for negligent investigation before the arbitrator when she challenged 

whether she was fired for “just cause”. Indeed, the arbitrator’s finding that she was not 

fired for just cause was based upon the faulty investigation of Klein leading up to her 

discharge. As a result, the District Court properly dismissed this count.

¶36 The Dissent argues that our decision as to Counts II and IV is flawed due to our 

incorrect interpretation of the CBA. The Dissent asserts that the CBA requires Klein to 

submit the question of whether an employment action is arbitrable to arbitration. 

However, the CBA contains no such requirement. Article 17, Section 1 of the CBA 

states that “the parties hereto agree that they will promptly attempt to adjust all disputes 

arising between them involving questions of interpretation or application of the terms and 

provisions of this Agreement.” The Dissent interprets this provision to mean that Klein 

“was required to submit all of her claims that are arguably within the purview of the CBA 

to the arbitrator, and it is the arbitrator, not a reviewing court, that makes the decision 

whether any of such claims are arbitrable under the agreement.” (Dissent, ¶ 49). 
22

However, while the parties certainly could have included language in the CBA which 

required the question of arbitrability to be submitted first to arbitration, they did not. (See

¶¶ 22-23).

¶37 Another issue raised by the Dissent concerns whether or not all of Klein’s claims 

arise from her employer’s treatment of her as an employee, thus constituting a single 

“employment action.” Article 17, Section 3E of the CBA gives employees the option of 

either contesting an employment action through the CBA’s grievance procedures, or 

through utilizing “alternative statutory or civil procedures.” In other words, a single 

employment action cannot be contested both through the grievance procedures of the 

CBA, and through court action. The Dissent contends there can be “no doubt” that all the 

matters addressed in Klein’s complaint constitute an “employment action.”

¶38 Although the term “employment action” is nowhere defined in the CBA, the scope 

of the arbitration clause is narrowly drawn and does not encompass all of Klein’s tort 

claims. The facts giving rise to the tort of deceit and negligent infliction of emotional 

distress as alleged by Klein in her Complaint, are not in any way related to the

“employment action” which she grieved. DOC’s alleged handing over of information 

gleaned from its interview with her to the Gallatin County Attorney for prosecution does 

not in any sense constitute an “employment action.” These alleged actions of the DOC 

do not concern the terms and provisions of the CBA or Klein’s rights as described in 

Section 18.

¶39 Finally, we address the State’s argument that Klein’s claims here are barred under 

the Wrongful Discharge From Employment Act (WDEA), § 39-2-901 through -915, 
23

MCA. Because the District Court dismissed all the counts in Klein’s Complaint for 

failing to exhaust her remedies under the CBA (see ¶ 6), it did not address this claim. 

However, based on the foregoing analysis we find that the WDEA does not bar Counts II 

and IV of Klein’s Complaint because these counts are wholly independent from any 

rights or remedies related to her discharge which were previously addressed when Klein 

grieved that she had not been fired for just cause. See Beasley v. Semitool, Inc., 258 

Mont. 258, 262, 853 P.2d 84, 86 (1993) (noting that the WDEA “does not bar all tort or 

contract claims merely because they arise in the employment context.”).

CONCLUSION

¶40 We affirm the District Court’s grant of summary judgment with respect to Counts 

I and III of Klein’s Complaint, and its dismissal of these claims. We reverse the District 

Court’s grant of summary judgment with respect to Counts II and IV of Klein’s 

Complaint, and remand for further proceedings thereon. 

/S/ PATRICIA COTTER

We concur: 

/S/ JAMES C. NELSON

/S/ JIM RICE

/S/ BRIAN MORRIS

/S/ W. WILLIAM LEAPHART

Chief Justice Karla M. Gray, specially concurring.

¶41 I join in the results reached by the Court and in much of its analysis. I write 

separately to set forth a more direct approach to whether Klein was required to exhaust 
24

the CBA grievance procedures to and through arbitration with regard to her claims of 

deceit and negligent infliction of emotional distress. 

¶42 Article 17, Section 2, of the parties’ negotiated CBA contains a grievance 

procedure which may culminate in final and binding arbitration. Section 39-31-306(2), 

MCA, expressly permits such a provision. CBA Article 17, Section 3, captioned Rules of 

Grievance Processing, contains six subsections, most of which relate directly to the 

procedure set forth in Section 2. 

¶43 Subsection E of Section 3, however, is decidedly different. It provides that 

“[e]mployees desiring to contest an employment action through alternative statutory or 

civil procedures may not contest the same employment action under the provisions of this 

Agreement’s grievance procedure.” The inclusion of this portion of Article 17 makes it 

clear that the Section 2 grievance procedure is not exclusive. Indeed, Section 3E clearly 

provides that an employee can contest one employment action through the Section 2 

grievance procedure and another, different employment action, via civil litigation.

¶44 Here, Klein’s collective bargaining unit successfully pursued her discharge and 

resulting damages through binding arbitration. It is my view that the DOC’s alleged 

willful misrepresentations to Klein about the nature of its dealings with her, which 

resulted in a criminal prosecution, are an employment action separate and apart from the 

later termination of her employment. In my view, this employment action was not part of 

the grievance ultimately processed to—and through—binding arbitration and, therefore, 

Article 17, Section 3E, expressly authorized Klein to raise this employment action in a 
25

civil lawsuit. To hold otherwise would be to ignore a CBA provision the parties 

negotiated in good faith. 

¶45 For these reasons, I join the Court in reversing the District Court on the deceit and 

emotional distress claims asserted by Klein. 

/S/ KARLA M. GRAY

Justice John Warner dissents.

¶46 I dissent. The Court gives mere lip service to the basic concept that Klein is 

required to exhaust all of her remedies by use of the grievance procedure. By intricate 

and complicated analysis, which will make the bar of a great Pennsylvania city proud, the 

Court twists the provisions of the CBA to reach the desired conclusion that Klein may 

both grieve and sue.2

¶47 Initially, I disagree with the Court that this case falls within the narrow exception 

to the rule stated in Small and MacKay. See ¶ 11. It is far from certain that the CBA in 

question is not susceptible to an interpretation that covers Counts II and IV, as well as 

Counts I and III, of Klein’s complaint. I agree with the reasoning of the District Court set 

forth in ¶ 6. The CBA is intended to be a basic and complete agreement between the 

parties concerning terms and conditions of employment. And, as the Court notes, the 

CBA states that any disciplinary action may be applied through the grievance procedure. 

 

2

 Philadelphia lawyer: inter alia, “a shrewd lawyer versed in the intricacies of legal phraseology 

and adept at exploiting legal technicalities.” Webster’s Third New International Dictionary,

Unabridged 1697 (Philip Babcock Gove, ed., Merriam-Webster, Inc. 2002).
26

The CBA obviously intends that the grievance procedure could, at the very least, 

arguably cover all disciplinary matters, including the investigation of Klein’s alleged 

improper actions. 

¶48 The Court incorrectly interprets the CBA to say that Klein can have her cake and 

eat it too. Under the Court’s reading of the agreement, Klein is not required to elect 

either the remedy of arbitration or of a civil suit, but is allowed to grieve those complaints 

she desires and then sue the DOC over the remainder. 

¶49 The error by the Court is in ¶¶ 24-26 where it misinterprets the CBA to say that it 

does not require that the question of whether an employment action is arbitrable be 

submitted to an arbitrator. To the contrary, when arbitration was selected by Klein, she 

was required to submit all of her claims that are arguably within the purview of the CBA 

to the arbitrator, and it is the arbitrator, not a reviewing court, that makes the decision 

whether any such claims are arbitrable under the agreement.

¶50 The parties intended to enter into a binding agreement which is complete and 

covers the terms and conditions of Klein’s employment. The Union and DOC agreed that 

they would adjust all employee disputes under the agreement. Importantly, the parties 

also agreed that any disputes concerning the interpretation of the CBA would be 

submitted to the arbitrator. 

¶51 The facts as outlined by the Court make it clear that Klein’s claims, including her 

alleged damages for deceit and for negligent infliction of emotional distress, arise from 

her employer’s treatment of her as an employee. In the District Court and in her 

appellate brief in this Court, Klein acknowledges that the claim for deceit alleged in 
27

Count II of her complaint is based upon her employer’s misrepresentations leading up to 

and during its interview with her concerning her conduct as an employee; she also admits 

that the claim for negligent infliction of emotional distress alleged in Count IV of her 

complaint is a result of the Department’s actions leading up to her discharge. There can 

be no doubt that these matters constitute “employment action.” A reasonable 

interpretation of the CBA could be that these claims against Klein’s employer arise out of 

the conditions of her employment. Klein advances another interpretation, claims the 

CBA is not ambiguous, and asserts that none of the claims in her complaint are arbitrable. 

The Court agrees in part with Klein and in part with DOC.

¶52 This is a “competing interpretations” case. The CBA is susceptible to at least two, 

if not three, reasonable but conflicting interpretations regarding the arbitrability of DOC’s 

employment actions as alleged in Klein’s complaint. DOC offers one interpretation and 

Klein offers another. The Court comes up with a third alternative and concludes that 

Counts I and III of her complaint were decided by the arbitrator, and thus were 

necessarily arbitrable, and Counts II and IV are not subject to arbitration. Under the 

present circumstances both the CBA itself and the rule in Union-Scioto Loc. Sch. Dist. 

Bd. of Educ. v. Unioto Support Assn., 603 N.E.2d 375, 376 (Ohio App. 1992) (cited with 

approval in Missoula Educ. Assn., 259 Mont. at 445, 857 P.2d at 700), dictate that when 

arbitration is invoked, the arbitrator, not the Court, is to interpret the agreement. 

¶53 The Court notes at ¶ 16 that the CBA provides that employees desiring to contest 

an employment action through alternative statutory or civil procedures may not contest 

the same action by use of the grievance procedures. Then, at ¶ 24, the Court states that 
28

nothing in the CBA says that whether a grievance is arbitrable must first be submitted to 

the arbitrator. This latter statement misses the obvious. Arbitration was chosen by Klein. 

She herself went to the arbitrator, and thus was required to submit all of her claims to 

arbitration, including the question of whether all of her claims are covered by the 

agreement. Having chosen arbitration, Klein must arbitrate all of her claims. 

¶54 Klein does not deny that both the claims she made before the arbitrator and those 

she now makes in her complaint arise out of the same integrated set of facts. Contrary to 

the Court’s assertions at ¶¶ 31, 38, Klein’s tort claims for deceit and emotional distress 

are not wholly independent of the employment agreement. The only reason Klein and 

DOC had anything to do with each other was their employment relationship. In truth, 

Klein’s tort claims are not wholly independent of the employment relationship. They are 

firmly rooted in that relationship, and thus are subject to arbitration. Buckhorn, 18 Cal. Rptr.

3d at 219 (citing Vianna, 33 Cal. Rptr. 2d at 190); see also Tate v. Saratoga Sav. & Loan 

Assn., 265 Cal. Rptr. 440 (Cal. App. 1989) (applying arbitration clause to tort claims 

having their roots in the contractual relationship between the parties).

¶55 Klein chose to take her employment claims to an arbitrator, placing the 

interpretation of the CBA in his hands. Thus, she was contractually and legally required 

to have the arbitrator interpret the agreement and decide if her deceit and emotional 

distress claims were arbitrable under this particular CBA. She cannot now claim in a 

separate civil action that her tort claims are not arbitrable. Cf. Missoula Educ. Assn., 259 

Mont. at 445, 857 P.2d at 700; Union-Scioto, 603 N.E.2d at 376.
29

¶56 A major reason for requiring a public employer to bargain in good faith with its 

employees’ representative is to secure a reasonably quick and inexpensive resolution of 

disputes for the benefit of both labor and management. There is little incentive to agree 

to an arbitration provision in a CBA if one must face both arbitration and a civil suit in 

order to finally determine an employee’s rights and obligations. The CBA in question 

here, expressly in Article 17, Section 3E, prohibited both an arbitration proceeding and a 

civil lawsuit. The Court’s insistence on invading the province of the arbitrator and 

interpreting the agreement itself not only defeats the purpose of this particular agreement, 

it deters both employers and unions from agreeing to arbitrate disputes. Ms. Klein may 

or may not ultimately be successful in this instance. However, both she and DOC now 

have to litigate the same facts twice. The Court’s decision this day to depart from long 

established labor relations rules which deter multiple proceedings re-opens Pandora’s 

Box and does mischief to both employers and employees. I dissent. 

/S/ JOHN WARNER