No. 81-427 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1982 

LEV1 JAMES SNELL I 

Petitioner and Appellant, 

MONTANA-DAKOTA UTILITIES COMPANY 

and THE HUMAN RIGHTS COMMISSION 

OF THE STATE OF MONTANA, 

Respondents and Respondents. 

Appeal from: District Court of the First Judicial District, 

In and for the County of Lewis and Clark 

Honorable Peter Meloy, Judge presiding. 

Counsel of Record: 

For Petitioner: . d& 

James E. Terry, ~a~, Missouri 

For Respondents: 

Crowley, Haughey, Hanson, Toole & Dietrich, Billings, 

Montana 

Jack Ramirez, Billings, Montana 

Frederick F. Sherwood, Helena, Montana 

Submitted on briefs: January 22, 1982 

Filed: flpR 2 z 19821 

Decided: April 22, 1982 
Mr. Justice Fred J. Weber delivered the Opinion of the 

Court. 

Petitioner appeals from a judgment in the First Judicial 

District Court, Lewis and Clark County, affirming the decision 

of the Human Rights Commission (Commission) and dismissing 

petitioner's employment discrimination action against MontanaDakota Utilities Company (MDU). We affirm the District 

Court. 

Petitioner presents the following issues for review: 

(1) Did the District Court apply the proper standards 

of review in affirming the findings of the hearing examiner 

and the Commission? 

(2) Are the findings of the hearing examiner adopted 

by the Human Rights Division and affirmed by the District 

Court supported by substantial evidence or are they "clearly 

erroneous?" 

Petitioner, a Native American, worked as a serviceman 

fitter and welder for MDU in Wolf Point and Poplar, Montana, 

from July of 1973 until late September of 1976, when he 

resigned. He subsequently filed an employment discrimination complaint with the Commission, under section 49-2-501, 

MCA, alleging that racial harassment had forced his resignation, and seeking compensation for lost wages. 

Petitioner's complaint was heard on December 21, 1979, 

before a hearing examiner appointed by the Commission. 

Witnesses appeared for both petitioner and MDU. 

Petitioner testified that his foreman, Howard Hveem, 

pressured and criticized him unjustly, took tools from the 

truck and blamed him, handled machines in ways that endangered 

him, ignorantly criticized his welding technique, and directed 
veiled racial slurs at him by making derogatory comments 

about blacks, and references to Hveem's own youthful clashes 

with "Assiniboines." According to petitioner, his complaints 

to his superiors went unheeded until he quit his job rather 

than risk a violent confrontation. At that point, Hveem was 

replaced as foreman by Jack Sprague, who, upon petitioner's 

return to work, made efforts to assure petitioner's satisfaction 

with working conditions, and to socialize with him at work. 

Petitioner claimed that within a few weeks of Hveem's replacement, 

the rest of the crew "took up for" Hveem, and began to 

ostracize him. He said they would bunch together in the 

coffee room, exchanging derogatory jokes about Indians, and 

using such words as "fucking Indian" and "blanket ass." The 

jokes and comments were not obviously addressed to him, he 

said, but he was only a few yards away, the only Indian in 

the room. He said the coffee room door was slammed in his 

face. He claimed the harassment occurred several times a 

week until he resigned, although he reported it to his 

foreman, Sprague. Petitioner said he was particularly 

reluctant to confront his co-workers because he had twice 

served time for assault, and was determined not to risk a 

conflict that could result in his being imprisoned again. 

He claimed the strain was beginning to undermine his 

health at the time he resigned. Finally, petitioner claimed 

that when he applied for unemployment compensation, he 

indicated discrimination was the reason for his resignation. 

He presented no evidence to corroborate that claim. 

Petitioner's co-workers and supervisors -- those appearing 

for petitioner as well as those appearing for MDU -- testified 

without exception that they had not observed, participated 

in or heard of any racially-motivated harassment of petitioner; 
he had not complained to them of racial slurs by fellow 

workers or discriminatory practices by the company. Their 

testimony presents an uncontradicted description of petitioner 

as a quiet loner, a good welder and valuable employee, 

toward whom his co-workers and supervisors felt no racial 

animus. Witnesses agreed that some MDU machinery moved 

quickly and could be suddenly and unexpectedly dangerous. 

But no one had witnessed any near miss they believed to be 

directed at petitioner by Hveem, nor had petitioner filed 

any "near miss report." Several men testified that petitioner 

had made them aware of his unwillingness to work with Hveem 

because Hveem's loud criticism made him nervous; not one 

said petitioner had mentioned that Hveem showed bias against 

Indians. Hveem himself agreed that he disapproved of petitioner 

because of petitioner's reluctance to do "the pick and 

shovel work," preferring welding. MDU supervisors testified 

that, subsequent to petitioner's complaining about Hveem, 

the foreman was replaced, not because of any racist behavior 

on Hveem's part, but because of his health and his difficulty 

handling his supervisory position. The supervisors also 

indicated that MDU has an active affirmative action program 

and instructs its management personnel that racial discrimination 

is not to be condoned. 

There was general agreement among MDU employees that 

rough language and joking are common among MDU crews, and 

that many jokes are told, some about such ethnic groups as 

North Dakotans, blacks, Norwegians, Poles, and Indians. But 

they all agreed, including an Indian crew member, and others 

whose ethnic groups had been the butt of jokes, that there 

was neither malice nor viciousness in the jokes, and that 
the jokes were not directed at petitioner. They testified, 

also, that the coffee room was airconditioned, although the 

rest of the warehouse was not, and during hot weather someone 

was always getting up and slamming the door shut. No one 

recalled the door being deliberately slammed in petitioner's 

face, as he claimed. 

Several of petitioner's supervisors testified that he 

or his wife had indicated dissatisfaction with his salary 

precipitated his resignation, and that petitioner had never 

told them he resigned because of racial harassment. 

The hearing examiner, on June 25, 1980, entered extensive 

findings of fact and conclusions of law, here included in 

relevant part: 

"PROPOSED FINDINGS OF FACT 

"26. That the testimony of the foreman and 

other witnesses corroborated much of the 

testimony of the Charging Party relating to 

the incidents of the tools; the fight with 

an Indian in 1936; reprimand for throwing 

away the welding rods; the near accidents; 

and the yelling by the foreman; and the preponderance of evidence clearly shows that 

these incidents did in fact occur. 

"32. That pursuant to the complaints about 

the foreman yelling at the Charging Party; 

the health reasons of the foreman and the 

inability of the foreman to organize his 

work and employees, the Division Manager 

on December I, 1975, demoted the foreman to 

gas service man, assigned a new foreman, 

Jack Sprague, to supervise the gas construction crew and the Charging Party and the 

Charging Party returned to work. 

"37. That the preponderance of the evidence 

clearly reflects that jokes were told by coemployees some of which related to Indian 

people and that there was swearing by the coemployees and that some of such swearing was 

used in reference to Indian people but that 

none of the jokes or swearing were directed 

to the Charging Party." 
"47. That the Charging Party testified that 

a few weeks prior to termination he notified 

the Division Manager as to his complaints in 

that he did not want to work around 'Indian 

haters.' However, the Hearing Examiner does 

not find that testimony credible. . . and 

finds the testimony of the Division Manager 

and engineer more credible in that the conversations with the Division Manager and 

engineer only related to wages. 

"48. That the Charging Party left employment 

due to insufficient wages." 

The hearing examiner concluded that foreman Hveem's actions 

"did not reflect racial animus;" that the jokes and profanity 

among co-workers "did not show racial harassment directed to 

the Charging Party but was conversation normally associated 

with construction workers;" that petitioner did not bring 

the alleged racial slurs and discriminatory treatment to 

the attention of MDU management; and finally, that charging 

party's resignation was due to a salary dispute, not racial 

harassment. 

Petitioner filed exceptions to the hearing examiner's 

proposed findings of fact and conclusions of law. 

On November 21, 1980, the Commission heard the exceptions, 

adopted the hearing examiner's findings and conclusions, and 

dismissed petitioner's complaint. Petitioner requested 

judicial review in the First Judicial District Court, pursuant 

to 52-4-702, MCA, and oral argument was heard on March 24, 

1981. Additional briefs were filed. On June 30, 1981, the 

District Court affirmed the decision of the Commission and 

dismissed petitioner's complaint. 

The District Court opinion emphasized that "[allthough 

petitioner is seeking judicial review on grounds (a) through 

(f) of S2-4-704 MCA no contention is made except as to 

subdivision (e), i.e., that the decision of the administrative 
agency is 'clearly erroneous in view of the reliable, probative 

and substantial evidence on the whole record' . . ." The 

~istrict Court, relying upon section 2-4-704(2), MCA, ("the 

court may not substitute its judgment for that of the agency 

as to the weight of the evidence on questions of fact,") and 

upon similar language in Martinez v. Yellowstone County 

Welfare Department (1981) , Mont. , 626 P.2d 242, 38 

St.Rep. 474, concluded that the commissioner's decision was 

amply supported by evidence and testimony. Petitioner 

appeals. 

We note Martinez' reference to federal case law arising 

under Title VII of the Federal Civil Rights Act of 1964, 42 

U.S.C. S2000e et. seq. The Montana Human Rights Act, Title 

49, MCA, is closely modeled after Title VII, and reference 

to pertinent federal case law is both useful and appropriate. 

See Martinez v. Yellowstone County Welfare Department, 

Mont. at , 626 P.2d at 245, 38 St.Rep. at 477. 

I. 

Petitioner argues that the District Court applied the 

wrong standard of review, i.e., that it erred by limiting 

its consideration to the sufficiency of the evidence when 

petitioner had also claimed error of law justifying modification or reversal under section 2-4-704(2) (d), MCA. Petitioner 

contends that it was error of law for the Commission to find 

(1) "that the ethnic jokes and racial epithets petitioner 

was subjected to were not racial harassment," and (2) "that 

MDU cannot be held liable where petitioner did not bring 

this conduct to the attention of his supervisors." We do 

not agree. 

The hearing examiner determined as a matter of fact 

that (1) ethnic jokes and curses occurred, but they were not 
directed at petitioner, and (2) several employees testified 

that "no one gave it much thought." The hearing examiner 

concluded that this "did not show racial harassment directed 

to the Charging Party but was conversation normally associated 

with construction jobs." It is obvious the hearing examiner 

determined that the objectionable remarks were merely casual 

conversation. Title VII cases indicate that the sensitivity 

of an employee to casual remarks, isolated incidents of 

harassment or an occasional racial slur is not sufficient to 

support a Title VII complaint: 

". . . [Allthough a pattern of practice of 

harassment directed at a single employee 

can violate Title VII, casual or isolated 

manifestations of a discriminatory environment. such as a few ethnic or racial slurs, 

may not raise a cause of action. Caric 

v. Kansas City Chiefs I 

-- - 

sters v. United States. 431 

- Id i 

-- ?ootball -- Club Inc., 

.2d 87, 88 (8th Cir. 1977); Fekete v. 

Steel Corp., 353 F.Supp. 1177, 118G 

Pa. 1973); see Int'l --- Brhd of TeamU.S. 324, 336 

2d 396 (1977) ." Bundy v. Jackson (D.C.Cir. 

1981), 641 F.2d 934, 943 n.9 (sexual harassment). 

"After a painstaking review of the transcript, 

we conclude that as a matter of law the racial 

slurs, if any, used at Bunny Bread did not 

violate Title VII. We find no steady barrage 

of opprobrious racial comment. The use, if any, 

of racial terms was infrequent, was limited 

to casual conversation among employees, and 

with possible rare exceptions was not directed toward appellants." Johnson v. Bunny 

Bread Company (8th Cir. 1981), 646 F.2d 1250, 

1257 (failure of proof of constructive discharge). 

"Some of his complaints concerning racial slurs 

are probably true. On the other hand, it is 

probably also true that there is nothing which 

the management or leadership of a company like 

Cameron can do which will totally and absolutely prevent persons from all races from uttering racial slurs. Some stoic and patient acceptance of these slurs is merely one of the prices 

that all of us pay for living in a pluralistic 

society." Buckner v. Cameron Iron Works (S.D. 

Tex. 1979), 23 FEP cases 1092, 1102. 
The hearing examiner also found as a matter of fact 

that petitioner made a number of complaints, but they concerned 

wages, paperwork, and dissatisfaction with his foreman, 

Hveem. He concluded that petitioner did not bring alleged 

incidents of racial harassment to the attention of MDU 

management. He explicitly did not find credible petitioner's 

claim that he did not want to work around "Indian haters," 

and had resigned because of discrimination, finding instead 

that petitioner's resignation was due to insufficient wages. 

Federal discrimination cases do not penalize an employer for 

its ignorance of employee misconduct. 

"A continuing course of harassment by fellow 

employees cannot be imputed to an employer 

unless the employer is aware of such harassment and fails to take reasonable steps to 

remedy the practice. De Grace v. Rumsfeld, 

614 F.2d 796, (1st Cir. 1980)." Kidd v. 

American Air Filter Co. (W.D. Ky. 1980), 23 

FEP cases 381, 382. 

". . .[P]laintiff must show that the employer failed 'to take reasonable steps to prevent racial harassment. . .' At what point 

management must be deemed to be aware of 

racial harassment by employees and must take 

affirmative steps to remedy the situation 

is disputed. Some courts have refused to 

find Title VII violations unless supervisory 

personnel actually participated in the harassment. . . The Court believes, however, that 

the standard for a violation of Title VII 

should be stricter than that of actual participation by management and supervisory 

personnel. If management knows or should 

know of incidents of racial harassment that 

are more than sporadic, it has a responsibility to take reasonable affirmative steps to 

eliminate such incidents ... (One may infer 

from intensity of harassment that management 

was aware or should have been aware); [citations omitted]." Equal Employment Opportunity Commission v. Murphy Motor Freight (D. 

Minn. 1980), 488 Fed.Supp. 381, 385-386. 

In both the question of whether the jokes and swearing 

constituted racial harassment and whether MDU was responsible 

if the incidents were not brought to a superior's attention, 
the hearing examiner's conclusions are consistent with 

federal case law, and logically flow from his findings of 

fact. Petitioner himself stated in his exceptions that 

what he considered errors of law in the hearing examiner's 

conclusions necessarily followed from erroneous findings of 

fact. The District Court correctly assessed petitioner's 

arguments as a challenge to the sufficiency of the evidence, 

and properly limited its review to that issue. 

We also note that a finding of racial harassment would 

not automatically mandate a finding of constructive discharge: 

"There is no clear standard for constructive 

discharge in a Title VII case. In some situations where 'an employee involuntarily resigns 

in order to escape intolerable and illegal 

employment requirements,' a constructive discharge may be found. Young v. Southwestern 

Savings -- and Loan ~ssociation; 509 F.2d 140, 

144 (5th Cir. 1975). Contrary to plaintiff's 

theory, however, the conclusion of constructive discharge does not automatically arise 

whenever employment discrimination is followed by the victim's resignation. See e.g., 

Muller v. U. S. Steel Corporation, 509 F.2d 

923 (10th Fir, 1975), cert. denied, 423 U.S. 

825, 96 S.Ct. 39, 46 L.Ed.2d 41 (1975); 

culiari v. - East-West Gateway Coordinating 

Council, 457 F.Supp. 335 (E.D.Mo. 1978). A 

determination of constructive discharge depends on the totality of circumstances, and 

must be supported by more than an employee's 

subjective judgment that working conditions 

are intolerable." Nolan v. Cleland (N.D. 

Cal. 1979), 482 F.Supp. 668, 672. 

It is a matter of degree, a question of fact for the 

trial court, whether by encouraging, participating in or 

allowing a known pervasive pattern of discrimination, against 

an employee or a class of employees, the employer has rendered 

working conditions so oppressive that resignation is the 

only reasonable alternative. Petitioner has not challenged 

the federal cases; rather, he contests the factual determinations which led to their application. 

Finally, petitioner argues that the hearing examiner 
and the District Court failed to follow the procedure set 

forth in Martinez, supra, for determining whether he had 

established a prima facie case of discrimination. He maintains 

that MDU would have had to show a legitimate, nondiscriminatory 

reason for the apparent discrimination, once petitioner had 

shown that, as a member of a racial minority he suffered 

damages as a direct result of racially-based disparate 

treatment, of which his employer was, or should have been, 

aware. Petitioner states the standard accurately enough, 

but ignores the fact that, according to the hearing examiner, 

he did not make the requisite prima facie showing of discrimination. 

The hearing examiner's findings indicate that petitioner 

did not show that MDU was or should have been aware of 

racial harassment directed at him; he did not establish that 

he was treated differently from his non-minority co-workers; 

he did not show the ethnic jokes were directed primarily at 

Indians or at him. He did not show that Hveem's actions and 

criticisms sprang from racial animus. These are factual 

determinations, to be discussed below. 

11. 

Petitioner argues that the District Court's findings of 

fact and conclusions of law are inconsistent. The record 

shows that the District Court merely recapitulated the 

history of the case and the hearing examiner's findings and 

conclusions. Then, in a brief opinion the court set forth 

the standard for reviewing those findings and, finding ample 

evidence to support them, affirmed the Commission's order. 

There is no need to review those facts in detail. 

Petitioner alone alleged that racial harassment was directed 

at him. He alone maintained that he had notified his superiors 

of the alleged harassment. And he alone testified that he 
told his superiors he was resigning because of racial harassment. No other witness corroborated those allegations; no 

one recalled any harassment of petitioner, or any complaint 

by petitioner about harassment. And no one else felt that 

the jocular, frequently profane, ethnic references between 

employees were vindictive or directed at petitioner. Petitioner's superiors testified that the only dissatisfaction 

petitioner mentioned to them concerned wages, paperwork, and 

his discomfort with Hveem's criticism. 

Section 2-4-704 (2) provides: 

" (2) The court may not substitute its judgment for that of the agency as to the weight 

of the evidence on questions of fact." 

This Court amplified that provision in Martinez, supra: 

". . . In questions of this kind, where the 

agency is entrusted and charged with administering the statute and making necessary, initial factual determinations, it is well settled that a reviewing court's function is 

limited. Where factual determinations are 

warranted by the record and have a reasonable basis in law, they are to be accepted. 

It is not the court's function to substitute 

its own inferences of fact for those of an 

administrative tribunal or agency, where 

facts are supported by the evidence in the 

record. 

"Where the issue (in controversy) is so close 

and there is sufficient credible evidence on 

the record which would allow reaching opposite 

conclusions, we think that a finding which 

overturns another as being 'clearly erroneous' 

is an abuse of discretion. Where the District 

Court's reviewing function is limited, as in 

this case, the findings of administrative 

agencies and tribunals must be sustained where 

there is sufficient credible evidence in the 

record." Martinez v. Yellowstone County Welfare Department, Mont. at , 626 P.2d 

at 247-248, 38 St.Rep. at 480, citing Standard 

Chemical Manufacturing Company v. Employment 

Security Division (1980), Mont. , 605 

P.2d 610, 613-614, 37 St.Rep. 105, 108-110. 

The District Court properly found "ample evidence and 
testimony" to support the findings and conclusions of the 

hearing examiner and the Commission. 

Petitioner also challenges the logic of several of the 

hearing examiner's determinations: 

(1) Petitioner claims that for MDU to assign him to work 

under Hveem, who knew less about arc welding than did petitioner, 

is evidence of MDU's disparate treatment of him, and the 

hearing examiner could not reasonably find no discriminatory 

conduct on the part of MDU. We would point out that Hveem 

had spent 29 years with MDU, and was, apart from his lack of 

expertise in arc welding, a reasonable choice for foreman. 

Furthermore, when certain unjustified reprimands by Hveem of 

petitioner's arc welding technique were brought to the 

supervisor's attention, Hveem was directed to stop them. 

There is no evidence of disparate treatment of petitioner 

here. 

(2) Petitioner argues that it is more reasonable to 

conclude that the conditions which led to his first resignation were not remedied by MDU and caused his final resignation, than that he left because of insufficient wages. But 

the weight of the evidence indicates that petitioner's 

dissatisfaction with Hveem led to his first resignation, and 

was remedied by Hveem's replacement by Sprague as petitioner's 

foreman. Also, when petitioner resigned in 1976, he told 

two of his supervisors he was doing so because of dissatisfaction over wages. There is no evidence but petitioner's own 

testimony, part of which the hearing examiner explicitly 

found not credible, to support his claim that discrimination 

and harassment forced his resignation. There is no inconsistency 

here. 
(3) Petitioner argues that it was not logical for the 

hearing examiner to find that he resigned over a salary 

dispute, when the record shows that he refused MDU's offer 

of more money to do independent welding work for MDU. But 

the record also shows that the nature of the work offered 

would have been different. Further, neither the hearing 

examiner nor the District Court found that petitioner's 

belief that he had been racially harassed was spurious and 

unrelated to his resignation. Nor do we. It is entirely 

possible that petitioner's sensitivity to his co-employeesL 

conduct played a part in his decision to resign and his 

decision not to accept MDU's offer of independent work. But 

petitioner has not shown this Court, as he did not show the 

hearing examiner and the District Court, that the conduct 

actually amounted to racial harassment, or that he had 

brought it to MDU's attention. We do not find petitioner's 

refusal to accept MDU's offer convincing evidence that 

petitioner was, in fact, a victim of racial harassment. 

(4) Finally, petitioner exhorts this Court to "breathe 

life into the words 'equal opportunity"' by requiring a 

lower threshold for a finding of racial harassment than that 

established by the federal courts in Title VII cases. We 

would remind petitioner that 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. 

This is particularly important where, as here, there is only 

one person alleging harassment or discrimination. It would 

be irresponsible for this Court to reverse the ~istrict Court, 
in the teeth of the hearing examiner's finding that, as to a 

crucial question of fact, petitioner's testimony was not 

credible, and despite the District Court's determination 

that the weight of evidence supported MDU's innocence of 

constructive discharge. That we decline to do. 

Affirmed. 

We Concur: