No. 89-284 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

PIERRE A. LAVE, 

Petitioner and Appellant, 

-vsMONTANA STATE DEPARTMENT OF LABOR 

AND INDUSTRY, BOARD OF LABOR APPEALS; 

and SUBARU OF BILLINGS, 

Respondents and Respondents. 

--. 

APPEAL FROM: District Court of the Thirteenth ~udicial ~istrict, 

In and for the County of Yellowstone, C-CI 

The Honorable ~illiam Speare, Judge presid$ng. t? 

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COUNSEL OF RECORD: -a 

For Appellant: 

Michael G. ~iselein; Lynaugh, ~itzgerald & ~iselein, 

~illings, Montana 

For Respondent: 

Charles K. ail, Dept. of Labor & Industry, Helena, 

Montana 

Laura Mitchell; Crowley, Haughey, Hanson, Toole & 

~ietrich, ~illings, Montana 

submitted on ~riefs: Aug. 17, 1989 

Decided: September 28, 1989 

Filed: 

- Clerk .. .. 5 
Justice William E. Hunt, Sr., delivered the Opinion of the 

Court. 

Pierre LaVe, petitioner, appeals from an order of the 

District Court of the ~hirteenth Judicial District, 

Yellowstone County, affirming the Board of Labor Appeals 

decision denying his unemployment compensation benefits, 

pursuant to § 39-51-2410(5), MCA. We reverse. 

The issue raised on appeal is whether the District Court 

erred in finding that a negligent failure to replace oil in 

the crankcase of a customer's automobile constituted 

"misconduct" within the meaning of the Montana Unemployment 

Compensation Insurance statutes and, based on that 

conclusion, erred in affirming the Board of Labor Appeals 

denial of unemployment benefits. 

LaVe was employed by Subaru of ~illings as an automobile 

mechanic for approximately two years. On March 11, 1988, 

LaVe was assigned to service a customer's vehicle which 

included changing the oil and filter. LaVe drained the oil 

and changed the filter. The next step in the process would 

have been to replace the oil but Lave's attention was 

diverted from the task when his supervisor directed him to 

work on another vehicle belonging to a "rush customer." LaVe 

drove the car he was servicing outside and proceeded to work 

on the rush order. The original customer returned for his 

vehicle and drove it a short distance when the engine seized 

due to lack of oil. Approximately $2,300 worth of damage 

resulted. LaVe offered to pay for the damage. 

On March 12, 1988, LaVe was terminated for "misconduct" 

by Subaru of ~illings as a consequence of the incident. LaVe 

applied for unemployment benefits but the local Job Service 

representative and redetermination deputy denied the 
application on the grounds that LaVe was terminated for 

"misconduct." 

On May 12, 1988, a telephone hearing was held before an 

appeals referee who upheld the decision of the Job Service 

representative. On June 17, 1988, a hearing was held before 

the Board of Labor Appeals. The Board affirmed the decision 

of the appeals referee and adopted, as its own, the referee's 

findings of fact. LaVe then petitioned the District Court 

for review of the Board's decision. On March 27, 1989, the 

District Court entered its order affirming the decision of 

the Board and dismissing the petition for review based on the 

conclusion that LaVe was terminated for "misconduct." From 

this order LaVe appeals. 

The issue raised on appeal is whether the District Court 

erred in finding that a negligent failure to replace oil in 

the crankcase of a customer's automobile constituted 

"misconduct" within the meaning of the Montana Unemployment 

Compensation Insurance statutes and, based on that 

conclusion, erred in affirming the Board of Labor Appeal's 

denial of unemployment benefits. 

The standard of review utilized in Department of Labor 

and Industry disputes is set forth in part under § 

39-51-2410 (5), MCA, as follows: 

In any judicial proceeding under 39-51-2406 through 

39-51-2410, the findinss of the board as to the 

facts, if supported b~ evidence and in the absence 

of fraud, shall be conclusive and the jurisdiction 

of said court shall be confined to questions of 

law. (Emphasis ours. ) 

In Zimmer-Jackson Associates, Inc., v. Department of 

Labor and Industry (Mont. 1988), 752 P.2d 1095, 1097, 45 

St.Rep. 679, 681, we stated that, upon review of a decision 

of the Department of Labor and Industry, the ~istrict Court, 

as well as this Court, must "treat the findings of the Board 
as conclusive if they are supported & substantial evidence 

and are absent fraud. " (Emphasis ours. ) Also, in 

Zimmer-Jackson, 752 P.2d at 1097, we stated that it is for 

this Court to determine whether the District Court committed 

an abuse of discretion. 

In the present case, the District Court found that, 

"Petitioner here did not have a bad purpose in not replacing 

the oil nor did he desire the injury sustained." However, 

the court still found that Lave's inadvertent failure to 

replace oil in a customer's automobile constituted statutory 

"misconduct," which precluded unemployment benefits under S 

39-51-2303(l), MCA. We disagree with the District Court's 

finding. 

Section 39-51-2303(1), MCA, provides in part: 

An individual shall be disqualified for benefits 

after being discharged: 

. . . for misconduct connected with the 

individual's work or affecting the individual's 

employment until the individual has performed 

services, other than self-employment, for which 

remuneration is received equal to or in excess of 

eight times the individual's weekly benefit amount 

subsequent to the week in which the act causing the 

disqualification occurred. 

While the definition of "misconduct" is not set forth in 

the above statute, it is provided for under S 24.11.418, 

A.R.M., in part as follows: 

(1 This rule defines and interprets 

disqualification for discharge due to a claimant's 

misconduct or misconduct affecting his employment 

as set forth in M.C.A. 39-51-2303. 

(2) "Misconduct" defined: Conduct on the part of 

the employee evincing such wilful or wanton 

disreqard of an employer's - - interest as isfound in 

deliberate violations or disregard of standards of 

behavior which the employer - - has the right to expect 

of his employee, or in carelessness - or neslisence 
-- of such degree or recurrence -- as to manifest equal 

culpability, wrongful intent -- or evil design, or to 

show an intentional or substantial disregard of the 

employer-'s interest or of the employee's - - duties and 

obligations to his employer. - Mere inefficiency, 

unsatisfactory conduct, failure - ~n good performance 

- as the result of inabilit or incapacity, 

~nadvxences or ordinary negl?igen~e .- in isolated 

instances, or good faith errors in judgment, or 

discretion ---- are not to be deemed "mi~onduct" within 

the meaning -- of the statute. 

(6) The statutory term misconduct shall not be 

literally applied so as to operate as a forfeiture 

except in clear instances of wilful or wanton 

misconduct by the claimant which affects the 

employer's interest. (Emphasis ours.) 

Further, this Court has had the opportunity to define 

"misconduct" on several occasions. See Ashland oil, Inc., v. 

Department of Labor and Industry (Mont. 1988), 765 ~.2d 727, 

45 St.Rep. 2169 (misconduct found where employee wrote 

several non-sufficient fund checks to employer) ; Connolly v. 

Montana Board of Labor Appeals (Mont. 1987), 734 ~.2d 1211, 

44 St.Rep. 587 (misconduct found where employee refused to 

follow his supervisor's instructions, falsified records, 

refused to assist a patient in distress, and harassed and 

played games with his subordinates); Gaunce v. Board of Labor 

Appeals (1974), 164 Mont. 445, 524 P.2d 1108 (misconduct 

found where employee refused to work overtime and train new 

employees). In each of these cases, an intentional disregard 

of the employer's expectation was committed by the employee. 

In the present case, however, Lave was discharged for a 

negligent, not an intentional, act. 

In Gaunce, 524 P.2d at 1110, this Court specifically 

defined misconduct as: 

[A] deliberate, wilful, or wanton disregard of an 

employer's interest or of the standards of behavior 

which he has a right to expect of his employee, or . . . carelessness or negligence of such a degree 
or recurrence as to manifest equal culpability, 

wrongful intent, or evil design. 

Citing Boynton Cab Co. v. Neubeck (1941), 237 Wis. 249, 296 

N.W. 636, as summarized in the Annot., 26 A.L.R.3d 1356, 

1359. 

Here, a single incident of negligence was the basis for 

Lave's discharge. The evidence supports the fact that his 

inadvertence to replace oil in a customer's automobile was 

nothing more than an incident of negligence. The act was not 

wilful, wanton, deliberate, intentional, done with wrongful 

intent, evil design, nor was it a deliberate disregard of the 

employer's interest as required to support a finding of 

"misconduct." In fact, LaVe offered to pay for the damage 

that resulted from his inadvertence. 

In light of the evidence, Lave's conduct did not 

constitute "misconduct" as statutorily defined. Lave ' s 

unemployment compensation benefits were improperly denied and 

the District Court abused its discretion in affirming the 

decision of the Board of Labor Appeals. 

The ~istrict Court's order is reversed and remanded for 

a reconsideration of Lave's petition consistent with this 
CORRECTION 

Date /D I /a ~/89 

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