Opinion ID: 761503
Heading Depth: 2
Heading Rank: 2

Heading: Montana Supreme Court Cases Interpreting the WDEA

Text: 26 Although neither the plain language of the WDEA nor its legislative history supports Delta's pretext requirement, Delta relies on the Montana Supreme Court's decision in Mysse v. Martens, 279 Mont. 253, 926 P.2d 765 (1996), where the court stated: 27 In order to defeat a motion for summary judgment on the issue of good cause, this court requires the employee to prove that the given reason for the discharge ... is a pretext and not the honest reason for the discharge. 28 Mysse, 926 P.2d at 770 (emphasis added). Delta argues that this language requires Marcy to prove that Delta's stated reason for her discharge was pretextual. We agree with the district court that Delta places too much significance on the Montana Supreme Court's use of the word pretext. 29 A close review of the WDEA case law reveals that the Montana Supreme Court will find that the stated reason for an employee's discharge is not legitimate under the WDEA if the reason given for the employee's discharge: (1) is invalid as a matter of law under the WDEA; (2) rests on a mistaken interpretation of the facts; or (3) is not the honest reason for the discharge, but rather a pretext for some other illegitimate reason. A discharged employee need only prove that one of these three types is true in her case to demonstrate that the reason for her discharge was not legitimate. 30 Thus, contrary to Delta's argument, proof that the employer acted in bad faith by using a pretext to discharge its employee is only one possible way of demonstrating that the employer's stated reason was not a legitimate one. All the Montana Supreme Court cases that have interpreted the WDEA are consistent with this reading. 31
32 Although it has addressed this issue several times, the Montana Supreme Court has not yet held that an employer's given reason for an employee's discharge was invalid as a matter of law under the WDEA. This result is unsurprising, however, because an employer is unlikely ever to offer such a reason for discharging an employee. 33 A discussion of this issue was presented in Buck, supra. Plaintiff James Buck was employed by Frontier Chevrolet as the manager of its car dealership, and was considered to be an exemplary employee. Buck, 811 P.2d at 540. After Frontier was purchased by F.S. Enterprises (FSE), FSE discharged Buck in compliance with a long standing policy of [FSE] ... which placed long term employees in charge of the new dealership. Id. at 539. Buck did not allege that the reason given for his discharge was pretextual or based on a mistaken interpretation of facts; he only challenged whether FSE's policy was a valid business reason on its face under the WDEA. Buck appealed the trial court's grant of summary judgment to FSE. 34 The Montana Supreme Court affirmed the grant of summary judgment, holding that where an employer seeks to fill sensitive managerial or confidential positions, it may properly look to its own employees. Id. at 541. The policy used by FSE would allow FSE to place people in those positions who hold the same business values and philosophies as itself, and also reward its long term employees. Id. The Court determined that because Buck failed to demonstrate that FSE's reason for discharging him was invalid on its face, and further has not come forward with any evidence showing bad faith or falsehood, we hold summary judgment was properly awarded. Id. at 541. In other words, once the Montana Supreme Court determined that Buck had failed to demonstrate that the reason for his discharge was not a legitimate business reason, Buck no longer had a valid claim under the WDEA. 35
36 The second type of case where the Montana Supreme Court has found that the reason for discharge is not legitimate is if the reason given is based on a mistaken interpretation of the facts. The Montana Supreme Court has repeatedly found that an employee discharged for a reason based on a mistaken interpretation of the facts has a valid claim under the WDEA, even if the employer acted in good faith. 37 Morton v. M-W-M, Inc., 263 Mont. 245, 868 P.2d 576 (Mont.1994) presented the Montana Supreme Court with facts strikingly similar to this case. Morton worked as an assistant manager for Burger King, and requested and received vacation time so that she could take care of her children, but instead went to work at a second job for another restaurant, Black Angus. Id. at 578. Although she was generally rated as an exceptional employee, Burger King terminated her, claiming that she had violated company policy by going to work for a competitor, failing to make herself available for part-time work during her vacation, and for being dishonest about her vacation plans. Id. 38 Morton did not dispute that she had gone to work for Black Angus, but denied that she had lied about it. Morton argued that Black Angus was not a competitor of Burger King, and that while she originally intended to use her vacation to take care of her children, she was ultimately able to find a babysitter, and only then did she interview for the position at Black Angus. Id. The Montana Supreme Court reversed the trial court's grant of summary judgment to Burger King. 39 The Montana Supreme Court stated that material issues of fact still existed as to whether Morton misled her employer to obtain vacation time to work for a second job. Id. at 580 (emphasis added). In other words, Burger King fired Morton for being dishonest about her work plans, and Morton had sufficiently demonstrated that there was a triable issue of fact whether Burger King was mistaken. There was no discussion of pretext because proof of pretext was unnecessary. Morton had sufficiently raised a factual question whether the reason given for her discharge was not legitimate because it was based on a mistaken interpretation of the facts. 40 Importantly, the court did not frame the issue as whether Burger King had good reason to think that Morton had misled Burger King, or whether Burger King had acted in good faith in relying on the facts then known to it. Rather, the court's focus was on the factual issue of Morton's intent, regardless of whether Burger King was justified in reaching its decision to terminate Morton. Under Delta's reasoning, the exact opposite would be true--the focus would be on whether Burger King had a good faith basis to believe that Morton lied, regardless of whether she did in fact lie. 41 In Howard v. Conlin Furniture No. 2, Inc., 272 Mont. 433, 901 P.2d 116 (Mont.1995), the Montana Supreme Court reaffirmed that the WDEA does not require the plaintiff to demonstrate that the employer acted in bad faith to state a valid cause of action. The plaintiff, Howard, worked as a manager of a Conlin furniture store, but was fired for alleged deficiencies in his job performance. Id. at 118. At trial, Howard argued that while the factual basis of the allegations were true, there was an innocent explanation for each alleged deficiency. For example, he admitted that he was absent an excessive amount of time, but contended that his absences were related to store business. Id. at 120. The employer also claimed that Howard loaned out a company vehicle which was then damaged while being used by a third party, but Howard explained that he was only acting pursuant to the company's policy of assisting others to build public relations. Id. 42 The trial court granted the employer's motion for summary judgment, finding that [the employer] offered evidence of reasonable job related grounds for [termination], and that Howard's alleged reasons were conclusory and speculative. 3 Id. at 118 (emphasis added). The trial judge seemed to agree with Delta's position that an employer who acts in good faith in terminating an employee may do so without liability under the WDEA, regardless of whether the allegations the employer is relying upon turn out to be mistaken. 43 The Montana Supreme Court reversed, holding that Howard's claims, denials, and counterclaims regarding Conlin's allegations raised a factual issue whether Howard was terminated for good cause. Id. at 120. The court stated, 44 where an employee testified that she had been hard working and loyal and had not received previous complaints from her employer about her management capability; and where she denied that the reasons given by her employer for her termination were correct; there was an issue of fact regarding whether she was terminated for good cause. 45 Id. at 120-21. Again, in reversing the grant of summary judgment to the employer, the court focused on whether the allegations and reasons provided by the employer were mistaken, not whether the employer acted in good faith or had used a pretext. Once Howard raised a genuine issue that the employer's reasons for discharging him were based on a mistaken interpretation of the facts, Howard had stated a valid cause of action under the WDEA. 46
47 a Pretext for Some Other Improper Reason 48 The third type of case where a reason for discharge is not legitimate under the WDEA is if that reason is merely a pretext for some other illegitimate reason. Delta relies heavily on two Montana Supreme Court cases, Mysse v. Martens, 279 Mont. 253, 926 P.2d 765 (1996), and Cecil v. Cardinal Drilling Co., 244 Mont. 405, 797 P.2d 232 (1990), as support for its pretext argument. The facts of both cases reveal, however, that the Montana Supreme Court refers to pretext in these cases only because the plaintiffs in both cases failed to show that their employer's given reason for terminating them was either based on a mistaken interpretation of the facts or invalid as a matter of law. 49 In Mysse, the plaintiff, a driver for the county who used her own vehicle, was ordered to drive a new bus purchased by the county, but she refused. Mysse, 926 P.2d at 768. Even though she was given repeated warnings that she would be fired for disobeying the order, she continued to refuse to drive the county bus. Id. At trial, the plaintiff alleged that she was discharged because she was being made a scapegoat for the county's improvident decision to buy the bus in the first place. Id. at 771. 50 Importantly, Mysse never claimed that her refusal to do her job and drive the new bus was not a legitimate business reason for the county to discharge her. Further, she did not claim that the county's reason rested on a mistaken interpretation of the facts, i.e., that she was in fact willing to drive the bus. Instead, Mysse's claim was that the county used her refusal to drive the county bus as merely a pretext to discharge her for an illegitimate reason--making her a scapegoat. Thus, Mysse's whole claim rested on her ability to prove that the county terminated her to make her a scapegoat. Accordingly, the Montana Supreme Court stated that for Mysse to defeat a motion for summary judgment on the issue of good cause, this Court requires [her] to prove that the given reason for the discharge, such as failure to perform the services the employee was hired to perform, is a pretext and not the honest reason for the discharge. Id. at 770. In other words, it was incumbent upon Mysse to prove pretext only because she rested her entire wrongful discharge claim on the existence of a pretext. Mysse does not hold that a plaintiff must always prove pretext in all cases under the WDEA. 51 Delta argues that Cecil also supports the requirement that the plaintiff prove bad faith through a showing of pretext. Donald Cecil was terminated after a fall in oil prices reduced the revenues of his employer, Cardinal. Cecil argued that his employer did not act fairly or honestly when claiming 'economic necessity' ... as the reason for his termination. Cecil, 797 P.2d at 235. Specifically, Cecil challenged his employer's decision to discharge him by arguing that the fall in oil prices did not require that he be discharged, and that in any event, an economic downturn was not a legitimate reason for discharging him. In other words, Cecil claimed that Cardinal's reason was not legitimate for two reasons: (1) it was based on a mistaken interpretation of the facts; and (2) it was invalid as a matter of law. 52 In affirming the trial court's grant of summary judgment to the employer, the Montana Supreme Court stated that Cecil did not offer any other motive or reason for his termination. He merely denied that the reasons were legitimate business reasons. Id. (emphasis added). We find that Delta reads too much into the Montana Supreme Court's discussion of pretext. 53 The Montana Supreme Court quickly disposed of Cecil's claim that the fall in oil prices was not a valid reason to discharge Cecil. It is well-settled in the case law prior to the [WDEA] that economic conditions constitute a 'legitimate business reason.'  Id. at 234. The Court next addressed Cecil's mistake argument. The Court held that while Cecil did offer some evidence tending to show that it was possible  for his employer to keep him employed despite the economic downturn, Cecil had not offered sufficient evidence to raise a triable issue that Cardinal was mistaken in discharging Cecil out of economic necessity. 54 Cecil failed to raise a triable issue on either of his claims. The Court's discussion of pretext merely reflects the fact that, had Cecil offered sufficient evidence that Cardinal had acted in bad faith, Cecil's claim would have survived summary judgment. Absent such evidence, however, the Montana Supreme Court was unwilling to speculate as to what Cardinal's real reasons may have been if they were in fact not as claimed. Id. Of course, had Cecil offered sufficient evidence to raise a triable issue whether Cardinal's reason was invalid as a matter of law, or whether it rested on a mistaken interpretation of the facts, a discussion of pretext would have been unnecessary.