Employers and employees should know a few things about the new law. Montana is unique because it protects employees from at-will termination by an employer. The 2021 Montana legislature revised the elements of wrongful discharge that affect the employment relationship in favor of employers. Montana Code Annotated Section 39-2-901 (2021) et. seq.
The law now provides a default 12 month probationary period to all employment unless an employer establishes a specific probationary period or provides there is no probationary period prior to or at the time the employee begins work. Employers may extend the probationary period an additional six months. The probationary period together with any extended probationary periods may not exceed 18 months. A leave of absence does not count toward the probationary period unless the employer affirmatively includes it.
“Good Cause” has been redefined to mean “any reasonable job-related grounds for an employee’s dismissal based on: the employee's failure to satisfactorily perform job duties; the employee's disruption of the employer's operation; the employee's material or repeated violation of an express provision of the employer's written policies; or other legitimate business reasons determined by the employer while exercising the employer's reasonable business judgment. The legal use of a lawful product by an individual off the employer's premises during nonworking hours is not a legitimate business reason, unless the employer acts within the provisions of 39-2-313(3) or (4).
The new law added a definition for a “leave of absence” to mean an employee’s absence from work for a period of more than five consecutive working days for any reason other than holidays and vacations.
The law changes MCA 39-2-904, which sets forth the elements of wrongful discharge. A discharge is wrongful only if it was in retaliation for the employee's refusal to violate public policy or for reporting a violation of public policy; the discharge was not for good cause and the employee had completed the employer's probationary period of employment; or the employer materially violated an express provision of its own written personnel policy prior to the discharge, and the violation deprived the employee of a fair and reasonable opportunity to remain in a position of employment with the employer.
The new statute also gives employers the broadest discretion when making a decision to discharge any managerial or supervisory employee.
Remedies for wrongful discharge have also been changed under MCA 39-2-905. If an employer has committed a wrongful discharge, the employee may be awarded lost wages and fringe benefits for a period not to exceed 4 years from the date of discharge, together with interest on the lost wages and fringe benefits. The employee's interim earnings, derived from any new kind, nature, or type of work, hire, contractor status, or employment that did not exist at the time of discharge, including amounts the employee could have earned with reasonable diligence from the work, hire, contractor status, or employment, must be deducted from the amount awarded for lost wages. Before interim earnings are deducted from lost wages, there must be deducted from the interim earnings any reasonable amounts expended by the employee in searching for, obtaining, or relocating to new employment. Following any verdict or award in favor of the discharged employee, the district court shall consider any monetary payments, compensation, or benefits the employee received arising from or related to the discharge, including unemployment compensation or benefits and early retirement pay, and shall deduct those payments, compensation, and benefits from the amount awarded for lost wages before entering judgment.
The legislature also changed critical deadlines associated with wrongful discharge under MCA 39-2-911. Wrongful discharge suits must be filed within 1 year after the date of discharge and served within six months of filing. Courts are ordered to dismiss any case not served within six months.
Grievance procedure timelines are now more employer-friendly. If an employer maintains written internal procedures, other than those specified in 39-2-912, under which an employee may appeal a discharge within the organizational structure of the employer, the employee shall first exhaust those procedures prior to filing an action under this part. The employee's failure to initiate or exhaust available internal procedures is a defense to an action brought under this part. If the employer's internal procedures are not completed within 90 days from the date the employee initiates the internal procedures, the employee may file an action under this part and for purposes of this subsection the employer's internal procedures are considered exhausted. The limitation period in subsection (1) is tolled until the procedures are exhausted. In no case may the provisions of the employer's internal procedures extend the limitation period in subsection (1) more than 120 days.
Grievance procedures now specifically allow for emailed, texted or other “electronic” notice. The clock starts ticking when the employer hits send. If the employer maintains written internal procedures under which an employee may appeal a discharge within the organizational structure of the employer, the employer shall within 14 days of the date of the discharge notify the discharged employee in writing or electronically of the existence of the internal procedures. The timeframe for the employee to initiate the procedures, if any, begins to run from the date the employer sends or provides a copy of the internal procedures in writing or electronically. A copy of the procedures must be considered provided to the employee if the employer sends a copy of the procedures to the employee's last-known postal mailing address or electronic mailing address, or the employee's attorney If the employer fails to comply with this subsection, the discharged employee need not comply with subsection (2).
All this is to say the legislature made it easier to fire an employee and gave employers more latitude in how they manage and terminate employees.
