Employment Law Case raises questions about termination practices

Last Friday, the Montana Chamber attended the oral argument of the Montana Supreme Court on a case deciding a very important business issue:

Can an employer be prevented from introducing evidence or making claims in a Wrongful Discharge lawsuit that weren’t mentioned in a termination letter?

The case is Smith v. Charter Communications, Inc., where a manager was terminated for not meeting the company’s requirement to travel to the locations he supervised. Charles Smith sued under Montana’s Wrongful Discharge from Employment Act (WDEA), arguing that Charter should not be allowed to present evidence of his work performance that was not included in the termination letter he received. 

In the present case, Charles Smith (plaintiff) was terminated from his employment for failing to meet his travel requirement as a supervisor for Charter over several locations in three states. The termination letter gave two reasons for Smith’s termination: Smith had allowed an employee to work as an electrician in violation of company policy; and had failed to fulfill a “50% travel requirement” in his management area.  Charter’s actual employment policy gave Smith a “25% travel requirement.”  The federal district court allowed undisputed evidence that Smith had failed to meet the 25% travel requirement and granted summary judgment for Charter. On appeal to the Ninth Circuit Court of Appeals, Smith argued that since termination letter referred to a “50% travel requirement” but did not mention a “25% travel requirement,” Charter should not be able to argue in Court that Smith was not meeting a 25% travel requirement.  

Previous court cases in the 1990s severely restricted employers from defending themselves based on a blacklisting statute that was outside the language of the WDEA altogether. 

In 1999, the Montana Chamber helped amend the blacklisting law to eliminate the requirement for a “full” statement in a termination letter. The amended law specifically states the letter does not limit an employer from presenting a “full defense.” 

While the case is in federal court, this question of law was posed by the Ninth Circuit Court of Appeals to the MT Supreme Court since WDEA is a state law. Federal courts do this from time-to-time to allow state courts to answer questions about state statutes. Six of the seven MT Supreme Court justices participated in the oral argument on Friday (Justice Shea was at a family wedding), but all seven will have a say in how the question posed by the Ninth Circuit Court of Appeals will be answered. 

Five of the six justices injected their questions as both attorneys attempted to make their best arguments as they faced off. The two most active justices in posing questions were Justices Beth Baker and Laurie McKinnon. Observers will often try to discern how the justices may already be leaning based on their line of questioning, but no justice displayed any clear favorite as the argument progressed. 

Justice McKinnon asked the first question of the plaintiff’s side. Pointing to the legislative history, she pointed out how many of the cases from the 1990s show up in the committee hearing discussion. Isn’t that proof the Legislature was trying to reverse those cases, she asked. But she also grilled the defense counsel with suggestions that the Legislature didn’t “get the job done” in the 1999 amendments because no changes were made to the WDEA itself. Charter’s attorney wisely pointed out that the WDEA never had the language regarding evidence in its statutes, but that the Court in the 1990s tied the blacklisting language to the WDEA. 

Justice Baker also asked questions of both sides. In one of her questions, she confirmed the fact that trial courts still have the ability to determine the relevance of evidence without some court-created exclusion of evidence for employers. Justice Rice asked questions only of the plaintiff’s side, with a real desire to understand how the 25% and 50% travel requirements were really “unrelated.” Rice seemed to imply the lack of any mention of the 25% requirement in the letter should hardly prevent the employer from raising any travel-related issues the company had with the terminated employee since it had raised the 50% requirement in its letter. 

Chief Justice Mike McGrath raised a portion of the legislative history that involved then-Governor Marc Racicot and a letter from his office suggesting the language stay broad to apply more universally.

Decisions in these cases are never immediate, although look for this one to take a bit less time than normal decisions since it’s a single question of law posed by the Ninth Circuit. The Montana Chamber will carefully analyze the outcome, discuss the positive or negative consequences, and inform you of how it might impact your business. 

Employment Law Case raises questions about termination practices

Last Friday, the Montana Chamber attended the oral argument of the Montana Supreme Court on a case deciding a very important business issue:

Can an employer be prevented from introducing evidence or making claims in a Wrongful Discharge lawsuit that weren’t mentioned in a termination letter?

The case is Smith v. Charter Communications, Inc., where a manager was terminated for not meeting the company’s requirement to travel to the locations he supervised. Charles Smith sued under Montana’s Wrongful Discharge from Employment Act (WDEA), arguing that Charter should not be allowed to present evidence of his work performance that was not included in the termination letter he received. 

To read the Montana Chamber’s reporting and analysis on the Montana Supreme Court employment law argument last week, click here…

In the present case, Charles Smith (plaintiff) was terminated from his employment for failing to meet his travel requirement as a supervisor for Charter over several locations in three states. The termination letter gave two reasons for Smith’s termination: Smith had allowed an employee to work as an electrician in violation of company policy; and had failed to fulfill a “50% travel requirement” in his management area.  Charter’s actual employment policy gave Smith a “25% travel requirement.”  The federal district court allowed undisputed evidence that Smith had failed to meet the 25% travel requirement and granted summary judgment for Charter. On appeal to the Ninth Circuit Court of Appeals, Smith argued that since termination letter referred to a “50% travel requirement” but did not mention a “25% travel requirement,” Charter should not be able to argue in Court that Smith was not meeting a 25% travel requirement.  

Previous court cases in the 1990s severely restricted employers from defending themselves based on a blacklisting statute that was outside the language of the WDEA altogether. 

In 1999, the Montana Chamber helped amend the blacklisting law to eliminate the requirement for a “full” statement in a termination letter. The amended law specifically states the letter does not limit an employer from presenting a “full defense.” 

While the case is in federal court, this question of law was posed by the Ninth Circuit Court of Appeals to the MT Supreme Court since WDEA is a state law. Federal courts do this from time-to-time to allow state courts to answer questions about state statutes. Six of the seven MT Supreme Court justices participated in the oral argument on Friday (Justice Shea was at a family wedding), but all seven will have a say in how the question posed by the Ninth Circuit Court of Appeals will be answered. 

Five of the six justices injected their questions as both attorneys attempted to make their best arguments as they faced off. The two most active justices in posing questions were Justices Beth Baker and Laurie McKinnon. Observers will often try to discern how the justices may already be leaning based on their line of questioning, but no justice displayed any clear favorite as the argument progressed. 

Justice McKinnon asked the first question of the plaintiff’s side. Pointing to the legislative history, she pointed out how many of the cases from the 1990s show up in the committee hearing discussion. Isn’t that proof the Legislature was trying to reverse those cases, she asked. But she also grilled the defense counsel with suggestions that the Legislature didn’t “get the job done” in the 1999 amendments because no changes were made to the WDEA itself. Charter’s attorney wisely pointed out that the WDEA never had the language regarding evidence in its statutes, but that the Court in the 1990s tied the blacklisting language to the WDEA. 

Justice Baker also asked questions of both sides. In one of her questions, she confirmed the fact that trial courts still have the ability to determine the relevance of evidence without some court-created exclusion of evidence for employers. Justice Rice asked questions only of the plaintiff’s side, with a real desire to understand how the 25% and 50% travel requirements were really “unrelated.” Rice seemed to imply the lack of any mention of the 25% requirement in the letter should hardly prevent the employer from raising any travel-related issues the company had with the terminated employee since it had raised the 50% requirement in its letter. 

Chief Justice Mike McGrath raised a portion of the legislative history that involved then-Governor Marc Racicot and a letter from his office suggesting the language stay broad to apply more universally.

Decisions in these cases are never immediate, although look for this one to take a bit less time than normal decisions since it’s a single question of law posed by the Ninth Circuit. The Montana Chamber will carefully analyze the outcome, discuss the positive or negative consequences, and inform you of how it might impact your business.