Published July 1, 2021
The Montana Legislature made significant changes to the Montana Wrongful Discharge Act (WDEA) during the 2021 Legislative Session that became effective April 1, 2021. The changes made the law more employer friendly. Below is what you need to know.
Changes to Probationary Period
- Default probationary period is 12 months. If the employer does not specify a probationary period upon hire, the default probationary period is now 12 months instead of 6 months.
- Maximum probationary period is 18 months. The original probationary period, plus any extensions, may not exceed 18 months.
- Leaves of absence during probationary period do not automatically count as part of the probationary period. An employer must affirmatively elect to include any leaves of absence (an absence from work of more than 5 consecutive working days for any reason other than holidays and vacations) during the probationary period.
- The definition of good cause to terminate an employee has been expanded and now includes “the employee’s material or repeated violation of an express provision of the employer’s written personnel policies.”
- The new good cause definition also gives the employer more discretion on the decision to terminate with the following language: “reasons determined by the employer while exercising the employer’s reasonable business judgment.”
- Previously, a discharge was wrongful if an employer violated its own personnel policy. Now, an employer must materially violate its policy prior to discharge and that violation must deprive the employee of a fair and reasonable opportunity to remain employed for the discharge to be wrongful.
- Broadest discretion to terminate supervisory employees. The new law codified a Montana Supreme Court ruling giving employers the broadest discretion when deciding to discharge any managerial or supervisory employee.
Grievance Procedure as a Limitation on Action
- Employers now have 14 days (as opposed to 7) to notify a discharged employee of their right to file a grievance and provide a copy of the policy/procedure. The notification may now be electronic. If an employer does this, and the employee fails to grieve, they are barred from bringing a claim under the WDEA.
- Wrongful discharge suits must be filed within 1 year after date of discharge and must now be served within 6 months of filing.
- A wrongfully discharged employee’s damages may be reduced by other compensation earned by the former employee. This can include unemployment benefits, early retirement pay, and any other income the employee received.
- Some term contracts are now exempt from the WDEA. IF the original term contract contains a probationary period and an automatic renewal clause, the probationary period renews as well, and the contract is exempt from the WDEA.