Montana Employment Law and the 1987 Wrongful Discharge from Employment Act: A New Order Begins
![handle is hein.journals/montlr51 and id is 100 raw text is: MONTANA EMPLOYMENT LAW AND THE 1987
WRONGFUL DISCHARGE FROM EMPLOYMENT
ACT: A NEW ORDER BEGINS
LeRoy H. Schramm*
I. Introduction ..................................... 94
II. The Alternating Expansion and Contraction of Em-
ploym ent Tort Actions ........................... 96
A. Redefining the Employer Covenant of Good
F a ith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 6
B. Creating Exceptions to the Covenant ......... 99
C. Shifting Standards for Applying the Covenant
1 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0 1
D. The Uncertain Future for the Common-Law
Em ploym ent Tort ........................... 106
III. The Passage of the Wrongful Discharge From Em-
ploym ent A ct .................................... 108
IV. The Supreme Court Upholds the Act .............. 112
V., The Impact of the New Legislation ................ 115
A. N ational Attention .......................... 115
B. Probationary Employees ..................... 116
C. Internal Grievance Procedures ................ 117
D. Arbitration and Fee Shifting ................. 118
E. Specific Term Employees .................... 121
F. Unionized Employees ........................ 122
G. Public Employees and the Immunity Doctrine 123
V I. C onclusion ...................................... 125
I. INTRODUCTION
In January 1982, the Montana Supreme Court crossed a signif-
icant threshold in employment law when it recognized an em-
ployer's liability for breach of an implied covenant of good faith
and fair dealing in Gates v. Life of Montana Insurance Co. (Gates
I).1 This decision represented a major break from the old era of
* Mr. Schramm is Chief Legal Counsel for the Montana University System. B.A., 1966,
Valparaiso University; M.A., 1968, State University of N.Y. at Albany; Ph.D., 1972, New
York State School of Industrial and Labor Relations, Cornell University; J.D. 1977, William
Mitchell College of Law.
1. 196 Mont. 178, 638 P.2d 1063 (1982). In 1983 this case was brought before the court
a second time. Gates v. Life of Montana Insur. Co., 205 Mont. 304, 668 P.2d 213 (1983)
[hereinafter Gates II]. The employment covenant of good faith and fair dealing had been
acknowledged earlier in dictum in Reiter v. Yellowstone County, - Mont. -, -, 627](ViewImageLocal?handle=hein.journals/montlr51&div=8&collection=&method=preview&ext=.png&size=3)
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Montana Employment Law and the 1987 Wrongful Discharge from Employment Act: A New Order Begins
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