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State snapshot

Key considerations
Which issues would you most highlight to someone new to your state?

Montana is the only state in the United States that does not follow an employment-at-will doctrine. Under Montana’s Wrongful Discharge from Employment Act, employees who have completed their probationary period can be terminated only for “good cause.” “Good cause” is defined as “reasonable job-related grounds” or “other legitimate business reason” (39-2-903(5), MCA).

Montana employers cannot refuse to employ or discriminate against an individual who uses a lawful product off premises during non-working hours (39-2-313, MCA).

Montana has a restrictive drug-testing statute that requires a “qualifying testing program.” Under that statute, drug testing is limited to employees engaged in the performance, supervision, or management of work in a hazardous work environment, security position affecting public safety, or fiduciary position; it does not apply to independent contractors (39-2-207(4), MCA).

Montana requires that every employer in a manufacturing, mechanical, or mercantile establishment; a laundry, a hotel, or restaurant; or another establishment employing any person must provide suitable seats for all employees and permit them to use such seats when they are not employed in the active duties of their employment. Any covered employer which fails, neglects, or refuses to provide suitable seating, or which permits any overseer, superintendent, or other agent to violate the seating requirement may be found guilty of a misdemeanour, subject to fines of $50 to $200 for each offense, or imprisonment in the county jail for 10 to 60 days, or both (39-2-201, MCA).

What do you consider unique to those doing business in your state?

The “good cause” requirement for terminating employees under Montana’s Wrongful Discharge from Employment Act is unusual in the United States.

Is there any general advice you would give in the labor/employment area?

The wrongful discharge requirement in Montana changes the way employers should think about and make employment decisions. This creates significant issues for multi-state employers with employees located in Montana, as it may require changes to policies, employee handbooks, and other more standardized employment practices to comply with Montana’s Wrongful Discharge from Employment Act.

Emerging issues
What are the emerging trends in employment law in your state, including the interplay with other areas of law, such as firearms legislation, legalization of marijuana and privacy?

Marijuana may be used in Montana for medical purposes. Nothing in Montana’s Medical Marijuana Act may be construed to:

  • require an employer to accommodate the medical use of marijuana;
  • prohibit an employer from including in any contract a provision prohibiting the medical use of marijuana; or
  • permit a cause of action against an employer for wrongful discharge (pursuant to 39-2-904, MCA), or discrimination (pursuant to 49-1-102, MCA).

Montana generally has strong privacy protections. For example, it is a violation of privacy to record a conversation, or intercept or monitor electronic communications without the permission or acknowledgment of all parties to the communication.

Although there is no state-wide legislation, local governments have enacted non-discrimination laws prohibiting discrimination in employment on the basis of sexual orientation and gender identity. The cities of Bozeman, Butte, Helena and Missoula have passed such ordinances.

Proposals for reform
Are there any noteworthy proposals for reform in your state?

No employment-related reform measures are currently proposed. 

Numerous ballot measures have been proposed to expand the legalization of marijuana use beyond the current medical marijuana law.

Employment relationship

State-specific laws
What state-specific laws govern the employment relationship?

Title 39 Labor Montana Statutes contains most of the laws governing employer-employee relationships. Employment discrimination laws are found in Title 49 Human Rights Montana Statutes. Montana regulations governing employment issues can be found in Title 24 Labor and Industry Administrative Rules of Montana.

Who do these cover, including categories of workers?

Depending on the specific provision, these laws generally cover employees and independent contractors. Discrimination laws also apply to job applicants.

Misclassification
Are there state-specific rules regarding employee/contractor misclassification?

Montana has a certification process for independent contractors. To establish independent contractor status, the following must be shown:

  • The individual will have an independent contractor exemption certificate issued by the Montana Department of Labor and Insurance;
  • The individual has been and will continue to be free from control or direction over the performance of the services, both under contract and in fact; and
  • The individual is engaged in an independently established trade, occupation, profession, or business (39-51-201(15), MCA; 39-71-417, MCA; 39-71-118 MCA).

Absent an independent contractor certificate, it is presumed that the worker is an employee.

Contracts
Must an employment contract be in writing?

In the absence of a written employment contract for a specific term, Montana’s Wrongful Discharge from Employment Act will govern the employment relationship for purposes of discharge or termination of employment (39-2-912(2), MCA;Solle v. Western States Ins. Agency, Inc., 2000 MT 96, 999 P.2d 328 (Mont. 2000)).

In addition, any agreement that, by its terms, is not to be performed within one year of its conclusion must be in writing (28-2-903(1)(a), MCA).

Are any terms implied into employment contracts?

Every contract contains an implied covenant of good faith and fair dealing which applies to both employer and employee (Solle v. Western States Ins. Agency, Inc., 2000 MT 96, 999 P.2d 328 (Mont. 2000) citing Farris v. Hutchinson, 838 P.2d 374, 377 (Mont. 1992)).

Are mandatory arbitration agreements enforceable?

Yes, contracts requiring arbitration of disputes are enforceable in Montana (27-5-114, MCA). General rules of contract interpretation will apply to determine whether the parties agreed to arbitrate disputes (Solle v. Western States Ins. Agency, Inc., 2000 MT 96, 999 P.2d 328 (Mont. 2000) citing Frates v. Edward D. Jones & Co., 760 P.2d 748, 752 (Mont. 1988)).

How can employers make changes to existing employment agreements?

A contract in writing may be altered by a contract in writing or an executed oral agreement (28-2-1602, MCA).

Hiring

Advertising
What are the requirements relating to advertising open positions?

It is unlawful for an employer or employment agency to print or circulate or cause to be printed or circulated a statement, advertisement, or publication or to use an employment application that expresses, directly or indirectly, a limitation, specification, or discrimination as to sex, marital status, age, physical or mental disability, race, creed, religion, color, or national origin, or an intent to make the limitation, unless based on a bona fide occupational qualification (49-2-303(1)(c), MCA).

In addition, an entity doing business in Montana may not induce, influence, persuade, or engage workers to change from one place to another in the state through or by means of deception, misrepresentation, or false advertising concerning the kind or character of the work, the sanitary or other conditions of employment, or the existence of a strike or other trouble pending between the employer and the employees at the time of or immediately before the engagement. Employers must state in any advertisement, proposal, or contract for the employment of workers that there is a strike, lockout, or other labor trouble at the place of the proposed employment when in fact a strike, lockout, or other trouble actually exists at that place. Failure to do so is considered false advertisement and misrepresentation for which the affected worker may seek damages (39-2-303, MCA).

Background checks
What can employers do with regard to background checks and inquiries?

(a) Criminal records and arrests

Employers cannot ask applicants or employees about arrests, but can ask about criminal convictions (Mont. Admin. R. 24.9.1406).

(b) Medical history

Montana has no general genetic testing law that would prohibit employer inquiries into medical history or genetic traits.

(c) Drug screening

Montana’s Workforce Drug and Alcohol Testing Act, 39-2-205-211, MCA, sets forth the requirements for a qualified drug and alcohol testing program. Before testing, an employer must establish a written testing policy that includes certain information, such as:

  • a description of the applicable legal sanctions under federal, state, and local law for the unlawful manufacture, distribution, possession, or use of a controlled substance; and
  • the employer's standards of conduct that regulate the use of controlled substances and alcohol by employees. 

Permissible reasons for testing include pre-employment, random, reasonable suspicion, post-accident, and follow-up testing.

(d) Credit checks

Montana has its own equivalent to the federal Fair Credit Reporting Act which governs obtaining and using consumer reports, including credit reports that are obtained from a consumer reporting agency (31-3-101-153, MCA). Employers obtaining credit reports to be used for employment purposes must comply with the requirements of this law, including its notice and adverse action notification provisions.

Montana does not otherwise have a law restricting how employers may use credit reports. 

(e) Immigration status

Employers are prohibited from knowingly employing aliens not lawfully authorized to accept employment. Violations can result in a $300 fine. In addition, the Montana Department of Labor or a person harmed by a violation may sue to enjoin the employer from violating this statutory provision and seek other appropriate relief (39-2-305, MCA).

(f) Social media

By statute (39-2-307, MCA), Montana prohibits an employer, or an employer's agent, from requiring or requesting an employee or job applicant to: 

  • disclose a user name or password for the purpose of allowing the employer or employer's agent to access a personal social media account of the employee or job applicant; 
  • access personal social media in the presence of the employer or employer's agent; or 
  • divulge any personal social media or information contained on personal social media. 

Certain exceptions apply when an investigation is underway and the information requested of the employee is necessary to make a factual determination.

(g) Other

Polygraph tests are prohibited. Specifically, an employer cannot require a person to take a polygraph test or any form of mechanical lie detector test as a condition for employment or continued employment (39-2-304, MCA).

Off-duty use of lawful products (e.g., food, beverages and tobacco) is protected. Employers cannot make employment decisions based on an employee’s use of lawful products while off duty. Exceptions include if the employee’s use of a lawful product affects his or her ability to perform job-related responsibilities, affects the safety of other employees, or conflicts with a bona fide occupational qualification that is reasonably related to the employee’s job. In addition, this restriction does not apply to non-profit organizations with a primary purpose of discouraging the use of the lawful product, or if the employment relationship is defined by a professional service contract that authorizes the employer to limit the use of certain products. Further, employers will not violate the law if they believe that their actions are permissible under an established substance abuse or alcohol program or policy, professional contract, or collective bargaining agreement (39-2-313, MCA).

Wage and hour

Pay
What are the main sources of wage and hour laws in your state?

Title 39 Labor, Chapter 3, Wages and Wage Protection of the Montana Code, as well as Rule 24.16, Wages and Hours, Administrative Rules of Montana.

What is the minimum hourly wage?

As of January 1 2016, Montana’s minimum wage is $8.05 per hour. The Montana Department of Labor and Industry reviews the minimum wage on an annual basis and increases the minimum wage if the Consumer Price Index has increased. The state minimum wage for businesses whose gross annual sales are $110,000 or less, and which are not covered by the federal Fair Labor Standards Act, is $4 per hour.

No tip credit may be applied to lower the minimum wage paid to tipped employees.

What are the rules applicable to final pay and deductions from wages?

When an employee is terminated for cause and laid off, all wages due must be paid immediately, unless the employer has a pre-existing written policy that extends the time for the payment of final wages. Under a written policy, final wages on termination of employment may be delayed until the next payday for the period in which the separation occurred, or delayed by 15 calendar days, whichever occurs first.

When an employee quits or resigns, all wages due must be paid on the next scheduled payday for the period in which the employee was separated, or 15 calendar days later, whichever occurs first.

Generally, deductions from wages are lawful only for the following:

  • deductions which the employer is required to make by law (e.g., federal and state taxes, social security, or a garnishment order); and
  • deductions for board, lodging, or other incidentals for the benefit of the employee. It is recommended that agreements for these types of deductions be made in writing.

If an employee is discharged because of an allegation of theft of property or funds connected to the employee’s work, the employer may withhold from the employee’s final paycheck an amount equal to the value of the theft if the employee agrees in writing to the withholding, or the employer files a report of the theft with local law enforcement within seven business days of the separation of employment. If withholding in conjunction with filing a charge, should no charges be filed in court for the alleged theft within 30 days of filing of a report with local law enforcement, wages become due and payable upon the expiration of this 30-day period.

Aside from the exceptions, employers cannot withhold pay from an employee’s paycheck for, among other things, the return of keys, uniforms or tools, or for damages, shortages, or mistakes.

Hours and overtime
What are the requirements for meal and rest breaks?

Montana does not require that employers provide meal or rest breaks. If an employer chooses to provide a meal period, it will not be considered paid time if the meal period is 30 minutes or longer and the employee is completely relieved from duty. If rest breaks are provided, they generally are considered as paid time.

What are the maximum hour rules?

Employers generally require employees to work overtime and may discipline or terminate those employees who do not perform duties or hours as assigned. Exceptions exist for employees in certain occupations where daily work hours are restricted as follows:

  • eight hours for operators of hoisting engines in or at mines, unless relieving a sick employee, or for unforeseen causes (39-4-101, MCA);
  • eight hours for the operator or attendant of a motor bus, except in emergencies (employees must be allowed 12 hours of rest between shifts) (39-4-102, MCA);
  • eight hours in underground mines or diggings (e.g., tunnels), except in emergencies (39-4-103, MCA);
  • eight hours for employees working in strip mines, except in emergencies (39-4-104, MCA);
  • eight hours per day, and 48 hours per working week, for employees in retail stores, excluding registered pharmacists and pharmacist assistants (39-4-105, MCA);
  • nine hours for telephone operators, unless relieving a sick employee, or for unforeseen causes (39-4-106, MCA);
  • eight hours for employees of cement plants or quarries, except in emergencies (39-4-109, MCA);
  • eight hours for employees of sugar refineries, except in emergencies (39-4-110, MCA);
  • eight hours per day (in 12 consecutive hours) and 48 hours per working week in commercial eating establishments, unless relieving sick employees, or other unforeseen causes and emergencies – employees must also receive 12 consecutive hours off duty (39-4-111, MCA); and
  • eight hours per day (in 12 consecutive hours) and 48 hours per working week in public amusements – employees must also receive 12 consecutive hours off duty (39-4-112, MCA).

Unless otherwise exempt, a minor who is 14 or 15 years of age has maximum hour restrictions.

For overtime purposes, non-exempt employees must be paid time and a half of their regular rate of pay for any time worked over 40 hours in the employer’s seven-day working week.

How should overtime be calculated?

Non-exempt employees must be paid time and a half of their regular rate of pay for any time worked over 40 hours in the employer’s seven-day workweek.

If an employee is paid solely on the basis of a single hourly rate, then the hourly rate is his or her regular rate. For overtime work, the employee must be paid, in addition to straight time hourly earnings, a sum determined by multiplying half of the hourly rate by the number of hours worked in excess of 40 in the week.

If an employee is paid on a piece-rate basis, the employee’s regular rate of pay is calculated by adding together his or her total earnings for the working week from piece rates and all other sources (e.g., production bonuses), divided by the number of hours worked in the week. To calculate overtime pay, the pieceworker must be paid, in addition to the total weekly earnings, a sum equivalent to half of this regular rate of pay multiplied by the number of hours worked in excess of 40 in the week.

If a non-exempt employee is paid on a weekly salary basis, the regular hourly rate of pay, on which time and a half must be paid, is calculated by dividing the salary by the number of hours that the salary is intended to compensate.

If an employee, in a single working week works at two or more different types of work for which different rates of pay apply, the employee’s regular rate of pay, on which time and a half must be paid, is the weighted average of such rates.

Additional examples of computing overtime pay may be found at Mont. Admin. R. 24.16.2512.

What exemptions are there from overtime?

Exemptions from overtime include employees covered by the Fair Labor Standards Act white collar exemptions, certain domestic employees, certain farm, ranch, and agriculture employees and other narrow exemptions. 

Record keeping
What payroll and payment records must be maintained?

Employers must maintain the following payroll records for every non-exempt employee for a minimum of three years:

  • full name and identifying symbol or number, if used in place of name on any time, work, or payroll records;
  • home address, including zip code;
  • date of birth;
  • sex and occupation;
  • time of day and day of week on which the employee’s working week begins;
  • regular hourly rate of pay, and length of pay period;
  • hours worked each workday and total hours worked each workweek;
  • total daily or weekly straight-time earnings;
  • total weekly overtime pay;
  • total additions to or deductions from wages paid each pay period;
  • total wages paid each pay period; and
  • date of payment and the pay period covered.

Required records for bona fide executive, administrative, and professional employees to be kept for a minimum of three years include the first to fifth items and tenth to twelfth items on the above list, and the basis on which wages are paid (e.g., $500 per month).

Discrimination, harassment and family leave

What is the state law in relation to:

Protected categories
(a) Age?

It is an unlawful discriminatory practice for an employer to refuse employment, bar a person from employment, or discriminate against a person in compensation or in a term, condition, or privilege of employment because of age, when the reasonable demands of the position do not require an age distinction (49-2-303, MCA). The exception permitted based on bona fide occupational qualifications must be strictly construed.

(b) Race?

It is an unlawful discriminatory practice for an employer to refuse employment, bar a person from employment, or discriminate against a person in compensation or in a term, condition, or privilege of employment because of race (49-2-303, MCA).

(c) Disability?

It is an unlawful discriminatory practice for an employer to refuse employment, bar a person from employment, or discriminate against a person in compensation or in a term, condition, or privilege of employment because of physical or mental disability, when the reasonable demands of the position do not require a physical or mental disability distinction (49-2-303, MCA). The exception permitted based on bona fide occupational qualifications must be strictly construed.

(d) Gender?

It is an unlawful discriminatory practice for an employer to refuse employment, bar a person from employment, or discriminate against a person in compensation or in a term, condition, or privilege of employment because of sex, when the reasonable demands of the position do not require a sex distinction (49-2-303, MCA). The exception permitted based on bona fide occupational qualifications must be strictly construed. 

(e) Sexual orientation?

Generally, sexual orientation is not a protected class under Montana law. Private employers are not prohibited from discriminating on the basis of sexual orientation or gender identity under state law. By executive order, the state government may not discriminate or permit harassment with respect to employment based on sexual orientation (Non-discrimination EEO Policy 3-0630).

Municipalities in Montana may have local non-discrimination laws prohibiting discrimination in employment on the basis of sexual orientation and gender identity. Bozeman, Butte, Helena and Missoula have passed such protections.

(f) Religion?

It is an unlawful discriminatory practice for an employer to refuse employment, bar a person from employment, or discriminate against a person in compensation or in a term, condition, or privilege of employment because of religion (49-2-303, MCA).

(g) Medical?

Generally, medical history or genetics is not a protected class under Montana law.

It is unlawful for an employer to require any employee or applicant to pay the cost of a medical examination or the cost of furnishing any records of such examination (39-2-301, MCA).

Insurers, health service corporations, health maintenance organizations, fraternal benefit societies, and other issuers of individual or group policies or certificates of insurance may not discriminate on the basis of a person’s genetic traits and are prohibited from requiring genetic testing unless the test is otherwise required by law (33-18-902, MCA).

(h) Other?

Additional protected classes under Montana law include creed, color, and national origin (49-2-303, MCA). It is also an unlawful discriminatory practice for an employer to refuse employment, bar a person from employment, or discriminate against a person in compensation or in a term, condition, or privilege of employment because of marital status, when the reasonable demands of the position do not require a marital status distinction (49-2-303, MCA). The exception permitted based on bona fide occupational qualifications must be strictly construed. It is not a violation of the prohibition against marital status discrimination: 

  • for an employer or labor organization to provide greater or additional contributions to a bona fide group insurance plan for employees with dependents than to those employees without dependents or with fewer dependents; or 
  • for an employer to employ or offer to employ a person who is qualified for the position and also to employ or offer to employ the person's spouse.

Harassment
What is the state law in relation to harassment?

Sexual harassment, as well as harassment based on another protected class, is prohibited. Employers may be liable for monetary damages or other forms of relief based on harassment by an owner or manager, supervisors (whether or not the employer knew of the harassment), co-workers (when the employer knew or should have known of the harassment and failed to take corrective action), and non-employees (when the employer knew or should have known of the harassment and failed to take corrective action).

Family and medical leave
What is the state law in relation to family and medical leave?

Montana has no state family and medical leave law similar to the federal Family and Medical Leave Act. It does have a maternity leave law that prohibits employers from:

  • terminating a woman’s employment because of pregnancy;
  • refusing to grant the employee reasonable leave of absence for pregnancy;
  • denying compensation under disability or leave benefits to an employee who is disabled as a result of pregnancy; or
  • requiring that an employee take mandatory maternity leave for an unreasonable length of time (49-2-310, MCA).

On return to work following pregnancy-related leave, the employee must be reinstated to her original job or an equivalent position with equivalent pay and accumulated seniority, benefits, retirement and other service credits, unless the employer’s circumstances have so changed as to make it impossible or unreasonable to do so (49-2-311, MCA).

Privacy in the workplace

Privacy and monitoring
What are employees’ rights with regard to privacy and monitoring?

Montana’s Constitution contains a protective right of personal privacy (1972 Montana Constitution, Article II, Sections 10-11).

By statute, Montana protects privacy in communications by making it an offense to knowingly or purposely record a conversation, or intercept or monitor electronic communications without the permission or acknowledgment of all parties to the communication. If a warning that a conversation may be transcribed or recorded is provided, either party may record it (45-8-213, MCA).

Because of Montana’s strong constitutional right of privacy, employers should inform employees by way of written policies of the employer’s intent to conduct surveillance, monitoring, or searches at their discretion.

Are there state rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?

By statute (39-2-307, MCA), Montana prohibits an employer, or an employer's agent, from requiring or requesting an employee or job applicant to: 

  • disclose a username or password for the purpose of allowing the employer or employer's agent to access a personal social media account of the employee or job applicant; 
  • access personal social media in the presence of the employer or employer's agent; or 
  • divulge any personal social media or information contained on personal social media. 

Exceptions apply when an investigation is underway and the information requested of the employee is necessary to make a factual determination, and when:

  • the employer has specific information about employee activity that indicates work-related employee misconduct or criminal defamation, as provided in 45-8-212; 
  • the employer has specific information about the unauthorized transfer by the employee of the employer's proprietary information, confidential information, trade secrets, or financial data to a personal online account or personal online service; or 
  • an employer is required to ensure compliance with applicable federal laws or federal regulatory requirements or with the rules of self-regulatory organizations as defined in Section 3(a)(26) of the Securities and Exchange Act 1934 (15 U.S.C. 78c(a)(26)).

"Personal social media" is defined as a password-protected electronic service or account containing electronic content, including emails, videos, photographs, blogs, video blogs, podcasts, instant and text messages, internet website profiles or locations, and online services or accounts, including password-protected services or accounts to which an employee may post information, data, or pictures. The term does not include a social media account that is: 

  • opened for or provided by an educational institution and intended solely for educational purposes; or 
  • opened for or provided by an employer and intended solely for business-related purposes.

Bring your own device
What is the latest position in relation to bring your own device?

Montana law does not address this issue.

Off-duty
To what extent can employers regulate off-duty conduct?

Off-duty use of lawful products (e.g., food, beverages and tobacco) is protected. Employers cannot make employment decisions based on an employee’s use of lawful products while off duty. Exceptions include if the employee’s use of a lawful product affects the employee’s ability to perform job-related responsibilities, affects the safety of other employees, or conflicts with a bona fide occupational qualification that is reasonably related to the employee’s job. In addition, this restriction does not apply to non-profit organizations with a primary purpose of discouraging the use of the lawful product, or if the employment relationship is defined by a professional service contract that authorizes the employer to limit the use of certain products. Further, employers will not violate the law if they believe their actions are permissible under an established substance abuse or alcohol program or policy, professional contract, or collective bargaining agreement (39-2-313, MCA).

Gun rights
Are there state rules protecting gun rights in the employment context?

Montana has no law that requires employers to allow guns in the workplace or on its premises. 

Trade secrets and restrictive covenants

Intellectual Property
Who owns IP rights created by employees during the course of their employment?

Generally, a work created by an employee in the scope of his or her employment is considered a work made for hire and belongs to the employer. It is strongly recommended that employers clarify their rights to intellectual property in advance through an agreement or policy.

Restrictive covenants
What types of restrictive covenants are recognized and enforceable?

Montana does not look favorably on restrictive covenants. Any contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void (28-2-703, MCA). Exceptions exist when included in the sale of a business or an agreement between partners on dissolution of a partnership (28-2-704, 705, MCA).

The Montana Supreme Court has provided that the factors which determine whether a restrictive covenant is an unreasonable restraint of trade includes the following:

  • The restriction should be limited in operation as to time and place;
  • The restriction should be based on good consideration; and
  • The restriction should afford a reasonable protection for and not impose an unreasonable burden on the employer, or public (Dobbins, DeGuire and Tucker, P.C. v. Rutherford, MacDonald & Olson, 218 Mont. 392, 708 P.2d 577 (1985)).

Continued employment is not sufficient consideration to support a non-compete agreement signed after the employee was hired (Access Organics, Inc. v. Hernandez, 341 Mont. 73, 175 P.3d 899 (2008)).

The Montana Supreme Court has upheld the use of the “blue pencil” approach to rewriting unlawful restrictions rather than striking the entire restrictive covenant (Dumont v. Tucker, 250 Mont. 417, 822 P.2d 96 (1991)).

Non-compete
Are there any special rules on non-competes for particular classes of employee?

Montana does not look favorably upon restrictive covenants. Any contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind is to that extent void (28-2-703, MCA). Exceptions exist when included in the sale of a business or an agreement between partners on dissolution of a partnership (28-2-704, 705, MCA).

Labor relations

Right to work
Is the state a “right to work” state?

Montana is not a “right to work” state.

Unions and layoffs
Is the state (or a particular area) known to be heavily unionized?

Approximately 13% of Montana’s workers are union members. Unionized industries include mining, the public sector and, to some extent, healthcare.

What rules apply to layoffs? Are there particular rules for plant closures/mass layoffs?

Montana has no law regarding plant closures and mass layoffs for private employers. Under the State Governmental Protection Act, state government employees must be notified pursuant to 39-2-1001, MCA.

Discipline and termination

State procedures
Are there state-specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

Montana has no law governing private employers with regard to discipline and grievance procedures. However, employers should be mindful of Montana’s Wrongful Discharge from Employment Act, which negates the employment-at-will relationship after the employee completes a probationary period (39-2-904, MCA). Because “good cause" under the act is defined as reasonable job-related grounds for dismissal based on failure to satisfactorily perform job duties, disruption of the employer's operation, or other legitimate business reason (39-2-903, MCA), employers should diligently document any deficiencies in job performance, violations of company policies, or employee misconduct. If an employer maintains a written grievance procedure under which an employee may appeal a discharge within the organizational structure of the employer, and the employer provides the employee with a copy of the internal grievance procedure within seven days of the date of the discharge, it is a complete defense to a wrongful discharge claim if the employee fails to utilize the procedure.

At-will or notice
At-will status and/or notice period?

Montana is the only state in the United States that does not follow an employment-at-will doctrine. Under Montana’s Wrongful Discharge from Employment Act, 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 violated the express provisions of its own written personnel policy. 
     

During a probationary period, employment may be terminated at the will of either the employer or the employee on notice to the other for any reason or for no reason. If an employer does not establish a specific probationary period or provide that there is no probationary period before or at the time of hire, there is a six-month probationary period from the date of hire (39-2-904, MCA).

“Good cause" is defined as reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of the employer's operation, or other legitimate business reason (39-2-903, MCA).

The act does not apply to a discharge of an employee covered by a written collective bargaining agreement or a written contract of employment for a specific term, or when the discharge is subject to any other state or federal statute that provides a procedure or remedy for contesting the dispute, such as anti-discrimination and anti-retaliation statutes (39-2-912, MCA).

Claims under the act for wrongful discharge must be brought within one year of the date of discharge. If the employer maintains written internal procedures that allow an employee to appeal a discharge, the employee must first exhaust those internal procedures (39-2-911, MCA).

What restrictions apply to the above?

Montana is the only state in the United States that does not follow an employment-at-will doctrine. Under Montana’s Wrongful Discharge from Employment Act, employees who have completed their probationary period can be terminated only for “good cause.” “Good cause” is defined as “reasonable job-related grounds” or “other legitimate business reason” (39-2-903(5), MCA).

Montana employers cannot refuse to employ or discriminate against an individual who uses a lawful product off premises during non-working hours (39-2-313, MCA).

Final paychecks
Are there state-specific rules on when final paychecks are due after termination?

When an employee is terminated for cause or laid off, all wages due must be paid immediately, unless the employer has a pre-existing written policy that extends the time for the payment of final wages. Under a written policy, final wages on termination of employment may be delayed until the next payday for the period in which the separation occurred, or delayed by 15 calendar days, whichever occurs first.

When an employee quits or resigns, all wages due must be paid on the next scheduled payday for the period in which the employee was separated, or 15 calendar days later, whichever occurs first.