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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).