Back to Work: Montana Passes Employer-Friendly Changes to Wrongful Leave Act While Becoming First State to Protect Employees Based on Immunization Status | Baker
[co-author: Megan Uren]
In a wave of activity this spring, the state of Montana implemented several changes to the way employers can do business in Montana. For starters, several changes to Montana’s Wrongful Discharge from Employment Act (WDEA) provide increased flexibility for Montana employers. Additionally, changes to Montana’s human rights law add new COVID-19-related protections for employees based on immunization status.
On March 31, 2021, in particular, the governor of Montana signed HB 254, which, for the first time in over 30 years, revised the WDEA. Many changes beneficial to employers have resulted from these changes and, as explained in more detail below, employers should review and revise internal policies, practices and protocols to take advantage of the changes. On May 7, 2021, in addition, the governor of Montana signed a major bill adding vaccination status as a protected category under Montana human rights law. Montana is the first state to ban discrimination based on immunization status, and the changes create many questions for employers operating in the state, including whether such protection will extend to other jurisdictions.
Amendments to the WDEA
As a backdrop, the WDEA provides an exception to the traditional principle of unlimited employment. Subject to certain exceptions, once an employee has successfully completed a probation period under Montana law, an employer must demonstrate “just cause” for termination. For years, the “good cause” standard and other WDEA requirements have resulted in litigation following the termination of an employee. Recent changes to the WDEA, however, provide employers with more flexibility in managing their workforce and may result in reduced claims for WDEA benefits.
Extended trial period
Under the new law, the default trial period, which is currently six months (unless otherwise provided by an employer’s policy), is increased to 12 months. During the probationary period, an employee can be terminated without a valid reason, so that the relationship becomes akin to an employment relationship at will during this period. However, employers have the option of extending the trial period up to 18 months, but only if the extension takes place before the expiration of the initial trial period. Employers can still define their own trial period in a written policy under the new law, but in the absence of a different period defined by company policy, the trial period will now automatically default. 12 months. This increase in default trial periods will provide employers with a longer time frame to assess employees and, if applicable, separate employment without fear of receiving a WDEA claim.
‘Good cause’ clarified
Under the law, as amended, just cause means “any employment-related reasonable cause for the termination of an employee” based on:
- The inability of an employee to perform their duties satisfactorily.
- Disruption by an employee of the employer’s activities.
- Material or repeated violation by an employee of an express written policy of the employer.
- “Legitimate business reasons determined by employer” which are reasonable business judgments.
It is important to note that the changes added reason “c” to the list of justifications, which gives employers more flexibility in the management of their workforce, in particular by allowing employers to lay off employees for reasons of employment. specific fault in violation of applicable policies. The amendments further recognize that employers have “the greatest discretion” in discharge decisions concerning managerial or supervisory employees.
In light of this addition, employers should review and update, if necessary, their manuals and policies, as well as their policies or practices to hold employees accountable for violations of these same provisions, in order to take advantage of this change.
Limitations of damages and lawsuits
The WDEA revisions also reduce what plaintiffs can recover as damages in a wrongful release request and shorten the time during which plaintiffs can serve a complaint filed under the law.
Normally, a claimant who wins their WDEA claim can recover up to four years of lost wages and benefits as damages. As a result of the changes, however, the recovery of damages from plaintiffs is now subject to additional compensation. For example, a court will now deduct unemployment benefits and early retirement pay, and can broadly consider any other payment or monetary benefit an employee receives following termination. Collectively, these changes reduce what employers may ultimately owe plaintiffs in damages, potentially increasing the leverage for settlement and / or reducing the incentive to file a claim with the WDEA. Additionally, although the statute of limitations for when an employee must file a WDEA claim remains unchanged at one year, the time limit for serving the complaint has been reduced from three years to six months.
Internal complaints procedure
In addition to these changes, employers can now notify employees of any internal grievance process within 14 days of the date of their termination by mail to the employee’s last known address or by email. This is a change from the previous version, which required employers wishing to invoke the administrative exhaustion defense to promptly notify the procedure following termination. Similar to the above, this is an important statutory change, as an employee’s failure to exhaust an employer’s internal grievance process can result in the rejection of a WDEA claim.
Violation of employer and WDEA policies
Finally, the changes limit an employee’s ability to file a WDEA claim related to an employer’s violation of its own policies. Under the revised law, a dismissal for a policy violation is only unjustified if the employer “materially violated” its written policy prior to the dismissal and the violation “deprived the employee of an opportunity. fair and reasonable ”to remain employed. As a result of this amendment, employers may see a reduction in WDEA claims applicable to policy violations as the accountability standard has been strengthened.
Montana Human Rights Act – New protections for COVID-19 vaccination status
Montana also passed changes to account for the controversy surrounding vaccinations and immunity passports. As of May 7, 2021, immunization status is now a protected category under the Montana Human Rights Act. As a result, employers cannot refuse or prohibit someone from taking a job because of the person’s immunization status or possession of an immunity passport.
In addition, the amendments prohibit an employer from discriminating against an employee “as compensation or on some condition. or employment privilege based on the person’s immunization status ”or possession of an immunity passport. In light of these changes, employers must be careful in implementing policies that offer financial incentives for immunization status, discipline employees who have not been immunized, or implement policies, programs, or practices that otherwise favor / disadvantage Montana employees based on their immunization status (even considering CDC guidelines). Note that employers can still recommend that Montana employees get the vaccine.
Finally, the changes include exemptions for certain industries / employers, including, for example, licensed nursing homes, long-term care facilities and assisted living facilities where vaccinations are or may be required.
Montana’s new law is unique in that other states (e.g. Alabama, Florida, Georgia, Texas, etc.) that have proposed or passed legislation regarding vaccination status do not apply. than state and local governments. And one state – Washington – has taken the lead in the full opposition, passing a law requiring employers to check the immunization status of their employees if they wish to remove their masks in the workplace.
Next steps for employers
Overall, the changes to the WDEA are of great benefit to employers, and the sooner employers review and update applicable policies, practices and agreements to take advantage of these changes, the better. At a minimum, employers should (1) update policies, letters of offer or agreements to include the longer 12-month probationary period; (2) review and update employee manuals and policies to reflect new language and protections under the WDEA; and (3) update notification practices for internal 14-day grievance procedures by mail to an employee’s last known address or by email.
Regarding the new ban on discrimination based on immunization status, to mitigate the risks, employers should aim to apply COVID-19 policies equally to all employees, regardless of immunization status. For employers with employees outside of Montana, employers must also ensure that all COVID-19 related programs and policies applicable to their workforce comply with the new Montana requirements. Since Montana is the first state to adopt anti-discrimination provisions based on immunization status, employers with specific questions should consult with legal counsel to better understand the potential options and associated legal risks.