No. 91-090
IN THE SUPREME COURT OF THE STATE OF MONTANA
,
TRUSTEES, BIG HORN COUNTY SCHOOL DISTRICT
.-'r i ;
i lggl
NO. 27, and NANCY KEENAN, Superintendent C.,.'. -.
,'
of Public Instruction. C L E , : ! ! ~,
. ; . L,~:,2:d ~.
: . y
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis & Clark,
The Honorable Dorothy McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
ring; Hi
Emilie Lo: Loring, Missoula, Mont
For Respondents:
James L. Vogel, Attorney at Law, Hardin, Montana
Beda Lovitt, Office of Public Instruction, Helena,
Montana
Submitted on Briefs: August 1, 1991
Decided: December 10, 1991
Filed:
Justice Karla M. Gray delivered the Opinion of the Court.
The appellant, Scott T. Medicine Horse (Medicine Horse),
appeals from a judgment entered by the District Court of the First
Judicial District, Lewis and Clark County, affirming a decision by
State Superintendent of Public Instruction Nancy Keenan. We
affirm.
The issue before this Court is whether the District Court
erred in affirmingthe State Superintendent of Public Instruction's
decision that Medicine Horse was an p a will1'employee who received
lt
the process due him upon his discharge from employment.
Medicine Horse was employed as a custodian by Big Horn County
School District No. 27 from 1984 to 1988. He worked without a
written contract or agreement under Gary Greseth (Greseth),
Principal of Non-instructional Affairs of Lodge Grass Public
Schools. In August of 1988, Greseth began establishing a written
record of Medicine Horse's work-related problems. Greseth
determined that Medicine Horse needed additional supervision and
instituted weekly meetings between himself and Medicine Horse in
order to more closely monitor Medicine Horse's progress.
The appellant's job performance continued to deteriorate and
on November 23, 1988, Greseth suspended Medicine Horse without pay
for three days because of several incidents with a co-worker.
Medicine Horse did not appeal this action.
Greseth's duties included the scheduling of janitors'
workshifts. On either December 16 or 19, 1988 , Greseth posted a
Christmas vacation work schedule. This schedule included a shift
change for Medicine Horse and others. The shift change was to
begin on December 21, 1988.
Medicine Horse was on sick leave December 16 and 19. On
December 20, Greseth found a note from Medicine Horse on his door
stating that Medicine Horse would work his usual 8:00 a.m. until
4:00 p.m. shift instead of the later shift to which Greseth had
assigned him. Greseth showed this note to Superintendent Bert
Corcoran. Both men determined that the note amounted to
insubordination. Greseth claims he spoke to Medicine Horse on
December 20 and informed him at that time that he would recommend
immediate termination of Medicine Horse at the school district
trustees' meeting that night. Medicine Horse claims that he was at
two doctor appointments in Billings all day December 20, 1988, did
not speak to Greseth on that day, and had no idea that Greseth
intended to recommend his termination. Medicine Horse contends
that he arrived for work at his new shift time, 2:00 p.m., on
December 21, 1988, to find that he had been terminated by the
trustees at their December 20, 1988 meeting.
Medicine Horse requested, and was granted, a hearing by the
trustees which took place on January 17, 1989. The trustees took
no action following this hearing and his discharge remained in
effect. Subsequently, Medicine Horse appealed to the Big Horn
County Superintendent of Schools as provided in § 20-3-210, MCA.
The County Superintendent affirmed the discharge on the basis that
Medicine Horse was an I a will1'employee. Following the directives
't
of 20-3-107, MCA, Medicine Horse next appealed to the State
Superintendent of Public Instruction; she upheld his discharge and
status as an "at will11 employee. Medicine Horse then sought
judicial review under the Montana Administrative Procedure Act.
The District Court affirmed the State Superintendent of Public
Instruction.
This appeal centers on Medicine Horse's contention that he was
denied due process of law because he did not have written notice of
the reasons for his termination or of the termination itself, and
was not provided a pretermination hearing. The appellant contends
that he was a permanent employee and, thus, had a property interest
in his employment. The respondents claim Medicine Horse was an Itat
willt1employee, had notification of the trustees' consideration of
his termination before the meeting at which he was terminated, and
received the post-termination hearing he requested even though that
hearing was entirely discretionary with the trustees.
We note at the outset that the issues for review at both the
District Court and this Court are conclusions of law; all parties
agree that the appropriate standard of review is contained in § 2-
4-704, MCA. We have clarified in recent cases that under 5 2-4-
704, MCA, our standard of review relating to conclusions of law,
whether the conclusions are made by an agency, workers1
compensation court, or trial court, is whether the tribunal's
interpretation of the law is correct. Steer, Inc. v. Department of
Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603; see also
GBN, Inc. v. Montana Department of Revenue (Mont. 1991), 815 P.2d
595, 596-97, 48 St,Rep. 715, 716.
AT WILL
Respondent Big Horn County School District (School District)
argues that Medicine Horse is an "at wi11lq employee and is governed
by the Montana will1' statute:
Termination at will. An employment having no specified
term may be terminated at the will of either party on
notice to the other. . . .
Section 39-2-503, MCA. We have concluded that an Itat willtg
employee is one whose term of employment has no specific duration.
Hobbs v. Pacific Hide and Fur Depot (l989), 236 Mont. 503, 771 P.2d
125. Medicine Horse has provided no evidence that his employment
had any specified term. His employment was not governed by a
contract which specified the duration of his employ, nor do the
laws and regulations governing his position as an employee of the
School District specify any such term.
Quoting from a 1984 article in the Montana Arbitrators
Association Ouarterlv, the appellant contends that the doctrine of
"at willM employment is no longer viable in Montana. While that
may have appeared to the author to be the case in 1984, we disagree
that such is the state of the law in Montana. In Prout v. Sears,
Roebuck and Co. (l989), 236 Mont. 152, 772 P.2d 288, w e applied the
"at willlt statute to persons who have no specific term to their
employment. And while Prout was decided on the basis of pre-
Wrongful Discharge From Employment Act law, neither that Act nor
any other action by the Montana legislature or this Court has
nullified the "at willn designation or g 39-2-503, MCA.
We hold that Medicine Horse is an "at willv employee who had
no specific duration or term for his employment with the School
District.
NOTICE
The appellant argues that even if he is an "at will" employee
he was still entitled to notice. This Court has interpreted the
"at will11statute to mean that notice prior to termination is not
required. Prout v. Sears, Roebuck and Co. (1989), 236 Mont. 152,
772 P.2d 288; Gates v. Life of Montana Insurance Co. (1982), 196
Mont. 178, 638 P.2d 1063. We hold that Medicine Horse was not
entitled to prior notice of his termination under the Montana "at
willw statute.
The appellant next argues that he was entitled to notice of
the reasons for his discharge because the School District's policy
"did not give the Superintendent authority to suspend or terminate
without giving the employee the reasons for such action. .. . II
The policy does not require the superintendent to provide reasons
for termination:
SUSPENSION AND DISMISSAL OF NON-CERTIFIED STAFF
Non-certified Staff members are employed by the
Superintendent subject to review by the Board of
Trustees. They may be suspended at any time by the
Superintendent. Non-certified employees may be
terminated at any time by the Superintendent however
employees may request the Board of Trustees to review the
process of a pretermination hearing.
Procedural due process, which the appellant claims entitled
him to a pretesmination hearing, is required only when the rights
of liberty and property protected by the Fourteenth Amendment have
been infringed. Akhtar, 197 Mont. at 210, 642 P.2d at 152. In
Cleveland Board of Education v. Loudermill (l985), 470 U.S. 532,
105 S.Ct. 1487, 84 L.Ed.2d 494, the United States Supreme Court
held that a public employee is entitled to procedural due process
if he or she has a property right in continued employment. Once a
property interest is determined to exist, procedural due process
mandates a hearing before termination. Loudermill, 470 U.S. at
542, 105 S.Ct. at 1493, 84 L.Ed.2d at 503-504.
A property interest in onets position must be created by
existing rules or regulations, state laws, or understandings
between employee and employer. Board of Regents v. Roth (19721,
408 U.S. 564, 92 S-Ct. 2701, 33 L.Ed.2d 548. l his Court has
adopted the Roth reasoning and prerequisites to a property
interest. Akhtar, 197 Mont. at 211, 212, 642 P.2d at 153.
Medicine Horse presented no written contract, state law, or
regulation specifically stating or otherwise indicating that he had
a property interest in his position as custodian. The written
policy quoted earlier states that a non-certified employee, like
Medicine Horse, can be terminated any time and that a hearing mav
be provided to the employee at the discretion of the trustees; that
policy does not support the appellant's claim of a property
interest in his position. Nor do any rules or school regulations
mandate that a hearing granted by the trustees must occur before a
discharge; indeed, the referenced policy makes it clear that any
such hearing would occur after the termination.
Medicine Horset subjective belief that he had a property
s
interest in his job does not create such a property interest. A
subjective expectancy creates no constitutionally protected
interest. Perry v. Sindermann (1972), 408 U.S. 593, 92 S.Ct. 2694,
33 L.Ed.2d 570. A "mutually explicit understanding" between the
parties can lead to a property interest. Perry, 408 U.S. at 601,
92 S.Ct. at 2699, 33 L.Ed.2d at 580. Here, however, the written
School District policy regarding discharge of non-certified
employees and the progressive discipline in which Medicine Horse
was involved do not support the existence of such a mutually
explicit understanding.
Medicine Horse also argues that he had a property interest in
his position because his probationary period was over and he worked
for the School District in excess of four years; thus, he asserts
that he had a reasonable expectation that his job would continue.
Medicine Horse would have this Court equate the tlpermanencylt
of
employment that comes with passing a probationary period with a
property interest in onets employment. Both this Court and the
United States Supreme Court have rejected this argument.
We considered whether length of employment gives rise to a
property interest in Reiter v. Yellowstone County (1981), 192 Mont.
194, 627 P.2d 845. There, a custodian with eighteen years of
employment with the school district was not provided with a hearing
upon discharge. We held that he had no property interest in his
position by virtue of his years of service, absent a contractually
specified term of employment. The Reiter holding relied on a
United States Supreme Court case involving a police officer who had
passed his probationary period and was considered permanent. The
Supreme Court held in that case that the police officer had no
property interest in his position and that his position was
continued at the will of the city. Bishop v. Wood (1976), 426 U.S.
341, 96 S.Ct. 2074, 48 L.Ed.2d 684.
The appellant relies heavily on Tolson v. Sheridan School
Dist. (E.D. Ark. 1988), 703 F.Supp 766. In Tolson, a bus driver
sued the school district claiming his due process rights had been
violated at the time of his discharge. Tolson had experienced
discipline problems with the students on his bus and reported this
to the district. On the day he made his report, Tolson returned to
his home after doing errands and found his school bus, previously
parked in front of his house, gone. Subsequently, he discovered
that the district had sent someone to retrieve it and that he had
been fired. The court held that Tolson's due process rights were
violated when he was not given adequate notice and an opportunity
to be heard.
The appellant's reliance on Tolson is misplaced. Tolson had
a contract with the district for a specific term. In addition, the
parties in the Tolson case stipulated that Tolson had a property
interest in his employment contract within the meaning of the Due
Process Clause of the Fourteenth Amendment. Given this
stipulation, the issue of whether Tolson did or did not have a
property interest in his position was not before the court.
In light of our holdings that Medicine Horse was an I1at willI1
employee who had no property interest in his position, we find no
error by the ~istrictCourt.
AFFIRMED.
We concur:
Chief Justice
Justice Terry N. Trieweiler dissenting.
I dissent from the majority opinion.
Scott Medicine Horse testified that he was not at work on
December 20, 1988, and was not notified of the school board meeting
at which his termination was to be discussed. It is undisputed
that the agenda for that meeting did not include notice to Medicine
Horse or anyone else that his termination would be a subject of
discussion. Even after the meeting and his termination, he was not
given reasons for his termination or an opportunity to respond to
those specific reasons at the subsequent meeting at which he
appeared. Neither the County Superintendent, the State
Superintendent, nor the District Court resolved the factual dispute
regarding notice because all arrived at a legal conclusion that
Medicine Horse was an employee "at will" and was not entitled to
due process prior to his termination.
This Court concludes that because the school district had a
written regulation providing for its employees1 termination at any
time that Medicine Horse had no property interest in his
employment. However, if the determination of who does and who does
not have a property interest in employment is going to be left to
employers, then the due process requirement of the Fourteenth
Amendment to the United States Constitution is meaningless.
I find it incredible that through the cumbersome intellectual
process known as legal analysis courts have concluded that a person
receiving welfare benefits has a "property interest" in the
12
continued receipt of those benefits that is safeguarded by
procedural due process. See Goldbergv. Kelly (1970), 397 U.S. 254, 90
S.Ct. 1011, 25 L.Ed.2d 287. However, this man had no "property
interest" in the government job he had performed for four and
one-half years and which was his sole means of providing food,
clothing, and housing for himself and his family.
I agree with the dissent of Justice Marshall in Board o Regents
f
v.Roth, 408 U.S. 564, 589, when he states that:
Employment is one of the greatest, if not the greatest,
benefits that governments offer in modern-day life. When
something as valuable as the opportunity to work is at
stake, the government may not reward some citizens and
not others without demonstrating that its actions are
fair and equitable. And it is procedural due process
that is our fundamental guarantee of fairness, our
protection against arbitrary, capricious, and
unreasonable government action.
Mr. Justice Douglas has written that:
"It is not without significance that most of the
provisions of the Bill of Rights are procedural.
It is procedure that spells much of the difference
between rule by law and rule by whim or caprice.
Steadfast adherence to strict procedural safeguards
is our main assurance that there will be equal
justice under law. Joiut Anti-Fascist Refigee Committee v.
McCratl~,
snpra, at 179 (concurring opinion).
However, it is not necessary to rely on Justice Marshall's
dissent in R o t l ~ , to conclude that Medicine Horse had a "property
interest" in his employment. In Peny v. Sindermarm, 408 U.S. 593,
601-02, another employment case decided by the United States
Supreme Court on the same date as Roth, the majority stated:
A person s interest in a benefit is a ltpropertytt
interest
for due process purposes if there are such rules or
mutually explicit urzderstandings that support his claim af
entitlement to the benefit and that he may invoke at a
hearing. [Roth, 408 U.S. at 577.1
A written contract with an explicit tenure provision
clearly is evidence of a formal understanding that
supports a teacher's claim of entitlement to continued
employment unless sufficient tficauseM shown.
is Yet
absence of such an explicit contractual provision may not
always foreclose the possibility that a teacher has a
"property" interest in re-employment. For example, the
law of contracts in most, if not all, jurisdictions long
has employed a process by which agreements, though not
formalized in writing, may be 3A. Corbin on
Contracts 562-572A (1960). Explicit contractual
provisions may be supplemented by other agreements
implied from 'Ithe promisor's words and conduct in the
light of the surrounding circumstan~es.~ Id., at 5 562.
And, l1[tjhe meaning of the [the promisor's] words and
acts is found by relating them to the usage of the past."
[Ruth, 408 U.S. at 577.1 [Emphasis added.]
In this case, Medicine H o r s e had been employed by the school
district for f o u r and one-half years. H e testified that h e was a
temporary employee for one year, but that after one year he was
given permanent status which included sick leave, annual leave,
vacation pay, and some expectation of permanency. He testified
that he was given that expectation not only by another employee,
but by John Pretty On Top, a member of the school board. No one
testified to the contrary. The only other witness who testified
before the County superintendent about Medicine Horse's status was
Gary Greseth. Greseth was the principal of noninstructional
affairs who supervised Medicine Horse. H e also testified that
Medicine Horse was a permanent employee.
The majority relies on 5 39-2-503, MCA, for its conclusion
that Medicine Horse was an employee at will because he had no
specified term. However, I would conclude that when an employee is
advised that he is permanent, that is a specified term.
Furthermore, we have previously held in other circumstances
that in spite of the language found in 5 39-2-503, MCA, an employee
can have a reasonable expectation of job security, based on
representations by his employer, even though he has no specified
term of employment. See Dare v. Montana Petroleum Marketing Co. ( 1984) , 2 12
Mont. 274, 687 P.2d 1015. Although the specific cause of action
authorized under Dare has been superseded by the Wrongful Discharge
From Employment Act found at 39-2-901, MCA, & s q , the
e .
principle remains that the effect of the at will statute is subject
to alteration by the conduct of the parties to the employment
relationship.
Because the employee in this case was led to believe that
after a year of probationary employment he had achieved "permanent"
status, I would conclude that his interest in his employment became
a lrproperty" interest for due process purposes based upon the
"mutually explicit understandingsttbetween the employee and his
employer. Having reached that conclusion, the next question is,
"what kind of 'due processt was he entitled to?"
The school district contends that because he was afforded an
opportunity to contest his termination after the fact, Medicine
Horse received a11 the due process that he was entitled to.
However, for obvious reasons, an after the fact hearing does not
provide due process. For one thing, the decision that Medicine
Horse was undesirable and should be terminated had already been
made without his presence or input. Any further consideration of
his value as an employee by the same board necessarily had to have
been tainted by the board's concern for justifying its own actions.
I am sure that this is one of the considerations the United States
Board o Education v.
Supreme Court had i n mind when it decided Clevelar~d f
Loudemzill, 470 U.S. 532. In that case, the court held that only
pretermination input from the employee could satisfy the due
process clause. The court concluded that where the employee had a
property right in his employment, his employer could not dictate
the terms of the due process to which he was entitled.
Specifically, the court found that a post-termination opportunity
to be heard was inadequate, The court stated:
An essential principle of due process is that a
deprivation of life, liberty, or property "be preceded by
notice and opportunity for hearing appropriate to the
nature of the case. Mullarze v. Cejztral Harzover Bark & T w t Co. ,
339 U.S. 306, 313, 94 L.Ed. 865, 70 S.Ct. 652 (1950). We
have described "the root requirementn of the Due Process
Clause as b e i n g " t h a t an i n d i v i d u a l be g i v e n an
opportunity for a hearing before he is deprived of any
significant property interest. Boddie v. Contzecticut, 4 01
U.S. 371, 379, 28 L.Ed.2d 113, 91 5.Ct. 780 (1971)
(emphasis in original) ; see Bl v. Bursoiz, 402 U . S . 535,
el
542, 29 L.Ed.2d 90, 91 S.Ct. 1586 (1971). This principle
requires "some kind of a hearing" prior to the discharge
of an employee who has a constitutionally protected
property interest in his employment. Board o Regents v. Rotlz ,
f
408 U.S. at 569-570, 33 L.Ed.2d 548, 92 S.Ct. 2701; P e y
v. Sindemaizn, 408 U.S. 593, 599, 33 L.Ed.2d 570, 92 s.ct.
2694 (1972). As we pointed out last Term, this rule has
been settled for some time now. Davis v. Sclzerer, 468 U.S.
183, 192 n. 10, 82 L.Ed.2d 139, 104 S.Ct. 3012 (1984);
id., at 200-203, 82 L.Ed.2d 139, 104 S.Ct. 3012 (BRENNAN,
J., concurring in part and dissenting in part) . Even
decisions finding no constitutional violation in
termination procedures have relied on the existence of
some pretermination opportunity to respond.
The essential requirements of due process, and all that
respondents seek or the Court of Appeals required, are
notice and an opportunity to respond. The opportunity to
present reasons, either in person or in writing, why
proposed action should not be taken is a fundamental due
process requirement.
Loudemtill, 470 U.S. at 542, 546.
For Medicine Horse, his source of livelihood was at stake. A
job he had performed for four and one-half years was on the line.
The possibility of future employment had to have been adversely
affected by the circumstances of his discharge.
It does not seem like too much to require that before that
discharge he be given notice of the reasons and an opportunity to
respond.
In this case, I conclude that Medicine Horse had a property
interest in his employment and that, therefore, he was entitled to
notice of the charges against him and an opportunity to respond to
those charges prior to his termination as an employee. Since the
County Superintendent, State Superintendent, and District Court
have all denied Medicine Horse's petition based on what I conclude
to be a misapplication of the Constitution, I would reverse the
District Court.
I concur in the foreqcling dissent of Justice Trieweiler.
December 10, 1991
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:
Emilie Loring
Hilley & Loring
500 Daly Ave.
Missoula, MT 59801
James L. Vogel
ATTORNEY AT LAW
P.O. Box 525
Hardin, MT 59034
Beda Lovitt
Chief Legal Counsel
Office of Public Instruction
Helena, MT 59620
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA
BY: & \.&A