Crenshaw v. Bozeman Deaconess Hospital

                                    No. 84-128

               IN THE SUPREME COURT OF THE STATE OF MONTANA

                                       1984




SHIRLEY CRENSHAW,
                Plaintiff and Respondent,


BOZEPllAN DEACONESS HOSPITAL, EDWLN E. DAHLBERG,
Administrator and RUSSELL NIELSEN,
                Defendants and Appellants.




APPEAL FROM:    District Court of the Eighteenth Judicial District
                In and for the County of Gallatin,
                The Honorable Thomas Olson, Judge presiding.

COUNSEL OF RECORD:

        For Appellant:
                Berg, Coil, Stokes & Tollefsen; Ben E. Berg, Jr.
                argued, Bozeman, Montana

        For Respondent:
                Goetz, Madden   &   Dunn; James Goetz argued, Rozeman,
                Montana



                                      -
                                      Submitted:   September 27, 1984
                                        Decided:   December 6, 1984


      . .
Filed:
               ,.4
                .8




                                      Clerk
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.


       Bozeman Deaconess Hospital appeals from a judgment on a
                                                             .

jury verdict entered by the District Court of the Eighteenth
Judicial District of the State of Montana, in and for the
County of Gallatin, in favor of respondent, Shirley Crenshaw,
on    her    claims    for    relief     from      the    termination     of    her
employment.
       On December 1, 1981, Crenshaw commenced employment with
the Hospital as a respiratory therapist.                   Prior to that time,
she    had     been     employed       by     an    independently        operated
respiratory therapy department which contracted services to
the Hospital.         The department was purchased by the Hospital
on December 1, 1981.           Crenshaw worked for the Hospital until
January 8, 1982, at which time she took a leave of absence
until February 8, 1982.               After returning to work, Crenshaw
was employed until March 12, 1982, when she was discharged.
       Subsequent        to    the     take-over         of   the      respiratory
department by the Hospital, two orientation meetings were
held with employees of the respiratory therapy department.
The employees were            given    information regarding salaries,
benefits and formal orientation.                The employees were given a
personnel policy manual.           A provision in the manual provided:
"You    are    on     probation      during     the      first   500    hours   of
employment.         Any employee may be discharged without notice
during the probationary period."                   Both parties concur that
Crenshaw had not completed the 500 hours of probationary
status at the time of her discharge on March 12, 1982.
       The immediate dispute began in the late hours of March
11, 1982.      Three nurses on duty in the intensive care unit.
complained to their supervisor, Terry Knohle.                       A meeting was
held between Terry Knoble, the three nurses, Russell Nielsen,
the personnel director, and Bill Kirtley, the acting head of
the respiratory therapy department.           Following the meeting, a
discharge    memorandum      was    prepared       directing     Crenshaw's
discharge.     The discharge document charged Crenshaw with:
              "Insubordination;
               "disrupting the continuity of care;
              "continually getting            in    the    way   of
              patient care;
               "disorderly conduct;
              "unsatisfactory work performance;
              "violation of safety and/or health rules;
              and
              "breach of confidentiality."
      The testimony reveals, on the night of March 11, 1982,
Crenshaw was not at home when the Hospital attempted to reach
her at 10:30 p.m.     That evening Crenshaw had been visiting a
former patient.     Crenshaw's husband telephoned her to tell
h . e r that the Hospital had called.         Crenshaw telephoned the
Hospital and was      told    that    she would be needed at the
Hospital later that evening.          Crenshaw immediately departed
to the Hospital.     The former patient's daughter, Berna-Dean
Hennessey, drove her to the Hospital.              Hennessey remained at
the Hospital for a number of hours.            Related to Hennessey's
presence,    the   discharge       document    charged     Crenshaw   with
"breach of confidentiality."          The Hospital contends a breach
of   confidential     information        resulted         when   Hennessey
accompanied Crenshaw to the Hospital lab.             While Crenshaw ran
a separate errand, Hennessey waited for a blood-gas report
and delivered it to the ICU.           Crenshaw contends the report
was not readily comprehensible to a lay person.                  Hennessey
testified:
                 " (a) she did not examine the contents of
                 the slip, (b) that upon arriving at the
                 intensive care unit she put her hand
                 inside the curtain and handed the slip to
                 someone tending to patient care, and (c)
                 that she did not at any time view the
                 patient. "
      The "insubordination" charge stemmed from the nurses'
allegation that Crenshaw attempted to perform ABG's (arterial
blood gases).         This fact is disputed not only by Crenshaw,
but by the nurses and doctors present.            There is question as
to   whether     or    not   Hospital    policy    forbid       respiratory
therapists from doing ABG's.
      The discharge document also accused Crenshaw of not
performing      "the   respiratory   therapy      task    of    suction   as
needed."     Again there was a dispute as to whether suctioning
was called for.         The nurses testified that the suctioning
should have been performed for the sake of appearance of the
patient.        However, one of the physicians testified that
suctioning was not required "that it could have been a waste
of time    . . .       with the disconnection of the ventilator
necessary to suction the patient."
      The three nurses present during the shift, also charged
that Crenshaw was disrupting the continuity of patient care.
As a. result, Crenshaw was accused of "endangering pa.tient
well-being."      The nurses testified that Crenshaw repeatedly
answered the telephone, read electrocardiogram monitors and
distracted the nurses by commenting on the irregular cardiac
display    on    the monitors.       The    testimony regarding this
allegation is in conflict.        Two physicians present during the
controversial      shift     testified     that   th.ey   found     nothing
deficient about Crenshaw's performance.              Also, one of the
nurses in attendance during part of the shift, confirmed that
there was no misbehavior on Crenshaw's part.                   Finally, the
discharge document states that Crenshaw had been subject to
previous verbal counselings.             It was established     at the
trial, however, that this was false and that Crenshaw had not
been subject to previous disciplinary action by the Hospital.
        The following morning, Crenshaw was called into the
Hospital.      Crenshaw was given the disciplinary discharge
document     and   was   advised    to   see   the   administrator   the
following Monday.        On Monday, March 15, 1981, Crenshaw met
with the administrator, Edwin Dahlberg.          He informed her that
he   would   review the matter, the administrator conducted
interviews of those present in the intensive care unit during
the morning in question.            The administrator affirmed the
discharge in a letter to Shirley Crenshaw, dated March 15,
1981.      Crenshaw contends that the administrator failed to
interview all of the staff members, even though he was aware
that they had been present during the controversial shift and
that the charges were strongly contested.
        After her discharge, Crenshaw applied for unemployment
compensation       benefits.       Crenshaw    alleges   the   Hospital
informed the Bozeman Job Service indicating that she had been
discharged for unsatisfactory performance and for endangering
patient well-being.        As a result, Crenshaw was unable to
procure employment in the medical community in Rozeman.              She
encountered difficulties because of a lack of references from
her previous employer.         In January, 1983, she and her husband
were forced to close his construction business and move to
Spokane.      After two months of job seeking, she has been
employed part-time and full-time at various jobs.
        Crenshaw contends the Hospital acted with malice: (1)
by lodging and sustaining false charges against her; and (2)
by tampering with her personnel file.                Crenshaw claims a
certificate authorizing her to perform arterial blood gases
was removed from the file.
         Crenshaw filed the present action on December 10, 1982,
alleging that she had been wrongfully discharged from her
employment with Bozeman Deaconess Hospital and sought damages
under     several theories.         Crenshaw    alleged   the     Hospital
breached the implied covenant of good faith and fair dealing.
She further alleged the actions of appellants were negligent
and     were   malicious   and/or     in   wanton   and/or   in    willful
disregard of her rights entitling her to exemplary damages.
The complaint was amended to include a fourth count alleging
a separate tort in violating the duty of good faith owed to
her.     A jury trial was held on November 28, 1983.              The jury
found for Crenshaw and awarded her $125,000 in compensatory
damages and exemplary damages in the amount of $25,000.
         The issues raised on appeal are as follows:
         (1) Whether an at-will probationary employee is covered
by the implied covenant of good faith and fair dealing.
         12) Whether the record sustains a separate action based

on negligence.
         (3) Whether the trial court abused its discretion in

permitting an expert witness to testify on the question of
breach of duty on either wrongful discharge or fair dealing.
         (4) Whether    the   award    of punitive damages upon         a
finding of negligence and/or breach of implied covenant of
good faith and fair dealing was proper.
        The Hospital submits that the covenant of good faith
and fair dealing does not apply to a probationary employee,
a.nd that the trial court erred in giving an instruction as
such.
        The    court   gave the     following instruction over        the
Hospital's objection:
                 "Instruction 14. You are instructed that
                 Bozeman Deaconess Hospital,
                 classify certain of its employees as
                                                     . . .
                                                      may
             probationary    employees    and   these
             employees may be discharged if they do
             not measure up to the Hospital standards
             during the probationary period. However,
             even these employees are owed a duty of
             good faith and fair dealing and the
             Hospital must comply with its written
             policies concerning these employees."
The court refused the Hospital's proposed instructions no. 41
and no. 42 which consecutively stated:
             "Instruction 41. You are instructed that
             plaintiff    Shirley   Crenshaw   was   a
             probationary    employee   of   defendant
             Bozeman Deaconess Hospital and tha.t the
             purpose of a probationary status is to
             provide a brief period in which to
             measure the employee's ahility to perform
             her job before granting her a degree of
             job security. If the employer feels that
             the employee is not measuring up during
             this probationary period, it can dismiss
             that employee without procedural due
             process.
             "Instruction 42. You are instructed that
             if you find from the evidence that
             plaintiff    Shirley   Crenshaw   was   a
             probationary    employee   of   defendant
             Bozeman Deaconess Hospital and that the
             purpose of a probationary status is to
             provide a brief period in which to
             measure the employee's ability to perform
             her job before granting her a degree of
             job security, then you are instructed
             that if the employer feels that the
             employee has not measured up during the
             probationary period, it can dismiss that
             employee without any procedural due
             process. "
      The doctrine of implied covenant of good faith and fair
dealing in employment contracts was established in Gates v.
Life of Montana (1982), 196 Mont. 178, 638 P.2d 1063, (Gates

- , brhere this Court stated: "A covenant of good faith and
I)
fair dealing was implied in employee contracts."   This Court
went a step further in Gates v. Life of Montana (Mont. 1983),
668 P.2d 213, 40 St.Rep.   1287, (Ga.tes- holding that the
                                        11)

covenant arises out of the employment relationship and it
exists "apart from, and in addition to, any terms agreed to
by the parties."
        The Hospital argues to the Gates rule there should be
an exception, and the probationary employee is the exception.
The Hospital states the doctrine of good faith and                                     fair
dealing has the purpose of enhancing job security for the
employee.          But the probationary employee has little prospect
of    job     security until his trial period                      has elapsed          and
attains the status of a permanent employee.                               The Hospital
proposes that the final answer to this issue is found in
Storch v. Board of Directors (1976), 169 Mont. 176, 545 P.2d
644.         In Storch, the plaintiff was a probationary State
employee.          The court held the purpose of the probationary
status is to provide the employer with a trial period in
which    unsatisfactory           employees may         be     dismissed         without
procedural due process.
        In light of the Storch decision, the hospital submits
it     was     clear     error     to     instruct      the        jury     that       even
probationary employees are owed a duty of good faith and fair
dealing.       We find the Storch decision cannot withstand the
scrutiny of the good faith and fair dealing mandate.                               It was
Gates - and not the Storch decision which gave rise to the
      I
doctrine of implied covenant of good faith and fair dealing.
Furthermore,         Storch      does     not    even    mention          the    implied
covenant        of      good      faith     and        fair        dealing.            The
plaintiff-employee in Storch protested his discharge on the
grounds of constitutional due process and right to privacy,
not on lack of good faith and fair dealing as is the case in
the     present        ma.tter.         Accordingly,          we     hold       even    in
probationary         employment relationships, the employer still
owes his employee a duty of good faith and fair dealing under
Gates -
      I.
        In     a     recent    decision,        Dare    v.     Montana       Petroleum
Marketing Co. (Mont. 19841,                     P.2d           ,   41 St.Rep. 1735,
Justice Weber defined the parameters of the covenant of good
faith and fair dealing doctrine:
            "Whether a covenant of good faith and
            fair dealing is implied in a particular
            case,     depends      upon     objective
            manifestations by the employer giving
            rise to the employee's reasonable belief
            that he or she has job security and will
            be treated fairly.        . .the implied
            covenant protects the investment of the
            employee who in good faith accepts and
            maintains employment reasonably believing
            their job is secure so long as they
            perform their duties satisfactorily, such
            an employee is protected from bad faith
            or unfair treatment by the employer."
     We   find   the   following   testimony   from   the   record
constitutes objective manifestations by the Hospital giving
rise to Crenshaw's belief that she had job security:
            "1. That Crenshaw had worked for the
            respiratory therapy department under Dr.
            Shaw since approximately April, 1980.
           "2. That all of her respiratory therapy
           work had been done during that period at
           Sozeman Deaconess Hospital, and her
           duties, salary, and procedures remained
           essentially unchanged when the Hospital
           finally took over the Department.
            "3. That Crenshaw was led to believe that
            she and. other long-term staff would come
            on board with permanent full-time status.
           "4. That the Hospital provided permanent,
           full-time employees with the privilege to
           join the Hospital group health insurance
           pr0gra.m. Since the Hospital considered
           Crenshaw qualified for a health insurance
           program which only permanent employees
           could join, the Hospital must have
           considered her a permanent employee. In
           addition, the Hospital had. a policy of
           allowing permanent employees      a   ten
           percent discount for medical services at
           the Hospital. Crenshaw received surgical
           treatment at the Hospital in January,
           1982, and she received a ten percent
           permanent employee discount.
            "5. That the Hospital personnel policy
            requires an evaluation meeting between
            the   probationary   employee   and  his
            supervisor at the end of the 500 hour
            probationary period.    Crenshaw and two
            other employees testified that they had
            no such evaluation meeting at the end of
             500 hours after the merger with Bozeman
             Deaconess Hospital.
             "6. That there was no reference to                       her
             probationary   status   in    either                     the
             discharge    memorandum    or    in                      the
             Administrator's letter sustaining                        the
             discharge."
Crenshaw had reason to believe her job was secure.                          As an
employee she was entitled to the protection of good faith and
fair dea1in.g by the Hospi.ta1.
      Appellant next claims error by the court's refusa-l of
section 39-2-503, MCA, instruction of the "at will" statute.
That instruction stated:
                 "You   are    instructed   that   section
                 39-2-503, MCA provides that employment
                 having   no    specified  term   may   be
                 terminated at the will of either party on
                 notice to the other.     You are further
                 instructed that the foregoing statute
                 does   not   require   notice prior    to
                 termination."
      The Hospital- contends that the Gates - decision of
                                            I1

good faith and fair dealing is abrogated by the enactment of
the "at will" statute.             The Hospital primarily relies on a
decision    rendered     by       this    Court     in    1981,       Reiter   v.
Vellowstone County, Montana              (Mont. 1981), 627 P.2d 845, 39
St.Rep.    686, where        we    held    that    an    implied       employment
contract cannot circumvent the at-will statute.                       In Ga.tes I,
                                                                               7




Reiter was clearly distinguished,            ". . . the     issue there, [in
Reiter], was whether an employee at-will had                          a property
interest    in    continued        employment      and    was     entitled     to
procedural due process prior to termination.                    . .   We did not
reach or    decide     the       good    faith    and    fair dealing issue
presented, here.     . .     "    Gates v. Life of Montana Ins. Co.,
supra, 638 P. 2d at 1066.          The same holds true in the present
case, as Crenshaw is alleging a breach of covenant of good
faith and fair dealing.
        We hold that the "at-will" sta-tute, section 39-2-503,
MCA, is very much alive.               The Gates - decision does not
                                                 I
preempt the statute.         There is no legitimate precedent for an
exception for probationary employees.                Therefore, Crenshaw
even as a probationary employee was owed a duty of good faith
                           I.
under the mandate of Gates -            This requirement of good faith
and fair dealing does not conflict with section 39-2-503,
MCA,    but   merely      supplements     it.       Employers    can     still
terminate untenured employees at-will and without notice.
They simply may not do so in bad faith or unfairly without
becoming liable for damages.            The Hospital's notification to
the Bozeman Job Service of Crenshaw's unsatisfactory work
performance deprived her of employment in the 1oca.l medical
community.        This was an act of bad faith.             The charges and
a.llegations in the discharge memorandum were false.                      The
charges were serious and resulted in Crenshaw losing her
employment as well as jeopardizing her career.                  This was an
act of bad fa-ith. The record shows that Crenshaw's discharge
was motivated by bad faith and warrants recovery for breach
of implied covenant of good faith and fair dealing under
Gates -
      I.

        We    therefore      uphold,    instruction     14     that     stated
probationary employees "         . . . may      be discharged if they do
not     measure    up   to    the     hospital    standards     during    the
probationary period.         However, even these employees are owed
a duty of good faith and fair dealing.                . .   " was properly
given by the District Court.
        The Hospital next claims error by               the trial court
refusing to give defendant's proposed instruction involving
wrongful discharge: "It is only when public policy has been
violated in connection with the wrongful discharge that the
cause    of   action      arises. "      The     Hospital    contends    that
violation of public policy is a necessary element of the
doctrine of good faith and fair dealing which the jury should
have       been    allowed   to    consider.       In    support    of    this
contention, the Hospital cites Nees v. Hocks (Or. 1975), 536
P.2d 512; Peterman v. International Brotherhood of Teamsters
(1959), 174 Cal.App.2d 184, 344 P.2d 25.
       The Hospital is correct that this Court adopted the
concept of implied covenant of good faith and fair dealing
from the New Hampshire Supreme Court decision of Monge v.
Beebe Rubber Co.         (1974), 114 N.H.       130, 316 A.2d      549.   The
decision in Monqe was later limited by the New Hampshire
Supreme Court to situations where the termination violated
public policy.         Howard v. Door Woolen Co.          (1980), 120 N.H.
295, 414 A.2d        1273.    However, the Hospital may not assume
that by adopting the earlier New Hampshire decision, this
Court will accept the imposed limitation as well.
       We have repeatedly stated that a showing of public
policy violation is required only to sustain an action for
wrongful discharge.          "It is only when public policy has been
violated in connection with the wrongful discharge that the
cause of action arises            . . .   "    Keneally v. Orgain (Nont.
1980), 606 P.2d         127, 37 St.Rep.         154;     See also Dare v.
Montana      Petroleum Marketing Co., supra.            The present case is
not    a    case    which    involves     an   allegation    of    "wrongful
discharge."        The central issue here, is whether there was a
breach of duty of good faith and fair dealing.                By virtue of
Gates - and Gates - this Court recognizes that liability is
      I           11,

not limited to those cases in which a public policy violation
has been alleged.
       The Hospital next claims error by the trial court's
instruction defining negligence.               The Hospital arques that
negligence is not an issue in the breach of a covenant of
good     faith    and    fair     dealing.       That    negligence         is   not
synonymous with bad faith.                Thompson v. State Farm Mutual
Automobile Insurance (1972), 161 Mont.                  207, 505 P.2d            423;
also Gram v. Liberty Mutual Insurance Co.                    (Mass. 1981), 429
N.E.2d    21.
         Crenshaw responds the Hospital's failure to interview
all of the witnesses present on the night in question wads
negligent as a theory separate and distinct from the theory
of breach of good faith and fair dealing.                    Crenshaw offered
evidence        which    raised     the    question     of      the      Hospital's
negligence:
         (1) the former acting director testified l e had not
                                                   z
interviewed all of the appropriate witnesses;
         (2) the administrator admitted that he had failed to
interview key witnesses and that he was not sure he had
interviewed a physician before sustaining the discharge; and
         (3) Doctor       Vinton,     Crenshaw's      expert      on     personnel

management, conceded that "when the discharge was made                          ...
the allegation had          not been properly investigated by the
Hospital administrator."
         In light of       the     foregoing, we        find the         Hospital's
conduct showed a "want of attention to the nature or probable
consequence of the act or omission" and that their conduct
fell     below     the    "standard       established      by     1-aw    for    the
protection of others against unreasonable risk."                         Flansberg
v. Montana Power Co. (1969), 154 Mont. 53, 460 P.2d 263; Mang
v.   Eliasson      (1969), 153 Mont.            431, 458 P.2d          777.      The
allegation        of     negligence       was    clearly        established       in
respondent's complaint.           We hold the trial court committed no

error in issuing the instruction to the jury.
      The Hospital raises as its next issue $or appeal,                    the
testimony of Crenshaw's expert on personnel management, Dr.
Karen Vinton.         Dr. Vinton testified to the following:

                  "1. That there were serious weaknesses in
                  the actions taken by the Hospital in
                  discharging Shirley Crenshaw;
                  "2. She testified as to the importance of
                  giving    an    accused   employee    the
                  opportunity to defend herself in a non
                  stressful    situation;   of    following
                  established disciplinary procedures for
                  investigation and appeal; of carefully
                  documenting disciplinary matters; and of
                  maintaining the appearance as well as the
                  reality of fairness;
                  "3. That the Hospital failed to properly
                  investigate the charges against her;
                  "4. That     Ms.  Crenshaw would     have
                  difficulty finding subsequent employment;
                  "5. That in her opinion, the discharge of
                  Ms. Crenshaw was unjustified."
      The qualifications of the expert are well-documented in
the record.           Dr. Vinton received her Nasters in Business
Administration and her PH.D in Human Resource Management and
Organizational Behavior.              She is Assistant Professor of
Business Administration at Montana State University. She is a
member      of        the     American       Associates     of     Personnel
Administrators.         Her experience is extensive.         She has acted
as a consultant to business and research firms.                        She has
taught human          resource management to hospital management.
      The Hospital moved to exclude her testimony on two
grounds: (1) the issue was not the proper subject to expert
opinion; and (2) her testimony would constitute comment and
argument going to the ultimate issue of this action.
      The Hospital contends the testimony of Dr. Vinton has
invaded     that      field    of   common    knowledge    to    the    severe
prejudice        of    the    defendants.         The     employer-employee
relationship is within the common knowledge of the average
layman.     The Hospital goes on to state all persons have been
exposed to such a relationship.
         The Hospital primarily relies on Ployhar v. Board of
Trustees of Missoula (1980), 187 Mont. 363, 603 ~ , 2 d1226.
There, parents of a son killed in a heavy equipment operation
accident brought a negligence action against school board.
An expert testifying for the defendant was allowed to give
his opinion as to the cause of the industrial accident.        We
affirmed the trial court order, stating: "opinion evidence
concerning the cause of an accident is admissible only if the
subject matter is beyond the ordinary understanding of the
jury."     We held there was no need for such testimony.       In
Ployhar,    the   accident   was   simple.   The   evidence   was
sufficient to allow the jury to make an independent judgment
as to the ultimate cause of the accident.      The instant case
is not a scenario of simple fa.cts. Fault arising from breach
of implied covenant of good faith a.nd fair dealing is not
easily comprehensible to the average person.       Dr. Vinton's
testimony was based on professional expertise and experience
which the individual jury members were unlikely to possess.
Her testimony assisted the trier of fact by providing the
jury with information and a prospective beyond the common
experience of a lay juror.     State of Montana v. Howard (Mont.
1980), 623 P.2d 1226, 38 St.Rep. 1980, see also Demarais v.
Johnson (1931), 90 Mont. 366, 3 P.2d 283.
     The admissibility of expert testimony is governed by
Rule 702, Montana Rule of Evidence:
              "If scientific, technical, or other
              specialized knowledge will assist the
              trier of fact to understand the evidence
              or to determine a fact in issue, a
              witness qualified as an expert by
              knowledge, skill, experience, training,
              or education may testify thereto in the
              form of an opinion or otherwise."
Contrary to the Hospital's reading of this rule, Rule 702
does not exclude expert testimony on all matters about which
jury members have any knowledge or experience.        This Court
has long passed the days of when only experts in the field of
medicine were allowed to testify.      We must continue with the
spirit of the new rules of evidence and recognize individuals
in other fields, especially the complex domain of            labor
relations are a new legion of experts.           In Barmeyer v.
Montana Power Co. (Mont. 19831, 657 P.2d 594, 40 St.Rep. 23,
this Court stated:
             " . . .  Rule 705, Mont. R. Evid. , mandates
             that the opinion of a qualified expert is
             admissible, and if opposing counsel
             believe the opinion is not founded on
             sufficient data, cross-examination is the
             shield to guard against unwarranted
             opinions    . . .
                             Stewart v. Casey (1979),
             182 Mont. 185, 595 P.2d 1176."
The Hospital's counsel vigorously cross examined Dr. Vinton
to determine the extent of her knowledge with respect to
hospital   management,     j-n   particular,   personnel    policy
governing probationary employees.
             "Q. [By Mr. Berg] Well now, 1-et's take it
             in general, do you know is there a
             distinction, generally speaking, between
             the   procedure   for  dismissal of      a
             probationary as distinguished from a
             permanent employee?
             "A. It usua.11~ depends on the company's
             written   procedures,    but  frequently
             probationary employees are not afforded
             as much as permanent full-time employees
             in the discipline procedures.
             "Q.  Would it be fair to say that a
             probationary employee m a y be discha.rged
             without reason?
             "A. There are companies that do that,
             yes.
             "Q. I see. Do you know what the policy of
             the Bozeman Deaconess Hospital is with
             regard to that policy?
             "A. As      I read it, in the personnel
             policy,     it stated that probationary
              employees     can   be   discharged   without
              notice.
              "Q. I see.     So, in Rozeman Deaconess
              Hospital, that's one of the institutions
              that make it clear, distinguishes between
              probationary and permanent employees?
              "A. I don't think they make it a very
              clear distinction --
              "8. They do with notice?
              "A. As far as notice, yes.

              "Q. Well, they do as far as notice is
              concerned.
              "A. As far as notice, yes.
              "Q. Do you know what an at will employee
              is?
              "A. Yes.

              "Q. What is an at will employee?

              "A. Well, at will the term at will was
              developed through some legal people
              basically it means that an employee or an
              employer can terminate an employment
              agreement at any time for any reason with.
              no notice."
The trier of fact's experience does not extend to Hospital
disciplinary guidelines, much less the ability to evaluate
the propriety of such guidelines.          We   find Dr. Vinton's
perspective assisted the jury to understand the evidence and
ultimately the breach of implied covenant of good faith and
fair dealing question at issue.          Further, the Hospital's
counsel moved in limine to exclude Dr. Vinton's testimony.
The argument was presented to the trial judge.          The trial
court in its broad discretion admitted the expert testimony.
The trial court's order will not be disturbed on appeal in
the   absence of    a   clear   showing of a manifest abuse of
discretion.   Yerkich v. Opsa (1978), 176 Mont. 272, 577 P.2d
857; Tigh v. College Pa.rk Realty Co. (1967), 149 Mont. 358,
427 P.2d 57; Ployhar v. Board of Trustees (1980), 187 Mont.

363, 609 P.2d   1226, We find no abuse of discretion here.
        This Court recognized for the              first time that the
breach of an implied covenant of good faith and fair dealing
was a tort for which punitive damages may be awarded.                         In
Gates v.       Life of Montana       (Mont. 1983), 668 P.2d           213, 40
St.Rep.    1287 we stated: "Breach of the duty owed to deal
fairly and in good faith in the employment relationship is a
tort     for     which    punitive    damages     can    be     recovered     if
defendant's conduct is sufficiently culpable."                   The Hospital

submits it was clear error to instruct the jury on punitive
damages.       Crenshaw was discharged on March 12, 1982.                   The
Gates - decision was decided by this Court August 5, 1983.
      I1
The Hospital advamces it was error to assess punitive damages
for tortious conduct that was an unknown cause of action at
the     time     of   plaintiff's    discharge.         We    disagree.      We
established the duty of good faith and fair dealing arising
out of an employment agreement in Gates -
                                        I.                   The Hospital was
put on notice to deal in good faith at the time the alleged
incident took place.         Moreover, negligence on the part of the
Hospital's investigation was yet another basis of Crenshaw's
cause of action.         Section 27-1-221, MCA, provides:

                  "In any action for a breach of an
                  obligation not arising from contract
                  where the defendant has been guilty of
                  oppression, fraud or malice, actual or
                  presumed, the jury, in addition to the
                  actual damages, may give damages for the
                  sake of example and by way of punishing
                  the defendant. "
Under     this    statute, it is necessary          to prove more           than
ordinary negligence; such willful disregard of duty amounting
to actual or implied malice must be shown.                   Spackman v. Ralph
M. Parsons Co. (1966), 147 Mont. 500, 414 P.2d 918; Cashin v.
Northern Pacific Ry. Co.            (1934), 96 Mont. 92, 28 P.2d 862.
        Crenshaw asserts the maliciousness of the Ilospital's
conduct stemmed          from the Hospital removing the              "arterial
blood     gas"   certificate   from   her    personnel   file   and
fabricating charges against her.        The record sustains that
the Hospital failed to properly investigate the charges.         In
a medical community such as Bozeman, charges of such a nature
should not have been raised without careful consideration of
the     consequences   to   one's   professional   livelihood   and
reputation.      This, we hold, is the degree of culpability the
Gates - decision was to prevent.
      11,

        We find the evidence set forth by Crenshaw presented an
issue of punitive damages.      The issue was properly submitted
to the jury.
        The judgment of the District Court is affirmed.




We concur:
                                         i
 3 ~4.pd&
     4
Chief Justice
                                      ~~J




Justices


Mr. Justice L. C. Gulbrandson:
        I specially concur in the result.
                                              /I


                                         I

                                        Justice