HAFNER v MT DEPT OF LABOR AND IND
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96-105 NO. IN THE SUPREMECOURT OF THE STATE OF MONTANA 1996 GREGGA. HAFNER, MONTANADEPARTMENT OF LABOR AND INDUSTRY and DUBRAY LAND SERVICES, INC., Defendants APPEAL FROM: ! : 5:~; ., ~L,T;i>~;.'"I,,:;'$<;: :~;r:~':,:w c>s: ,,,, @f&g & pd.,,;'$ j ::,+ and Respondents. District Court of the Thirteenth Judicial District, In and for the County of Yellowstone, The Honorable G. Todd Baugh, Judge presiding. COUNSEL OF RECORD: For Appellant: Michael G. Eiselein; Lynaugh, & Eakin, Billings, Montana Fitzgerald, Eiselein For Respondents: Melanie Helena, Calvin A. Symons, Department Montana J. Stacey; Stacey Submitted Filed: of Labor & Industry, & Walen, Billings, Montana on Briefs: 9, 1996 Decided: August December 10, 1996 Justice W. William Appellant, the a insurance delivered Gregg Hafner Thirteenth affirming Leaphart Judicial Board We restate (Hafner), Labor the issue Court, Appeals' We affirm Did Hafner's of interest unemployment appeals District of benefits. the Opinion from the decision Yellowstone denial the District raised of the Court. of of County, unemployment Court. by Hafner as follows: failure to notify his employer misconduct constitute for compensation benefits? of a conflict purposes of BACKGROUND This case Department) appeals denial out of of Court's (the Board) benefits decision denial of to Labor's Hafner. affirming of unemployment was hired by respondent, as a Right-of-Way (DuBray) agent Way agent rights for for DuBray, various as a Right-of-Way As part Hafner's (the Hafner the Board of benefits on the purchasing of Hafner's to a training program, Additionally, Hafner Association. Hafner took and "Rules The Association courses adheres part: "Members 2 position program. and Conduct." Right to a Code of Ethics, Ethical easement in "Ethics of Professional was a member of the International of Conduct. in included Inc. As a Right-of- In preparation of Way Profession" provides Land Services, DuBray sent Hafner agent, and Standards DuBray in March of 1990. duties companies. of the training the Right Ethics Department of misconduct. Hafner Rules the unemployment from the District Labor Appeals' basis arises of Way Ethical Rule No. 6 of the Code of pledge to maintain a high professional relationship Standard Two of Professional" the with his/her "Standards provides of client Practice or for the employer." Right of Way in part: FULL DISCLOSURE Full disclosure of all pertinent information requires, without reservation, disclosure to the client, employer or public, all relevant information a member possess [sic] with regard to the member's employment. Interpretation: 1. Full disclosure to the client/employer means disclosure of: (including, but not of interest (a) conflicts limited to such items as personal, financial, emotional, employment; prior or current, or others). While employed probationary basis, pre-requisite to physical continued Hafner pending access his pending civil on a (Conoco). As a underwent results of terminate contended a Hafner's Hafner's that Conoco's and he filed a claim Commission. several years Hafner's while he DuBray. the Human Rights assigned Hafner Commission complaint to DuBray that Conoco. to Conoco's and was, Hafner to Hafner for for Inc. the decided Conoco continued did not advise against receiving the Montana Human Rights to work for DuBray Conoco, him was discriminatory against In 1992, while applied Conoco, he began working. Conoco with suit with Conoco to terminate against pending, After examination, decision a job with employment employment before civil given examination. physical Hafner by DuBray, work on the Conoco account. he had a Human Rights In handling the Conoco account, files and a Conoco checking suit, Hafner continued 3 to was still Complaint Hafner account. work on the had Despite Conoco account DuBray without only informing became aware of the Billings newspaper reported court's granting of Hafner's claim 886 P.2d 947. terminate follows DuBray for Hafner this conflict interest. this that in December of 1994, Court Hafner for had reversed Conoco v. Conoco (1994), became aware of the suit, by letter of suit summary judgment trial. When it of dated December 28, when a the trial and remanded 268 Mont. DuBray decided to 1994, as stating : Gregg Hafner This letter is your notice that you are terminated for cause from your employment with DuBray Land Services, Inc. effective today, December 28, 1994. You will be given today two checks for your net pay for salary through today andvacation pay accumulated through today. The reason for your termination for cause is that you are the Plaintiff in a lawsuit entitled Hafner v. Conoco, Cause No. 93-552 in Yellowstone County District Court, which lawsuit has only become known to this company through a newspaper article published in The Billings Gazette on Saturday, December 17, 1994, a copy of which is attached. This newspaper article was first delivered to me yesterday, December 27, 1994. In the meantime, for approximately two years you have been working on Conoco projects for DuBray Land Services, Inc. without informing the company of your lawsuit against Conoco. This is an untenable disregard for the interest of your employer and cannot be tolerated. By the end of work today you must have all of your personal belongings removed from the premises of DuBray Land Services, Inc. In addition, you must turn in the company automobile and all sets of company car keys, all company credit cards and telephone cards, all company files in your possession (those for Conoco and otherwise), the Conoco checkbook, all company equipment and supplies, and your set of keys to the company office building. When you have turned over this property and cleaned out your personal property you will be given your checks for salary and vacation pay. Thank you. 4 396, Following for his unemployment was denied Hafner benefits on the then filed Hafner from DuBray, with basis that request discharged for the Hoard. for Next, judicial Thirteenth Yellowstone County. decision. decision denial Hafner of the The District has filed District the the Hafner filed Judicial instant that Board to denied 5 39-51- a request District affirmed appeal decision misconduct. determining pursuant Court Court's of unemployment request for After benefits ARM. the a claim Hafner's "misconduct," unemployment with filed he was terminated 2303, MCA, and § 24.11.460, review Hafner the Department. an appeal with had been Hafner's termination to for Courts, the Board's challenging affirm the the Board's benefits. DISCUSSION Did Hafner's of interest unemployment failure to notify his employer constitute misconduct for compensation benefits? A District Court's limited review by § 39-51-2410(5), of of a conflict purposes of a decision MCA, which of the Board is provides: In any judicial proceeding under 39-51-2406 through 39of the board as to the facts, if 51-2410, the findings supported by evidence and in the absence of fraud, shall be conclusive and the jurisdiction of said court shall be confined to questions of law. . . . In both 201, Connolly 734 P.2d v. Montana Bd. of Labor Appeals 1211, (1994) I 266 Mont. determination unemployment and Stine v. Western 83, 87, 879 P.2d 53, 56, this of "misconduct" benefits in the context "was a factual 5 question, (1987), Federal Court 226 Mont. Savings Bank held that the of an application properly left for to the appeal's referee Having P.2d at 1215. reverse Connollv "misconduct" below, of Connollv, and the Board of Labor Appeals." is hold that "misconduct" reviewed and stine this to a question of the question issue the fact extent and, of whether is a question is defined in the present that for the conduct of law which they this case, hold reasons rises 734 we that stated to the level Court reviews for correctness. Misconduct by § 24.11.460(l), ARM, and includes: or wanton disregard of the rights, (a) willful title, and interests of a fellow employee or the employer; (b) deliberate violations or disregard of standards of behavior which the employer has the right to expect of an employee; (c) carelessness or negligence that causes or would likely cause serious bodily harm to the employer or fellow employee; or (d) carelessness or negligence of such degree or recurrence to show an intentional or substantial disregard of the employer's interest. (Emphasis added.) In addition, § 24.11.461(1)(f), ARM, explains: acts are considered misconduct (1) The followings because the acts signify a willful and wanton disregard and interests of the employer or a of the rights, title, fellow employee. These acts include: . . . (f) violation of a company rule if the rule is reasonable and if the claimant knew or should have known of the existence of the ruleL.1 The question behavior, a of whether been careless question "misconduct" of fact. involves an employee or negligent, Whether has disregarded or violated those interpretation 6 "facts" and standards company rules then application of is constitute of the Rules Administrative reviewable by this Hafner or anyone against him for MCA. His that claim DuBray in of termination for entitled Hafner DuBray that work emphasizes of that interest conclusion interest, .'I Conoco while DuBray conduct employer illegal for or retaliate 49-2-301, assumes that Plaintiff is for in however, failing that to DuBray. also conduct as a his not. Rather, DuBray's and cannot letter disregard be tolerated." Failing can certainly advise Hafner labeled was an "untenable constitute for This to advise he continuing referee did your a lawsuit apparent at the same time of for statement, it he on the statement "The reason but behalf the appeals his Section When that Conoco, on claim He relies states: to pursue is presented you are the suing files while of interest interests the is not a an employer of a a disregard for the appeal is whether of the employer. As restated, while that of significance. conflict Hafner's which it sue. of the whole letter, for right to right v. Conoco . Hafner's distinction legal this sued Conoco. cause is Conoco of your a with of the issue termination not that conflict states his he was suing on is Conoco and that interfere having in the context was terminated to to exercising for is put against characterization letter and he has a constitutional else was terminated the Montana Court. argues discrimination of failure working The the question on Conoco files ethical rules of by this his pending to disclose presented litigation for DuBray, constituted a Right-of-Way 7 against agent Conoco, "misconduct." require full disclosure of advise employer his all conflicts regarding Conoco, was a violation his ethical duty rule employer, DuBray, conflicts of clients. failing while be fired against DuBray's as well to disregarded reasonable to as a violation was reasonable. expecting between training reveal client, of in standards constitutes be informed of and its 1990 made him fully of interest. In against litigation interests Hafner's employees conflicts pending the to its to work on the Conoco account § 24.11.460(l), Hafner arise DuBray of his willfully of in Hafner's obligation continuing disregard that failure agent. was justified to inform Hafner suit imposed upon Hafner interest his his Hafner's of company policy In addition, of interest. as a Right-of-Way The ethical aware of Conoco on behalf of of DuBray, DuBray. This misconduct under ARM. argues for failing that there to advise is no logic to holding DuBray of the suit that he could against Conoco since: Like it or not, DuBray is prohibited from doing anything about Gregg's suit against his customer. He may not tell Gregg to drop the suit. He may not "suggest" that Gregg choose between his job and his lawsuit. We submit that in the complete absence of even the suggestion of any wrongdoing on the part of Gregg, DuBray could not even take Gregg off the Conoco projects, because to do so would seriously limit Gregg's usefulness as a DuBray employee and could for that reason subject him to an increased risk of layoff or termination. Such treatment would "otherwise discriminate" against Gregg and would amount to retaliation under the plain language of MCA 492-301. We agree that, if Conoco in a timely Hafner fashion, had advised DuBray of his claim against DuBray would not have been justified in firing Hafner against or in having him choose between his job and his We do not, Conoco. have chosen to assign however, Hafner to non-Conoco already working accounts as DuBray had done with Hafner the start file the fact it pursuing that interest rules conflicts Court in stated, defuse he were does not, however, had a reasonable of interest the situation. Conflict to work prospectively; misses was not the employer situation or client. to prevent As the District the point. The fact damaged or offended, in the dark. when it take Hafner that, does not should arose so that appropriate change expectation employee had a conflict how to handle to to work the Conoco have DuBray would in-house action to any conflict. Hafner to a denial claim. pursue argues an "ethical and maintain to be necessary II, that denying him unemployment of his constitutional Specifically, violating Article its argument a position if employees. harm to employer DuBray of this in other That fact kept advised him to his continuing client having or, not from the justify could other are designed Hafner's retrospect, have been if decide from causing accounts reassign account, as the employer, DuBray could DuBray to his claim. DuBray, that Conoco was aware of the situation out that would be advised so that of points Conoco and had no objection while that on the agree claim Hafner rule" to pursue maintains infringed employment; to enjoy section right one of that upon his a right which "life's his amounts a discrimination termination for inalienable right this has held basic 3 of the Montana Constitution. 9 benefits Court necessities" to under In support of his argument, 287, Hafner 911 P.2d cites 1165. to Wadsworth v. State In Wadsworth, the Department of Revenue conflict violated plaintiff of interest employment to pursue contained 1173. in the his right Montana This Court not demonstrate a compelling interest thus right rule, to pursue life's 3 of the Montana In Rather, for termination basic violated necessities Wadsworth, Hafner Hafner necessities nor is it because, suit Conoco. and other confidential of DuBray Hafner's which disclose this terminate be him. informed inform standards of of the this The District of of his 24.11.460(l), Court's for DuBray expectation failure and had the right of to to to to willful reasonable to expect of ARM, and 5 24.11.461(1)(f), determination 10 account failure constituted employer a civil of interest Hafner's interest which the employer Section he pursued reason interest. conflict interests Conoco. knowledge, Hafner's a legitimate for to say he was a conflict be aware. of of section against DuBray had a legitimate conflict of behavior an employee. ARM. the did terminated DuBray's while created to created We hold that of DuBray disregard had a right conflict II, access to a Conoco checking information at constitutional accurate without to work on the Conoco account against 911 P.2d the State his claim he continued outside the conflict was not a discrimination was terminated a 911 P.2d at 1175. Wadsworth, pursuing that necessities under Article basic for basic applying to life's terminated life's Wadsworth and held that Constitution. contrast pursuing his precluding Wadsworth, interest 275 Mont. claimed rule Constitution. agreed with (1996), that Hafner's conduct amounted Stine, to misconduct § 39-51-2303(l), 879 P.2d at 56. Accordingly, We concur: -. under we affirm. I Justices d 11 MCA, was correct. Justice William I dissent. clearly E. Hunt, not allow, they that, principle example, (Mont. to the unequivocally for Hafner majority, however, that v. the context terminated very Inc. from for he was suing contends exactly what it says : that "[wlhen it is to that states, [Hafner's] in a lawsuit clearer. The to show that, statement failing fired . case. is not what the letter means no more, 12 Holeman some reason, for be apparent was 75, Hafner Such a conclusion Hafner for in this to attempt Conoco, but for letter rule could See, for the Plaintiff lengths that Conoco . . .'I The termination be presumed 265 Mont. It1 he reason says, principle Co. v. Yet, DuBray Nothing goes to great to me. a acknowledged (19941, legal [he is1 Conoco. " suing 904. English, that legal Insurance sensible of the whole letter, not status and statutes. Mutual may be what the letter The majority as general contracts letter cause is entitled was his We have repeatedly Alliance and in plain termination means. says. this dismissal would a document should 924 P.Zd 1315, 53 St.Rep. ignores The while it Farmers 1996), the majority that adheres when construing 718; further, own regulations termination Carbon County v. Dain Bosworth, P.2d and, and Conoco. usually what obvious followed. Hafner's against the dismissal in the absence of an ambiguity, this 874 Hafner's were correctly to mean precisely ignores which the Department's 1. The reason for plaintiff in a case Court opinion for reason a result if This dissenting. The majority stated countenances Sr. that put in is [Hafner] to advise was DuBray is not apparent and no less, because he than was the plaintiff in illegal a lawsuit under 2. There interest § 49-z-301, conflict of of In making were majority dictates the this between an actual but proceeded under is instead no difference In contrast, and a potential to make between those was talking conflict involved about. the presumes obvious the result. majority whose at hearings opinion, perpetuates every an findings level. examiner assumption and Like failed conflict distinguished interest in At the of that to interest, the there two himself of to its examiner, erroneous the crucial majority and a potential the Hafner the the when throughout question Court, distinguish the of a potential interest is opinion's hearings without of interest a presumption, accepted of plainly conflict between distinction Instead, of made by the conclusions is an actual conflict this case. conflict such originally of this presumption a firing to distinguish and an actual of an actual and this error fails and application existence the opinion disposition Such difference between conflict of interest. interest recognition Conoco. MCA. is a significant and a potential The majority fair against the appeals the hearing, between and has tried process Hafner without understand testified an actual success what as follows: In any event you see and would agree with me Q: that at a minimum your claim against Conoco, Inc., could be potentially a conflict of interest, is that correct? Hafner: Potentially? Q: Yes. Hafner: Yes, I'll agree with potentially. Q: Okay. And you don't think that it ever turned into a conflict of interest because you governed yourself so that you did the best work possible, you put to the side your lawsuit against Conoco, Inc., and you did the 13 he job well and satisfactory characterization? Hafner: That's fair. Hafner the did not feel potential existed) conflict never noted above, to firing on Department must control the that be shown "[tlo that the matter and the behavior the adversely impact the employer's constitute actual his does. misconduct, conflict a and potential that DuBray's misconduct. information" (Emphasis of interest, which interests, In order the employer of interest recognizes which for of misconduct the individual's the effect on By this difference does not directly and an actual an employee's conflict actions must show the existence has a direct the form, a finding was within implicitly conflict which disclose justify of The examiner added.) a potential interest, added). interests." Department never conflict adverse between of examiner must have had a direct business As was "discharged to separation that interest. Hafner misconduct states acknowledged of because of this "claimant itself definition, failure was justified because a potential disclose constituted fair misconduct the hearings (Emphasis this a he freely found that to that conflict that employer." its employer's an actual failing interest of Hafner But it for [his] of (which the examiner concluded conflict into is constituted interest is a distinction employment further of Instead, interest his actions ripened this addressed. from that [sic], adverse to of an effect on business. DuBray business was asked during had been impacted the hearing by Hafner's 14 to actions. . explain how his He replied that "we haven't employ." done a billable Yet responsible actions there for is this. affected, hour for Conoco since no explanation left our how or why Hafner for was Asked again what business [Hafner] interests Hafner's DuBray responded, It affects my, the, my agent/client relationship that I have, and the fact that Mr. Hafner was carrying a checkbook that was Conoco's checkbook, and my checkbook and that he had an obligation to me to notify me of any potential conflicts of interest that he had. To notify He did not. Dubray Land Services. (Emphasis adverse his added.) effect firing nor on his of justified. on the finding Hafner for is, evidence rather, it a potential presented reveals neither demonstrated business reveal conflict that however, employer's does not which is any direct his of belief potential of an actual adverse impact constitute firing findings I dissent interest DuBray's was testimony the direct adverse a prerequisite for conflict conflict on of Hafner interest business Without was not to the contrary a finding justified, are clearly from the majority opinion. did It of interest. DuBray's misconduct. of and not rise a did not have a direct therefore did of misconduct, and the hearings erroneous. to the examiner's For these reasons, . Justice Terry N. Trieweiler concurs 15 in the foregoing not DuBray's 2(/J& Justice that of misconduct. Hafner's level response business; The fact any other effect DuBray's dissent.
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