Recent Changes To Montana’s Wrongful Discharge Act

The Montana Wrongful Discharge of Employment Act (WDEA) was created in 1987 and provides the exclusive remedy for a claim of wrongful termination. Since the WDEA was established in 1987, it has gone unchanged until the 2021 Montana legislature made significant amendments that benefit employers.

Montana is a “good cause” state, meaning that any termination that occurs after a probationary period must be for good cause. By contrast, good cause is not required for termination during a probationary period. Prior to the 2021 changes, Montana had a default probationary period of six months. The 2021 amendment to Mont. Code Ann. § 39-2-910 extended this default probationary period to one year and permits employers to set a probationary period of up to eighteen months. If an employer has an outdated probationary period of less than one year listed in their handbook or policies, that lesser amount would be the effective probationary period for employees. Thus, employers should consider updates to their handbooks given the changes in the law.

The changes to the WDEA also includes procedural changes to terminations that employers and their human resources departments should be aware of. Included are changes made to internal grievance policies. An employer now has fourteen days after termination to provide notice of its internal grievance procedure to the terminated employee, an increase over the previous period of seven days. This communication can now be conducted by email. This change is significant in that an employee is not permitted to file a WDEA claim until they have exhausted an employer’s internal grievance policy.

Finally, the time to serve a WDEA claim on an employer has changed. Prior to the 2021 amendments, a party had up to three years after filing a complaint to serve the employer with notice of the lawsuit. This period for service has been reduced to 6 months, which may impact an employer’s retention period for documents and other materials.