Montana Employment Contracts laws & HR compliance analysis

Montana Employment Contracts: What you need to know

As a general rule, every employment relationship is a contractual relationship, regardless of whether the contract is reduced to writing. Employment contracts take many forms, including at-will employment, implied contracts created by offer letters or language in employee handbooks, collective bargaining agreements or union contracts, and individual written employment agreements.
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Under Montana law, there are three recognized types of employment relationships. These include collective bargaining agreements; individual written employment agreements providing for a specific term of employment, e.g., employment for 1 year; and all other employment relationships. Unlike many states where this last category falls under the default rule of at-will employment, in Montana these employment relationships are governed by the Wrongful Discharge from Employment Act (the Act) (MT Code Sec. 39-2-901et seq.).
The Act limits an employer's right to terminate an employee at will or without good cause. Under the Act, a discharge from employment is wrongful and, therefore, actionable if:
• The discharge was in retaliation for the employee's refusal to violate public policy or for reporting a violation of public policy.
• The discharge was not for good cause and the employee had completed the employer's probationary period of employment. (If the employer has not established a probationary period, the statute provides that an employee is in the probationary period during the first 6 months of employment.)
• The employer violated the express provision of its own written personnel policy.
For purposes of the Act, “good cause means reasonable job-related grounds for dismissal based on a failure to satisfactorily ...

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