I. INTRODUCTION

     On November 22, 2002, Timothy A. Taylor filed a grievance with the Board alleging there was no reasonable basis for his discharge. On December 11, 2002, the grievant filed supplemental materials concerning the grievance. On January 24, 2003, the Montana Department of Fish, Wildlife, and Parks filed a position paper responding to the grievance.

     On November 28, 2003, an investigator for the Board issued a preliminary decision sustaining the grievance. On December 8, 2003, the defendant rejected the preliminary decision. On December 12, 2003, the Board's investigator transferred the case to the Hearings Bureau for a hearing on the grievance.

     The Hearings Bureau scheduled a pre-hearing conference in the case on December 30, 2003, which was continued to January 8, 2004, due to the absence of defendant's counsel from the state for medical reasons. Following the pre-hearing conference, the hearing officer set the case for April 27, 2004. The hearing officer later reset the hearing date for June 17, 2004, and then July 20, 2004, at the request of the parties who required additional time for discovery and pre-hearing preparation.

     The hearing commenced at 9:00 a.m. on July 20, 2004, in the Flathead County Courthouse, 800 South Main, Kalispell, Montana. Taylor was present and represented by James D. Moore, Attorney at Law. John F. Lynch, Attorney at Law, represented the defendant. Dan Vincent was the defendant's designated representative. Timothy Taylor, Ladd Knotek, Lonnie Knutson, Scott Rumsey, Jon Cavigli, Jim Vashro, Brian Marotz, and Dan Vincent testified. The hearing officer received an offer of proof concerning the testimony of Kathryn O'Siggins, which the hearing officer had excluded on hearsay grounds. The hearing officer admitted the depositions of Gary Anderson, John Wachsmuth, Kathy Tisler, Neil Ward, Grant Grisak, and Les Schlegal pursuant to the agreement of the parties.

     Grievant's exhibits 1 through 6-32 and defendant's exhibits A through P were admitted into evidence by stipulation. Grievant's exhibit 7 was admitted without objection.

     Following the hearing, the hearing officer held the record open for the submission of additional evidence, which the parties submitted on August 2, 2004. The additional evidence included Taylor's W-2 forms for 2002 (exhibit 8) and 2003 (exhibit 9), statements of his earnings during 2004 (exhibit 10), his position description (exhibit Q), FWP's alternate pay plan information (exhibit R), FWP's alternate pay plan guidelines (exhibit S), and a letter from counsel for FWP dated July 30, 2004, containing certain information about Taylor's compensation (exhibit T). The hearing officer received no objection to any of these exhibits, and they are hereby admitted into evidence.

     The parties submitted initial post hearing briefs on August 2, 2004. The deadline for reply briefs was August 16, 2004. However, neither party submitted reply briefs, and the matter was deemed submitted for decision on August 16, 2004.

     The audio recording of the beginning of the second day of the hearing, tape 10, has a short gap. To the best of the hearing officer's recollection, that portion of the hearing included only the identification of the proceeding, the recall of Taylor to the stand, and the very first question or two that counsel for FWP posed to Taylor on the subject of interim earnings.

     II. ISSUE

     The issue in this case is whether Timothy A. Taylor is aggrieved by a serious matter of his employment in accordance with Mont. Code Ann. § 87-1-205.

     III. FINDINGS OF FACT

     1. Taylor commenced employment for the Department of Fish, Wildlife and Parks (FWP) as a work study student in approximately 1988. In 1990, he became a full-time fisheries technician for FWP.

     2. Taylor worked in the Kalispell regional office of FWP. During the latter part of Taylor's employment, Dan Vincent supervised the regional office. Several subordinates reported to Vincent, including an office manager, a parks division manager, a wildlife division manager, a fisheries division manager, a warden captain, and an information services manager.

     3. Taylor worked in the fisheries division. Jim Vashro managed the fisheries division. The fisheries division had two principal subunits, the state funded programs and the special projects funded by the Bonneville Power Administration (BPA). Taylor worked in the BPA special projects area. Brian Marotz supervised that area. One of the programs was the Hungry Horse mitigation program, consisting of a biologist who supervised Taylor and three other fisheries technicians.

     4. Taylor's early employment with FWP was devoid of significant problems. Taylor characterized it as a fantastic place to work. Marotz conducted a performance appraisal of Taylor in 1991 which characterized him as "a hard worker with a sincere interest in his work and the aquatic resource. He has been conscientious and accurate. . . . Overall, I have been pleased with his performance." In 1992, Marotz evaluated him as meeting standards or above in all areas. In several areas, Marotz rated him outstanding. He received a number of letters of commendation from the public, and from FWP management. Prior to 1999, he was not the subject of disciplinary action. Ladd Knotek, supervising biologist in 1999, completed the supervisory portion of a performance appraisal for Taylor then. This appraisal noted several performance deficiencies. However, Taylor never signed the appraisal because he disagreed with some of its contents, and wanted his views taken into account. Despite its policy requiring annual performance reviews, FWP never completed another appraisal of Taylor's performance after 1999 until his discharge.

     5. In 1999, Grant Grisak became the supervising biologist of the Hungry Horse mitigation program. Taylor and Grisak had a poor working relationship. Taylor believed that Grisak belittled him, reprimanded him for things he did not do, and gave him unreasonable assignments. Grisak was frustrated over what he perceived as performance problems with Taylor and believed that Taylor undermined him by failing to follow the chain of command.

     6. In October 2000, Scott Rumsey, a biologist in the regional office, told Chris Hunter, a Fisheries Division bureau chief in the Helena office, of the deteriorated working environment in the Hungry Horse mitigation program. Hunter spoke to Grisak and his two predecessors in the supervising biologist position, Ladd Knotek and Mark Deleray. Grisak, Knotek, and Delaray attributed the problems to Taylor and his co-worker, John Wachsmuth, and to the failure of Brian Marotz to deal with the problem. They described Taylor and Wachsmuth as insubordinate, failing to complete their assignments, cheating on their timesheets, sabotaging equipment and professional relationships, and lacking respect for authority. They said that Marotz consistently protected Taylor and Wachsmuth.

     7. Hunter conveyed his concerns based on these conversations to Vincent. In November 2000, Vincent convened an investigative committee to conduct an inquiry into the allegations. The committee included Doug Denler (FWP human resource manager), Mark Lere, Jim Satterfield, and Vincent.

     8. On December 5, 2000, after the committee completed its review, Vincent issued written warnings (entitled "confidential performance counseling" letters) to Taylor and Wachsmuth. On December 6, 2000, he wrote a letter to Grisak addressing his conclusions from the investigation and outlining certain deficiencies identified in Grisak's leadership skills.

     9. Taylor's written warning concluded that it was often difficult to get him to accept tasks willingly, that he frequently questioned assignments, and that it was difficult to get people to work with him due to his cynicism and antagonistic attitude. It cited the need for teamwork and respect for others. It provided that his communication with supervisors and fellow employees needed to improve dramatically if he wished to continue his employment with FWP.

     10. The plan for Taylor to improve his job performance provided that he would be reassigned to a different position funded partly by the management program and partly by the mitigation program, and that he would be supervised by Gary Anderson, a biologist in the state management programs. The warning also provided:

• An updated performance agreement will be completed and signed by you by December 31, 2000.
• You will be asked to keep moderately detailed records of your daily work.
• You will notify Gary [Anderson] of any planned absences in advance and obtain his approval.
• You will do jobs assigned to you willingly. If you have questions or want consideration for another way of doing a job, discuss it with Gary. But, once a decision is made [sic] accept that decision and do the job without complaining to others.
• Mentoring and coaching employees is an important goal of this agency. You need to improve your communication skills with supervisors and peers; therefore, I'm directing you to make an appointment with a VRI counselor (752-6443) to seek ways to improve your communication skills. You may seek the counselor of your choice under the VRI program. Details of your communication will remain confidential; however, in order for your counselor to report that you've attended and cooperated, you will need to sign a Release of Information form. I will need to know that you've attended in order to satisfy this requirement.

     11. Finally, the letter referred to an allegation of sexual harassment which had been made 3½ years earlier but never addressed by FWP. After noting what he characterized as a consistent pattern of denial in Taylor's response, Vincent stated he would not pursue it further because of the time that had passed. He further stated that any behavior of the type alleged was totally unacceptable.

     12. Taylor acknowledged receipt of the written warning on December 7, 2000. He attempted to comply with its requirements. He completed daily reports until advised he was no longer required to submit them. He attended the required counseling through VRI. He tried to get as much good as he could out of the counseling. FWP did not complete an updated performance agreement. Taylor received no further performance appraisals until the termination of his employment. Other than counseling by Marotz about Taylor's inappropriate humor on a float trip in July 2002, Taylor received no performance counseling or disciplinary action after December 7, 2000 until the termination of his employment.

     13. The position description for Taylor's position provided that his responsibilities were to:

• develop field and laboratory schedules and coordinate sampling schemes;
• conduct fish population surveys/inventories and laboratory studies to assess the characteristics and dynamics of fish populations and angler use, inventory;
• protect, maintain and enhance aquatic habitat to maintain or improve populations of fish and aquatic organisms;
• file, enter, summarize, analyze, and interpret fisheries data for management decisions and report writing;
• communicate with the public, other government agencies, and groups or individuals to convey findings, provide information, change behavior, defend decisions, and solicit input;
• perform, authorize, or supervise the design, assembly, purchase, operation, maintenance, and repair of equipment necessary for fisheries investigations and shop/office operation; and
• perform administrative duties to implement regional fisheries program.

     14. Sometime in 2001, FWP assigned Taylor to work as the coordinator and department representative on a project to develop a fishing pond in a Kalispell city park by dredging and deepening Dry Bridge Slough. Taylor had never before worked as a project coordinator on any project. Rich Misplon, an FWP employee in Helena, assisted Taylor to develop a contract for the project.

     15. The work performed on Dry Bridge was funded with mitigation program funds. As a biologist in the state funded programs, Anderson, Taylor's supervisor, was not involved in the project.

     16. On May 13, 2002, FWP entered into a contract with Lonnie Knutson, a local excavator, to perform the dredging work necessary for the contract. Knutson was a friend of Taylor. FWP notified Knutson to commence work on the project on May 13, 2002.

     17. The maximum contract amount for the dredging was $12,000.00. The contract terms incorporated Knutson's proposal providing for an hourly rate for the use of certain equipment. The contract also incorporated by reference a document entitled "Requirements for Dry Bridge Slough Pond Deepening 11-06-01." That document contained the following paragraph:

The intent is to continue with the work until the project's budget is exhausted. Work items shall be paid at the rates listed in the contractor's proposal. The Contractor shall keep the Department's Representative up to date on contract expenditures. The Contractor and the Department Representative shall take extra care to ensure enough money is available near the end of the project to conduct the necessary clean up and re-vegetation. . . .

     18. In July 2002, FWP hosted a project review tour of the Hungry Horse Fisheries Mitigation program. Taylor was responsible for providing logistics for a float trip on the South Fork of the Flathead River. Taylor rowed a raft on the trip. Neil Ward and Kathy Tisler of the BPA rode in Taylor's raft. During the float trip, Taylor made several joking comments to Neil Ward. One employee of the mitigation program participated in semi-professional bicycle racing as a personal hobby. Taylor told Ward that the BPA was funding a bicycle racing team. One mitigation program sponsored by the FWP with BPA funding involved incentives to anglers to return tags from northern pike. Taylor referred to this program as a bounty.

     19. Following the float trip, Ward questioned Marotz about Taylor's comments, particularly the bounty on Northern pike. Marotz assured Ward there was no bounty on Northern pike. Ward later wrote a letter to Marotz in which he mentioned the bike team comment. Marotz questioned Taylor, who told him that the comments were intended as jokes. Marotz told Taylor it was a good thing that it was Ward on the boat instead of someone else because it could be damaging to FWP if the person who heard the comments got the wrong impression. He admonished him to be careful about what he said.

     20. Taylor was a "non-exempt" employee for purposes of overtime and compensatory time. FWP had guidelines that limited accrual of compensatory time for non-exempt employees to 90 hours. It placed responsibility for adherence to the guidelines on the immediate supervisor. It also had a policy or practice that, with some exceptions, required non-exempt compensatory balances to be reduced to 10 hours by March 31 of each year.

     21. On May 17, 2002, Taylor had 82.5 hours of compensatory time. Between May 18, 2002 and June 28, 2002, he increased his compensatory time balance to 99 hours. At some time during this period, Anderson told Taylor he needed to pay attention to his compensatory time balance and keep it down. In the pay period that ended July 12, 2002, he reduced the balance to 83.5 hours. By August 9, 2002, based on his time sheets, his compensatory balance had increased to 139.75 hours, due to extra work he performed on the Dry Bridge project and the float trip.

     22. Taylor worked extra hours in July and August due to the float trip and to the Dry Bridge project, projects that were assigned to him by the mitigation program. Anderson approved the compensatory time submitted on his time sheets, even though he did not directly supervise Taylor in these projects.

     23. At some point, Anderson counseled Taylor about his excessive compensatory time. Between August 10, and the termination of his employment, Taylor used 87 hours of compensatory time at the direction of Anderson, leaving him with a balance of 52.75 hours at the end of his employment.

     24. Knutson commenced work on the Dry Bridge project in early August 2002. He was unable to complete dewatering of the pond by pumping slurry because of the large amount of refuse in the pond. He performed some dredging. He encountered numerous other problems with the project. It quickly became apparent that the contracted amount of $12,000.00 would be insufficient to complete the objectives of the Dry Bridge project.

     25. Marotz had approximately $15,800.00 in his budget which could have been used for the Dry Bridge project. He retained a portion of the funds as a contingency for the project. Neither he or Vashro were directly involved in the contracting process, and both believed that the contract with Knutson was for approximately $14,000.00.

     26. Taylor began trying to identify other funding sources that would allow the completion of the objectives of the Dry Bridge project. He and Knutson, together with other FWP personnel, researched the possibility of funds from the Department of Transportation, from the Flathead Electrical Cooperative's "Roundup for Safety" program, and from the local Lions' Club. Taylor and Marotz prepared a proposal which Marotz presented to the cooperative, but it was not funded. Knutson intended to donate some of his time in expectation of receiving a tax deduction for it. In addition, Taylor believed FWP had some additional funding available, based on his communications with Marotz and Vashro and their misapprehension of the contract amount.

     27. On August 16, 2002, Taylor, Vashro, Knutson, and Mike Baker from the Kalispell City Park Department met on-site at Dry Bridge to discuss the project status and how to proceed. Knutson estimated that he had performed approximately $10,700.00 of work at that time. Vashro, still mistakenly believing that the contract was for $14,000.00, said it appeared enough money remained to clean up the site. He did not direct Taylor or Knutson to suspend work.

     28. On or about August 21, 2002, Knutson gave Taylor an invoice for $20,160.00 for work performed on the Dry Bridge project.

     29. Taylor did not have authority to approve a payment for the amount of Knutson's invoice. Marotz or Vashro had to approve an invoice for more than $5,000.00 before FWP would pay it. Most times, employees submitting vouchers for more than $5,000.00 put them directly in Marotz' box. However, there was no requirement that invoices be given directly to Marotz or Vashro. If an invoice that he was required to sign was not given to him directly, it would end up in his box, presumably placed there by the office personnel who processed the payments. If a person without authority to approve a payment had signed the voucher cover, Marotz approved the invoice by signing above the other name when he approved the invoice.

     30. On August 22, 2002, Taylor submitted the invoice for payment by placing a voucher cover on the invoice, signing it, and giving it to Christy Personet. Neither Marotz or Vashro were in the office when he submitted it. He told Personet that the invoice went over the contract amount and that Marotz would probably want to discuss it.

     31. Marotz returned the Knutson invoice to Taylor with directions to fill out a voucher cover for the correct amount, i.e. the amount of the contract.

     32. From August 28 to September 9, 2002, Taylor was out of the office on compensatory time. From September 10 to 13, 2002, Taylor worked 6 hours per day on creel surveys reporting to Anderson, and took 2 hours per day of compensatory time. On September 14, 2002, Taylor worked 4 hours and took 4 hours of compensatory time. He was off work on September 15 and 16, 2002.

     33. When Taylor reported to work on September 17, 2002, Vincent called Taylor into a conference room and abruptly informed him that he was discharged effective immediately. Marotz, Vashro, and Anderson were present. He gave Taylor a letter dated September 17, 2002, advising him of the discharge. The letter stated:

This action is based on your failure to follow rules and procedures regarding comp time use, the significant over expenditure of a contract that you were in charge of at Dry Bridge Slough, the inappropriate note you left on a car at the Old Steel Bridge Fishing Access Site, and finally, your continual cynical and derogatory comments regarding Department projects and programs.

     34. As specific examples of "carelessness, incompetence, or wanton disregard for rules" evinced by Taylor continually during his employment, Vincent cited:

• Taylor had indicated that his counselor stated the Department was attempting to build a case to fire him;
• Taylor either intentionally misrepresented his comp time balance or failed to manage it appropriately, resulting in non-compliance with the comp time policy, after being told by Anderson not to exceed his comp time balance;
• Taylor failed to carefully track the budget he had been given for the Dry Bridge Slough project, resulting in the budget being significantly over run, and attempted to submit the bill for payment without notifying his supervisors;
• During the South Fork River float, Taylor misrepresented facts about Department projects that could have been damaging both politically and budgetarily [sic] to important Department programs; and,
• Taylor was responsible for writing an offensive note that was affixed to the windshield of an angler's vehicle.

     35. Other than the conversation with Marotz following the float trip, FWP gave Taylor no opportunity to respond to the allegations contained in the discharge letter prior to making the decision to discharge him. The letter stated that Taylor could provide a written response or could request a "predetermination [sic] hearing" with the department director. The letter also notified Taylor of his right to file a grievance concerning his discharge.

     36. Taylor filed a grievance concerning his discharge on September 20, 2002. Jeff Hagener, the director of FWP, conducted a telephone conference call on the grievance (which he termed a "pre-termination hearing") on October 29, 2002. On November 8, 2002, he upheld the discharge and rejected the grievance, except for the charge concerning the offensive note on the angler's vehicle. With respect to that charge, he stated: "Although there was clear evidence that you were involved in the action, it cannot be proved that you left the note and I have decided to dismiss this charge from the termination letter. . . ."

     37. On September 17, 2002, Taylor was earning $14.002 per hour. Effective with the pay period that commenced September 21, 2002, Taylor would have received a 4% statutory pay raise to $14.5627 per hour. Effective with the pay period that will commence December 25, 2004, Taylor would have received a statutory raise of 25 cents per hour to $14.8127 per hour.

     38. In addition to his salary, Taylor earned annual leave at a rate of 18 days per year, and sick leave at a rate of 12 days per year. On June 1, 2005, Taylor's annual leave entitlement would have increased to 21 days per year. Departing employees are entitled to be paid 25% of accrued sick leave and any accrued but unpaid annual leave, subject to a statutory maximum.

     39. Taylor was also entitled to employer contributions to the public employees retirement system of 6.9% of his earnings, and to group employee insurance contributions of $325.00 per month at the time of his discharge, $366.00 per month effective January 1, 2003, $410.00 per month effective July 1, 2003, and $460.00 per month effective July 1, 2004.

     40. Following his discharge, Taylor earned $650.00 in substitute employment from Grant Flage in 2002, $8,123.50 in substitute employment from Pletch Electric, $1,824.90 from Glacier Kitchens, and $660.00 from Evergreen Electric in 2003, and $11,143.50 from Dockter's Electric and $1,008.00 from an unidentified source in 2004.

     IV. DISCUSSION AND ANALYSIS ⁽¹⁾

     Mont. Code Ann. § 87-1-205 provides a procedure for FWP employees to grieve disciplinary action to the Board of Personnel Appeals. An FWP employee who has been discharged can prove that he is aggrieved if the department has failed to follow the policies of the State of Montana on discipline handling. Those policies are set forth in Admin. R. Mont. 2.21.6506 - 2.21.6522.

Admin. R. Mont. 2.21.6506 provides in pertinent part:

(1) It is the policy of the state of Montana that:
(a) state employees who fail to perform their jobs in a satisfactory manner or whose behavior otherwise interferes with or disrupts agency operations be subject to disciplinary action, up to and including discharge;
(b) disciplinary action be administered for just cause, as defined in this policy; and
(c) an employee be informed of the cause for disciplinary action and offered the opportunity to respond.

Admin. R. Mont. 2.21.6509(1) provides:

When formal disciplinary action is necessary, just cause, due process and documentation of facts are required. Formal disciplinary actions include, but are not limited to, written warning, suspension without pay, disciplinary demotion and discharge.

     FWP discharged Taylor, and he is therefore aggrieved if the department did not have just cause, did not provide him with due process, or did not document the facts resulting in the discipline. For the reasons discussed below, FWP's discharge of Taylor was not supported by just cause, due process, or documentation of facts. Taylor is therefore aggrieved.

     A. Just Cause

     Admin. R. Mont. 2.21.6507(6) defines just cause as "reasonable, job-related grounds for taking a disciplinary action based on failure to satisfactorily perform job duties or disruption of agency operations. Just cause includes, but is not limited to, an actual violation of an established agency standard, legitimate order, policy, or labor agreement, failure to meet applicable professional standard or a series of lesser violations, if the employee would reasonably be expected to have knowledge the action or omission may result in a disciplinary action."

     The rule requires an "actual violation." Thus the first question in determining whether FWP had just cause for discharge is whether Taylor actually did the things he was accused of. The rule also requires that the violation represent failure to satisfactorily perform job duties or disruption of agency operations, and that the employee reasonably be expected to know that the violation might result in disciplinary action.

     1. Compensatory time

     The first reason cited by Vincent in the discharge letter was Taylor's failure to follow rules and procedures regarding compensatory time use. In particular, Vincent stated, "Taylor either intentionally misrepresented his comp time balance or failed to manage it appropriately, resulting in non-compliance with the comp time policy, after being told by Anderson not to exceed his comp time balance." At the hearing, FWP emphasized that the problem was the misrepresentation rather than the actual number of hours accrued.

     It is clear that Taylor accrued more than the 90 hours of compensatory time, working on projects that were assigned to him by FWP management. Other than the number of hours accrued, there is no evidence that he failed to follow any rules or procedures.

     Further, the evidence does not support a finding that Taylor intentionally misrepresented his compensatory time. On September 5, 2002, Anderson wrote a memo to Vashro, stating his belief that sometime in June 2002, Taylor told him his compensatory time balance was about 40 hours. Taylor recalled discussing his compensatory time balance with Anderson, but denied misrepresenting it to him. In his deposition, which was admitted into evidence, Anderson stated he could not remember for sure if Taylor told him he had 40 hours, and that he would not want to be held to that statement. His testimony was extremely vague about what Taylor told him, and when.

     The alternate basis for the assertion that Taylor violated the compensatory time rules and procedures, that he intentionally failed to manage his compensatory time appropriately after being told by Anderson not to exceed his balance, is confusing, in view of the fact that the department's guidelines place the burden on managers to insure that employees do not exceed the accrual limits. Again, Anderson's testimony on this point was vague. It is clear that he told Taylor to work on getting his balance down, but not when he said this or under what circumstances.

     Anderson, Taylor's supervisor, had limited ability to manage Taylor's compensatory time accrual because he was not involved in the float trip or the Dry Bridge project. He believed Taylor should have been directly communicating with Marotz and Vashro about the fact that those projects were causing him to accrue excess compensatory time. Once Taylor reached nearly 140 hours of compensatory time, and Anderson began actively to manage the situation by counseling Taylor and requiring him to take time off, Taylor reduced his compensatory time balance to an acceptable level.

     Even if Taylor actually violated the compensatory time rules or policies, there is no showing that the action was a failure to satisfactorily perform job duties or disruption of agency operations, or that Taylor could reasonably have been expected to know that the violation might result in discharge. The evidence established that the cyclical nature of the work at FWP regularly necessitated the accrual of compensatory time, that other employees exceeded the compensatory time accrual limits, and that no employee had been disciplined for excessive compensatory time.

     Once FWP gave Taylor clear direction regarding his compensatory time, he followed that direction. He did not intentionally mislead his supervisor. FWP did not have just cause to discharge Taylor based on his compensatory time accrual.

     2. The Dry Bridge project

     The second reason cited by Vincent for the discharge was the alleged significant over expenditure of a contract that Taylor was in charge of at Dry Bridge Slough. In particular, Vincent stated that Taylor failed to track carefully the budget he had been given for the Dry Bridge project, resulting in the budget being significantly over run, and that he attempted to submit the bill for payment without notifying his supervisors.

     The evidence fails to support a finding that Taylor was given or exceeded a budget for the project. Taylor acted as FWP's liaison for the project with the contractor, Lonnie Knutson. That contract contained a maximum amount of $12,000.00. This was not a budget given to Taylor to manage. Although Knutson performed work in excess of the maximum provided for in the contract, FWP was not obligated to pay this amount to Knutson, and it did not pay him.

     Taylor's failure regarding Dry Bridge is that he allowed Knutson to continue working beyond the amount of his contract, and allowed him to maintain an expectation that he would be paid for the additional work. Based on his communications with Marotz and Vashro, Taylor reasonably believed that additional funding was available to support the contract or would be forthcoming. Although this failure can fairly be characterized as a performance deficiency, it bears noting that FWP assigned this work to Taylor outside the normal position duties outlined in his position description. It was the first time that he had worked on such an assignment and he had no supervision and limited guidance on the project. In view of these facts, he could not have reasonably expected that such an error would result in discharge.

     The evidence supports a finding that Taylor submitted Knutson's invoice for payment without notifying his supervisors. FWP implies by this contention that Taylor was attempting to sneak the payment past his supervisors. That inference is completely unwarranted in view of the evidence. Although Taylor testified that he placed a copy on the desks of both Marotz and Vashro when he gave it to Personet, both testified that they did not receive a copy. It is probable that he did not give them copies. However, Taylor did not have the authority to approve the payment, and he had given invoices directly to office staff on previous occasions.

     Marotz testified that employees could place invoices for which his signature was required in his box or give them to office personnel, who would give them to Marotz for his signature. There was no office standard, order or policy that directed Taylor to give the invoice to Marotz or Vashro. Further, Marotz testified that he first saw the voucher when Personet gave it to him, that she said Tim had told her Brian would want to look at it, and that he went over a bit. In view of the evidence, it was not reasonable for Taylor to know that the manner in which he submitted the invoice was grounds for discharge.

     3. Note on the car at the Old Steel Bridge fishing access site

     FWP conceded earlier in the grievance process that it could not prove an actual violation by Taylor with respect to the allegation that Taylor left an inappropriate note on an angler's car. This was the third reason given by Vincent for the discharge of Taylor. It requires no further comment here.

     4. Cynical and derogatory comments

     The fourth reason cited by Vincent for the discharge was Taylor's "continual cynical and derogatory comments regarding Department projects and programs." The statement in which Taylor reported that his counselor said the Department was attempting to build a case to fire him, and the comments made on the South Fork float trip were particular examples of this problem set forth in the discharge letter.

     The evidence supports a finding that Taylor made the alleged statements. However, they do not establish just cause for discharge for a number of reasons. First, two examples of statements considered by FWP to be problems over a 20 month period does not show that Taylor made "continual" cynical or derogatory comments.

     With respect to the report of a comment allegedly made to him by his counselor, it is difficult to see how this would establish grounds for any type of disciplinary action. From Vincent's testimony at hearing, it appears that Vincent believed Taylor to be lying about the alleged statement. Dishonesty might have formed a basis for discipline if administered sometime in proximity to the statement. However, Vincent never investigated the comment and could not establish that Taylor was lying. Although the evidence does not establish when Taylor made the report, it is probable that it occurred in the early part of 2001, when he was attending the counseling required by the warning letter he received. At the time, Vashro corrected Taylor and told him it was not FWP's intent to build a case to fire him. He did not give Taylor any reason to believe that his report was cause for disciplinary action.

     With respect to the comments made on the float trip, Taylor clearly intended them as an attempt at humor. At worst, they represented an isolated instance of poor judgment warranting performance counseling, not discharge. In fact, Marotz did counsel Taylor regarding the comments, and specifically testified that he did not believe they warranted a written warning. Corrective counseling, under the state's discipline handling policy, is a form of discipline. Admin. R. Mont. 2.21.6508. Having disciplined Taylor by corrective counseling, it was not appropriate for FWP to impose additional discipline for the same action, based on double jeopardy principles. Elkouri and Elkouri, How Arbitration Works, BNA 6^th Ed. 2003, page 980.

     Even if additional discipline was proper, Taylor could not reasonably have known that these comments would result in discharge. Although FWP had warned Taylor in the December 6, 2000, performance counseling letter that he needed to improve his communication with supervisors and fellow employees dramatically, that warning was not sufficient to establish just cause for discharge based on this single incident, 20 months later.

     Actual performance management and evaluation activities by FWP management were necessary for Taylor to be on notice that the float trip comments could have resulted in his discharge. It is clear, however, that FWP managers in the Kalispell office had no interest in actually helping Taylor to improve in this area, and essentially washed their hands of him in December 2000.

     FWP did not follow its own policies on performance appraisal. Despite Vincent's statements in the performance counseling letter, it failed even to complete an updated performance agreement, never evaluated Taylor's performance, nor did it engage in mentoring or coaching with Taylor. With these kinds of performance concerns, mentoring and coaching by supervisory personnel would have been an imminently reasonable approach. However, FWP apparently expected counseling from an outside counselor to substitute for the management work that should have taken place. ⁽²⁾ It then assigned Taylor to the supervision of an employee who had limited supervisory experience, who did not work on many of the same projects as Taylor, and who apparently provided no mentoring or coaching to him except to tell him he needed to reduce his compensatory time balance. Mentoring and coaching would have been particularly important in Taylor's case since FWP decided to assign him duties outside his position description and for which he had no experience. The updated performance agreement contemplated by the performance counseling letter would have been a good first step. However, FWP utterly failed in its performance management obligations, which would have served to put Taylor on notice that comments like those he made on the float trip would serve as grounds for discharge.

     5. Carelessness, incompetence, and wanton disregard for rules

     Although not specifically included in list of reasons for discharge, Vincent's discharge letter also stated that Taylor had continually displayed carelessness, incompetence, and wanton disregard for rules. The specific examples given of these alleged violations have been addressed above, and FWP did not prove any other violations which would implicate continual carelessness, incompetence or disregard for rules. In fact, much of the evidence presented by FWP overall as justification for the discharge related to matters which occurred prior to December 2000. It bears noting that this statement exemplifies much of FWP's case for discharging Taylor, which relied heavily on innuendo and hearsay and will be discussed further in the section on documentation of facts.

     B. Due Process

     Admin R. Mont. 2.21.6507(7) states:

"Due process" means ensuring an employee:
(a) is informed of the action being taken and the reason for it; and
(b) has an opportunity to respond to and question the action and to defend or explain the questioned behavior or actions.

In the context of the discharge of a public employee, due process also requires affording an employee a pre-termination hearing. Cleveland Board of Education. v. Loudermill (1985), 470 U.S. 532, 544. Wolny v. City of Bozeman, 2001 MT 166, ¶18, 306 Mont. 137, 30 P.3d 1085; Boreen v. Christensen (1994), 267 Mont. 405, 420, 884 P.2d 761, 770.

     FWP completely failed to afford Taylor due process in the discharge. When Vincent called him into the conference room on September 17, 2002, he had decided to discharge him. He had prepared a letter, which he gave him, that stated unequivocally that he was discharged effective immediately. FWP did not inform Taylor that it was considering discharge pending a pre-termination hearing. It did not give him any opportunity to respond to the allegations prior to implementing the decision to discharge. Although it told him in the discharge letter that he could request a "pre-determination hearing" with the department director, and may have intended this language to refer to a pre-termination hearing, it could not have in fact afforded him a pre-termination hearing since it had implemented the discharge. FWP Director Hagener also referred to having held a pre-termination hearing in his response to the grievance. He did not hold a pre-termination hearing, but rather held a hearing in response to a termination of employment which had already occurred and over which Taylor had filed a grievance.

     Except for the counseling by Marotz over the comments on the float trip, FWP never gave Taylor any opportunity even short of a pre-termination hearing to respond to any of the allegations which formed the basis for FWP's decision to discharge, either before or after it made the decision. There has been no showing of due process to support this discharge.

     C. Documentation of Facts

     Admin. R. Mont. 2.21.6507(5) states:

"Documentation" means a record of facts, incidents or other materials used as evidence to support the administration of a disciplinary action.

     The requirement of documentation of facts implies that the employer has conducted an investigation and documented that the employee has actually violated its standards, orders, or policies prior to imposing discipline. Because much of the case for the discharge of Taylor was based on inference, innuendo, and hearsay, FWP also failed to make a record of facts, incidents or other materials used as evidence to support the discharge. FWP's failure in this regard is illustrated by the incident with the note on the car. It did not investigate even to compare the handwriting to that of Taylor before concluding he was responsible, and had to abandon the allegation for lack of proof.

     The regional office managers were obviously frustrated by Taylor and interpreted his actions in the most negative possible light without investigation or objective review. For example, FWP concluded, without ever discussing it with Taylor, that he was attempting to obtain payment of the Knutson invoice without approval by Marotz or Vashro. FWP had no policy requiring vouchers to be submitted in a particular manner, and the inference that Taylor was trying to sneak something past his supervisors is completely unwarranted by the evidence.

     Similarly, based on two incidents approximately 1½ years apart, FWP concluded that Taylor made "continual cynical and derogatory comments regarding Department projects and programs" (emphasis added). Two instances can hardly support a conclusion that he made such comments continually. The first of these cannot even fairly be characterized as cynical or derogatory comment regarding Department projects or programs. If there were other such comments, FWP failed to document them.

     FWP attempted to bolster its case for discharge by pointing to occurrences prior to the performance counseling letter it gave to Taylor in 2000, and in particular the second hand report of alleged sexual harassment involving Taylor in July 1997. FWP attempted to introduce the testimony of a supervisor of Montana Conservation Corps participants, to establish that Taylor had also made inappropriate comments at that time. FWP did not timely investigate or document the incident by talking to anyone who actually heard what Taylor said or did. ⁽³⁾ Its attempt to introduce hearsay evidence about this incident was nothing more than an effort to unfairly prejudice Taylor.

     FWP also stated in the discharge letter that Taylor continually displayed carelessness, incompetence, and wanton disregard for rules. Other than the specific examples already analyzed, FWP had no documentation to support these allegations. FWP presented evidence that Taylor failed to follow the "chain of command" and undermined his supervisors, that he solicited letters of commendation for the work he performed, that he did not get along with co-workers, that he was dishonest, and that he failed to accept responsibility for his actions and always had an excuse. It took a statement from John Wachsmuth's deposition entirely out of context in attempting to portray Taylor as a "wise guy with a wise guy attitude." Most of the examples supporting these contentions preceded the December 2000 corrective counseling letter, and the evidence does not support a finding that these behaviors continued. If they did, there is no documentation of these facts.

     D. Remedy

      The grievance statute provides that if the Board finds that the employee is aggrieved, it may issue an order to resolve the employee's grievance. Mont. Code Ann. § 2-18-1012. In the absence of specific remedial provisions in the statute, the Board has the inherent authority, similar to that of arbitrators in labor relations matters, to "bring [its] informed judgment to bear in order to reach a fair solution of the problem." United Steelworkers of America v. Enterprise Wheel & Car Corp. (1960), 363 U.S. 593, 597. Under this approach, it is appropriate to look to other sources in Montana law for guidance to fashion an appropriate remedy.

     As a matter of common law in Montana, an employee who was wrongfully discharged was entitled to be made whole for the losses resulting from the discharge. Stark v. Circle K Corp. (1988), 230 Mont. 468, 751 P.2d 162. The Montana legislature adopted the Wrongful Discharge from Employment Act, in part to place limitations on awards of future lost wages. Under the facts of this case and the contentions of the parties, these sources provide appropriate guidance to fashion the remedy in this case.

     Taylor seeks an award of back pay and benefits, plus an award of front pay in lieu of reinstatement. Although he sought reinstatement in the pre-hearing proceedings, he abandoned that request in the post-hearing submissions, stating that the antipathy generated against him in the Kalispell region would make it impossible to return to his former position. By analogy to the Wrongful Discharge from Employment Act, he contends that he should be compensated his damages for a period of four years from his discharge. FWP states that back pay and reinstatement are available, but contends that future damages (front pay) are unavailable because they require expert testimony on their value.

     FWP cites Stark, supra, for the proposition that future damages are unavailable without expert testimony. However, the decision clearly stands for the proposition that future damages may be awarded if they are reasonably certain. In Stark, the court upheld an award of front pay for a period of 28 years. Expert testimony was necessary to establish the present value of those damages. In this case, the period of front pay sought is relatively short, and the concern for uncertainty can be resolved by requiring periodic future payments.

     The testimony demonstrated that, whether their views of Taylor were justified or not, FWP managers have a level of frustration with and hostility toward Taylor that would make it impossible for him to resume employment in the FWP regional office. Thus, an award of front pay in lieu of reinstatement is appropriate. Four years of overall recovery for Taylor is reasonable and supported by the credible and substantial evidence.

     From his discharge until the end of 2002, Taylor would have earned $8,724.16. He had interim earnings of $650.00 during the period. His lost wages were therefore $8,074.16. During 2003, he would have earned $30,406.92 from FWP. His interim earnings were $10,608.40. Therefore, he is entitled to $19,798.52 in back pay. His earnings from The Finish Line, a second job he held both during and after his employment with FWP, are not substitute earnings to be deducted in either year. From the beginning of 2004 through July 12, 2004 (the last date for which there is evidence of interim earnings), Taylor would have earned $16,077.22. He had interim earnings of $12,151.85. His back wages for that period are therefore $4,041.87.

     As a state employee, Taylor was also entitled to certain benefits, including vacations, sick leave, health insurance, retirement contributions, and contributions to social security and medicare. Mont. Code Ann. §§ 2-18-601 - 2-18-820 and Title 19. Taylor is entitled to compensation for these benefits to the extent of his losses.

     Vacation pay is a loss to Taylor only if he would not have taken vacation time off, with pay, and state law limits accrual to two times the annual accrual amount. Mont. Code Ann. § 2-18-617. Taylor was earning 18 days of vacation per year at the time of his discharge, and there is no evidence to suggest that, had he continued to work, he would have accrued unused leave for which he could be paid as part of the back pay calculation. Regarding sick leave, however, Taylor was entitled to accrue sick leave without limit and be paid for 25% the leave at the termination of employment. Sick leave could be used only for illness and disability, so it is more likely that Taylor would accrue leave for which he would be paid. He is entitled to $637.02 for sick leave accrual through July 12, 2004.

     Taylor was entitled to the employer's monthly health insurance contribution described in the findings. However, this amount would not have been paid directly to Taylor, and the evidence does not show that he either incurred any health costs which would have been covered by insurance, had he maintained employment, or that he purchased substitute coverage. Therefore, he has not established any losses related to the health insurance contribution.

     Both the employer and employee are required to make contributions of 6.9% of wages to the Public Employees Retirement System. Mont. Code Ann. §§ 19-3-315 and 19-3-316. However, the evidence does not establish whether Taylor has maintained his membership in the system after the termination of his employment. The system is a defined benefit system, and a departing employee is not entitled to receive the employer's contributions, unless he is qualified for a retirement benefit. A departing employee may withdraw his own contributions and interest, but it is not clear whether Taylor has done this. If Taylor has maintained his membership in the retirement system, then FWP must make the statutory contributions on his back earnings, prior to the reduction for interim earnings, and Taylor must also contribute 6.9% of wages.

     Taylor is also entitled to back pay of $13,863.69 less interim earnings from July 13, 2004 through December 24, 2004. FWP can calculate the amount due and owing from July 12, 2004 upon receipt from Taylor of proof of his interim earnings. He is also entitled to $159.97 for sick leave accrual, and retirement system contributions if he has elected to remain in the system.

     The back pay amounts, after deduction for interim earnings, are subject to withholding and the employer's contribution for social security and medicare.

     Effective December 25, 2004, FWP must pay Taylor at an hourly rate of $14.8127, less his interim earnings. It must pay him this amount every two weeks on the same date that employees are paid after receiving proof of his interim earnings for the pay period in question. It must also, at his election, restore him to the state employee benefit plan and make contributions to the retirement system on the amount of his pay before deduction for interim earnings. It must also pay him for 24 hours of sick leave accrual per year at his hourly rate. It must continue to pay him in this manner through September 17, 2006, including any statutory pay raises authorized by the 2005 Legislature. At the end of the front pay period, it must also pay him for 42 days (two times the rate at which he would earn annual leave by that date) of annual leave accrual at his final rate of pay.

     Because Taylor's back pay and benefits are matters which are capable of being made certain by calculation, Taylor is also entitled to prejudgment interest on his losses at a statutory rate of 10%. Mont. Code Ann. § 27-1-211; In re the Marriage of Debuff, 2002 MT 159, 310 Mont. 382, 50 P.3d 1070. As of December 24, 2004, Taylor is entitled to $5,022.52 in prejudgment interest on his back pay through July 12, 2004. The interest will continue to accrue on the back pay due from September 17, 2002 until July 12, 2002, at a rate of $8.92 per day until the issuance of the Board's final order in this matter.

     The prejudgment interest on his back pay from July 13, 2004 through December 24, 2004, can be calculated by subtracting the interim earnings for the period from $14,023.66 (the wage loss plus sick leave accrual) to arrive at the total back pay entitlement for the period. The total back pay due is then divided by the 11.9 bi-weekly pay periods between July 13, 2004 and December 24, 2004, to arrive at the average bi-weekly amount of back pay due to Taylor. That amount is then multiplied by 10%, then by 132, representing the total number of weeks represented by the bi-weekly pay periods (22 plus 20 plus 18 . . . plus 0), then divided by 52. A daily rate for additional prejudgment interest on the back pay due from July 13, 2004 to December 24, 2004, through the date of the Board's order may be calculated by multiplying the total back pay due for the period by 10% and dividing by 365 days.

     Taylor will also be entitled to prejudgment interest on any earnings between the date of this order and the date of the Board's final order, to be calculated in the same manner described above.

     Taylor also requested punitive damages "if the discharge was believed to be malicious." Even assuming the evidence supported such a finding, Taylor presented no authority for an award of punitive damages, and the hearing officer is unaware of any authority for such an award in an employment grievance proceeding.

     V. CONCLUSIONS OF LAW

     1. The Board of Personnel Appeals has jurisdiction of this case. Mont. Code Ann. § 2-18-1011.

     2. Timothy A. Taylor is aggrieved by a serious matter of his employment because the Montana Department of Fish, Wildlife and Parks discharged him from his position as a fisheries technician without just cause, due process, or documentation of facts.

     3. Taylor is entitled to be made whole for the losses resulting from his discharge. He is entitled to back pay and benefits through July 12, 2004 in the amount of $32,552.92 as described in the discussion and analysis above, plus prejudgment interest on that amount of $5,022.52 through December 24, 2004. He is also entitled to back pay from July 13, 2004 to December 24, 2004, in an amount to be calculated by deducting his interim earnings during the period from $14,023.66 ($13,863.69 wages plus $159.97 sick leave accrual). He is also entitled to prejudgment interest on this amount calculated as described in the discussion and analysis above. If he has not received a refund of his contributions to the Public Employees' Retirement System, he is entitled to the employer's contribution on the back wages prior to the reduction for interim earnings, and to the employer's contribution to Social Security and Medicare after the reduction for interim earnings. He is also entitled to be paid every two weeks beginning with the date of this order as described in the discussion and analysis above.

     VI. RECOMMENDED ORDER

     1. The Montana Department of Fish, Wildlife and Parks IS HEREBY ORDERED to calculate the back pay, sick leave accrual, and prejudgment interest, including prejudgment interest through the date of the Board's final order, due to Timothy A. Taylor for the period of July 13, 2004 through December 24, 2004, in accordance with this order.

     2. The Montana Department of Fish, Wildlife and Parks IS HEREBY ORDERED to tender a state warrant for the amount calculated in paragraph 1, plus $32,552.92 in back pay and sick leave accrual for the period September 17, 2002 to July 12, 2004, plus $5,022.52 in prejudgment interest on that amount through December 24, 2004, plus $8.92 per day in additional prejudgment interest due from December 24, 2004 through the date of the Board's final order. The warrant must be payable to the claimant, Timothy A Taylor, and delivered to the Labor Standards Bureau, Employment Relations Division, P.O. Box 6518, Helena, Montana 59604-6518. The Department may deduct withholding for taxes, social security, and medicare from the wage portion but not the interest portion. The Department IS FURTHER ORDERED to confirm whether Timothy A. Taylor has received a refund of his contributions to the Montana Public Employees' Retirement System. If he has not, the Department is ordered to calculate the statutory contributions required on the sums Taylor would have earned as back pay, without reduction for interim earnings, to withhold the employee contributions from Taylor's back pay award, and to pay the employee's and employer's contributions to the Montana Public Employees' Retirement Administration.

     3. The Montana Department of Fish, Wildlife and Parks IS HEREBY ORDERED to place Timothy A. Taylor on its payroll effective December 25, 2004, to pay him at the rate of $14.8127 per hour, less his interim earnings. It must pay him this amount every two weeks on the same date that employees are paid after receiving proof of his interim earnings for the pay period in question. It must also, at his election, restore him to the state employee benefit plan and make contributions to the retirement system on the amount of his pay before deduction for interim earnings. It must also pay him for 24 hours of sick leave accrual per year at his hourly rate. It must continue to pay him in this manner through September 17, 2006, including any statutory pay raises authorized by the 2005 Legislature. At the end of the front pay period, it must also pay him for 42 days (two times the rate at which he would earn annual leave by that date) of annual leave accrual at his final rate of pay. It must also pay him prejudgment interest on any pay earned but not paid from December 25, 2004 through the date of the Board's final order in this case.

DATED this 22nd day of December, 2004.

BOARD OF PERSONNEL APPEALS
By: /s/ ANNE L. MACINTYRE
Anne L. MacIntyre, Chief
Hearings Bureau
Department of Labor and Industry

NOTICE: Pursuant to Admin. R. Mont. 24.26.303(3)(c), the above RECOMMENDED ORDER shall become the Final Order of this Board unless written exceptions are postmarked no later than January 14, 2005 . This time period includes the 20 days provided for in Admin. R. Mont. 24.26.215, and the additional 3 days mandated by Rule 6(e), M.R.Civ.P., as service of this Order is by mail.

The notice of appeal shall consist of a written appeal of the decision of the hearing officer which sets forth the specific errors of the hearing officer and the issues to be raised on appeal. Notice of appeal must be mailed to:

Board of Personnel Appeals
Department of Labor and Industry
P.O. Box 6518
Helena, MT 59624-6518

1. Statements of fact in this discussion and analysis are incorporated by reference to supplement the findings of fact.
Coffman v. Niece (1940), 110 Mont. 541, 105 P.2d 661.

2.Vincent's testimony that FWP had "paid for" Taylor to go to counseling was disingenuous and a telling example of FWP's contrived approach to performance management in this case. Vincent conceded on questioning from the hearing officer that the counseling he required Taylor to attend was the counseling available to every state employee through the employee benefit plan, and entailed no additional cost to FWP.

3. The hearing officer excluded the testimony of O'Siggins. To the extent that the exhibits admitted into evidence contain reference to what O'Siggins told Vincent, those exhibits are not substantial evidence to establish that Taylor made inappropriate comments at the time. For evidence in an administrative hearing to constitute substantial evidence to support a finding, it must be evidence. Had it been objected to, defendant's exhibit C10 would not have been admissible. Bean v. Department of Labor and Industry, 1998 MT 222, 290 Mont. 496, 965 P.2d 256.