I. INTRODUCTION

     In this matter, William Pryor pursues the third step in his two grievances related to his discharge from Montana Department of Fish, Wildlife and Parks (FWP) and the refusal of that entity to provide him with a market adjustment in pay. Prior to the contested case hearing, Pryor filed numerous motions in limine and sought summary judgment. Hearing Officer Gregory L. Hanchett denied these motions and the motion for summary judgment for the reasons stated in his order issued on April 28, 2004.

     The hearing officer convened a contested case hearing in this matter on May 10, 11, and 12 in Billings, Montana. Steven Shapiro, attorney at law, represented Pryor. Jack Lynch, agency legal counsel, represented FWP. Julie Sanders, Harvey Nyburg, Ron Aasheim, Tom Palmer, Terry McEneaney, David Rye, Raymond Genness, Cathy Harvey, John Leary, Mark Hunt, Shane Shaw, Bill Pryor and Jane Pryor all testified under oath at the proceeding. Grievant's Exhibits 1 through 41 were admitted into evidence. Respondent's Exhibit A was also admitted into evidence. At the conclusion of the hearing, the parties were permitted to submit post-hearing memoranda. Based on the evidence adduced at the hearing as well as the arguments contained in the post-hearing briefing, the hearing officer makes the following findings of fact, conclusions of law, and recommended decision.

II. ISSUES

     1. Was Pryor aggrieved in a serious matter of his employment when he was discharged?

     2. Was Pryor aggrieved in a serious matter of his employment when he was denied a market adjustment increase in pay?

III. FINDINGS OF FACT

A. Discharge from Employment

     1. FWP employed Pryor as a regional information officer (RIO) in Region 5 beginning in September, 1974. On September 12, 2003, FWP discharged Pryor for misappropriating state funds and using state property for personal gain in order to produce a wildlife video about trumpeter swans (Trumpeter Swan video). Specifically, the discharge letter stated that Pryor (1) used FWP editing equipment to make the swan video, (2) used a state vehicle on August 31, 1999 in order to pursue production of the video, (3) misdirected $439.00 of FWP funds in order to make duplicate tapes of the swan video, and (4) made the swan video for personal gain and not under the auspices of FWP.

     2. As RIO, Pryor produced or assisted in producing video productions and radio announcements for FWP. He had access to video equipment, including a high quality video camera and video editing equipment owned by FWP and maintained at its Billing office.

     3. FWP utilizes its "Code of Ethics and Employee Standards Of Conduct" in order to review and measure improper employee conduct. The code requires all FWP employees to familiarize themselves with the code and the State Standards of Conduct. Grievant's Exhibit 9, p. 1. Incorporated within this code are the State Standards of Conduct for State Employees. Those standards require an employee to familiarize him or herself with the standards for conduct. Grievant's Exhibit 10, p. 1. Among other things, the code prohibits a state employee from using public time, facilities, supplies, personnel, or funds for private business purposes.

     4. Pryor knew that he could not use state property for personal gain or personal use and that to do so would violate state employee ethical requirements. He also knew that engaging in certain types of conduct, such as theft, could result in discharge.

     5. Before January, 2000, Dick Ellis acted as the Region 5 supervisor and had supervisory control over Pryor. In January, 2000, Harvey Nyburg replaced Ellis as the Region 5 supervisor.

     6. Ellis practiced little supervisory control over Pryor. Pryor generally decided which issues relating to wildlife were in need of more media attention and then he would set out to provide that media attention. Pryor did not need Ellis' pre-approval in order to create a video. Pryor would create a video and then after-the-fact would advise Ellis and obtain approval of the video. Pryor did not seek Ellis' or any other FWP manager's approval to create the Trumpeter Swan video. Indeed, Pryor never informed Ellis, Nyburg, or anyone else at FWP that he had made the Trumpeter Swan video and no one at FWP at any time authorized making of the video.

     7. In 1999, Terry McEneaney, on behalf of the Yellowstone Foundation, approached Pryor about a video McEneaney wished to produce about trumpeter swans in Yellowstone Park. McEneaney wanted to produce the video in order to get the word out to the public about the declining population of trumpeter swans.

     8. McEneaney sought bids from other production companies to make the video. The other bids ranged from $50,000.00 to $100,000.00. Pryor prepared a proposal for McEneany dated February 23, 1999 for the production of two videos, one to be eight minutes long "to be used in visitor centers" and the other to be 25 minutes long "to be used as the Park and McEneany see fit." The proposal contains the name of Pryor Wild Vid, the name of Pryor's video production company. The proposal indicates that the total cost of the production would be $15,000.00, payable to Bill Pryor in four installments of $3,750.00 each. The proposal further provided that Pryor would complete the post production as part of the $15,000.00 price tag and would provide 10 copies of the tape to Yellowstone along with master videos of each no later than March 1, 2000. Pryor and McEneany both signed the proposal.

     9. McEneany understood his agreement with Pryor to be an agreement strictly with Pryor and not with FWP. McEneany thought that he was helping out Pryor Wild Vid by permitting Pryor to make the Trumpeter Swan video. At no time did Pryor hold himself out as representing FWP in any aspect of making the video.

     10. On July 10, 1999, Pryor left Billings using a state vehicle and met with McEneany to complete some of the filming for the Trumpeter Swan video. McEneany kept a log of his daily activities during this time and on July 10, 1999, he noted that he and Pryor "teamed up today to film swans in the Paradise Valley." McEneany's entry goes on to note that he and Pryor first filmed at Beaver Creek and then visited Brockaway Ranch. McEneany and Pryor spent eight hours that day working together on their video project.

     11. On August 11, 1999, McEneany's journal again notes that he and Pryor got together and filmed footage of the swans at Brockaway Ranch.

     12. On August 31, 1999, McEneany again met with Pryor at Brockaway Ranch. Pryor traveled to Brockaway Ranch using a state vehicle. Pryor filmed footage for the Trumpeter Swan video on that day as well, specifically filming the capture of two swans at the ranch. On that day, McEneany and Pryor spent approximately three to four hours of the day filming.

     13. Pryor kept the master of the Trumpeter Swan video at Production West, a video production studio located in Billings. He did not maintain the master at the FWP office.

     14. On February 29, 2000, Pryor authorized Production West to make 50 copies of the video and further authorized Production West to bill FWP for the cost of the videotape copies in the amount of $225.00. Exhibit A, p. 21. FWP paid for the copies. Exhibit A, p. 22. On July 18, 2000, Pryor instructed Production West to bill FWP for the cost of 20 Beta copies of the video. Exhibit A, p. 25. This totaled $95.00 and FWP paid for these Beta copies. Exhibit A, p. 26. On August 28, 2000, Pryor purchased an additional 20 VHS duplicates of the video from Production West and again instructed Production West to bill FWP. Exhibit A, p. 28. Production West billed FWP for the cost of those duplicates, $119.00, and FWP paid the bill. Exhibit A, p. 30. In total, FWP paid out $439.00 to produce all of the duplicates of the Trumpeter Swan video.

     15. None of Pryor's state vehicle reports makes mention that any portion of the mileage was attributable to the Trumpeter Swan project. Instead, Pryor charged off all of the mileage for those particular days to state projects. In addition, Pryor sought state reimbursement for his meals on all of these dates.

     16. At the time that Pryor produced the Trumpeter Swan video, Pryor Wild Vid was a going concern, filing income taxes in 1996, 1997, 1998, and 1999.

     17. In order to complete the finished video, Pryor utilized the FWP owned video production equipment maintained at the Billings FWP office. He did not seek permission from Ellis or anyone else at FWP to utilize this equipment for production of the Trumpeter Swan video.

     18. The video was released for public distribution in March 2000.

     19. In the fall of 2000, Tom Palmer, the Bureau Chief of the Information Bureau of FWP, saw the video on a local television station in Helena, Montana. He called Pryor and left a message congratulating him on the quality of the video. Palmer thought that the video was something that Pryor had done for FWP. There is no evidence to show that Palmer knew at the time or should have known that Pryor had produced the video on his own.

     20. Pryor gave out copies of the video to local television stations, the Billings Gazette, and to local school teachers. He did not charge recipients for receiving a copy.

     21. After paying for all expenses related to completion and production of the video and the making of the copies, Pryor still has $1,629.33 of the money paid to him by McEneaney sitting in a bank account.

     22. On June 30, 2002, Nyburg was at home watching televison. As he changed television channels, he came upon a station airing the Trumpeter Swan video. He heard Pryor's voice narrating the video, but did not think too much of it.

     He then watched the credits at the end of the airing of the video and noticed that the video had been produced by Pryor Wild Vid. As a result of watching the video, Nyburg became concerned that Pryor might have used FWP (i.e., state) resources for personal gain without FWP knowledge. Nyburg's concern was heightened by the 1999 voucher incident that resulted in Pryor being formally disciplined for falsifying travel vouchers.

     23. Nyburg initiated procedures to have the making of the film investigated according to state regulatory requirements. This necessitated referring the matter to the State of Montana legislative audit division. The legislative audit division began to investigate Pryor's use of state resources in order to make the video.

     24. State investigator Shane Shaw began investigating the case shortly after receiving the matter from the state auditor's office. Shaw spoke with Ellis and Nyburg during his investigation and learned that no one at FWP had authorized the video or incurring expenses related to the video.

     25. Shaw also interviewed Pryor on May 20, 2003. During their discussion, Pryor told Shaw that he had made about $3,000.00 by producing the video.

     26. Pryor conceded at the hearing that if "things had worked out as in the estimate he provided to McEneaney, this would have been income to him." Pryor was also aware that he could not use FWP editing equipment for his own business pursuits.

     27. Shaw completed his investigation in June 2003 and prepared a report of his findings. Exhibit A, pp. 42-58. Shaw consulted with the state attorney general's office to determine if misdemeanor theft charges should be filed against Pryor based upon his unauthorized use of state equipment in producing the video and his unauthorized use of state funds to pay for the copies of the video. The attorney general's office determined that filing charges would be pointless since the statute of limitations for this type of crime had expired.

     28. After learning from Shaw that no criminal enforcement action would be taken, FWP management decided that disciplinary measures against Pryor were warranted. On August 1, 2003, Nyburg sent a letter to Pryor informing him of Shaw's investigation, the results of the investigation, and that FWP intended to discharge Pryor for violating Mont. Code Ann. § 2-2-121(2)(a). The letter informed Pryor that "[b]ecause of the seriousness of the intended action, and in order to provide you an opportunity to respond to the issues identified, we have scheduled a pretermination meeting for August 8, [2003] . . . ." The letter then detailed each of the violations.

     29. The purpose of the pretermination hearing was to permit FWP to make an independent assessment of whether Nyburg's earlier determination was correct after taking into account both the facts of the investigation and any explanations that Pryor might have to any of the accusations.

     30. Instead of conducting the formal pretermination meeting on August 8, 2003, Pryor, Nyburg, and FWP Chief of Staff Chris Smith met informally to discuss possible resolutions of the situation. During that meeting, Nyburg scribed notes about the meeting, noting Pryor's position that he would not willingly separate from his FWP employment and that he had several things he wanted to yet accomplish in his employment. Exhibit 19. Smith stated to Pryor that neither a letter of reprimand nor Pryor's continued employment with FWP were possible outcomes. Id.

     31. On August 15, 2003, Chris Smith sent Pryor a letter indicating that the pretermination meeting had been rescheduled to August 22, 2003. Smith reminded Pryor in the letter that he would be able to present his explanation for the incidents that lead to the proposed discharge and that "after reviewing all of the facts of the investigation and your response to them, the Department will be prepared to make a determination on whether your employment will be terminated." Exhibit 20.

     32. Pryor's formal pretermination hearing occurred on August 22, 2003. FWP Human Resources Bureau Chief Julie Sanders, FWP counsel (Mr. Lynch), and Chris Smith met with Pryor and his counsel (Mr. Shapiro) for Pryor's formal pretermination hearing. Pryor was given the opportunity to explain why he created the Trumpeter Swan video using state funds and materials without seeking permission of FWP and why he had falsified travel logs. Pryor indicated (as he did at the contested case hearing in this matter) that having FWP pay for the duplicates of the Trumpeter Swan video was a mistake. Sanders, Lynch, and Smith then met to review Nyburg's decision to discharge Pryor. They concluded that discharge was the proper discipline under the circumstances. Nyburg, though present, did not participate in the meeting nor was he involved in any deliberations related to outcomes.

     33. In 1968, an FWP employee borrowed a FWP boat for private use. He damaged the boat while using it and FWP ordered the employee to fix the boat. FWP apparently imposed some type of discipline, although the evidence presented at hearing did not disclose that discipline.

     34. In 1976, this same employee shot the radiator of a state vehicle. He did so after he and a small group of other employees had decided to place a beer can on the fender of the vehicle for target practice. When it was this employee's turn to shoot at the can, he missed and hit the radiator. All of this occurred while the employees were at a park drinking beer. FWP disciplined the employee by suspending him for a period of five days without pay.

     35. In 1998, FWP disciplined this employee a third time for engaging in sexual harassment of other FWP employees. FWP gave the employee a written reprimand and ordered him to attend harassment prevention training.

     36. In 1992, a FWP parks operation specialist used a FWP copy machine to photo copy literature for a political candidate. The specialist did not reimburse FWP for the copies nor did he advise anyone at FWP that he had made the copies. Once discovered, FWP disciplined the specialist by counseling and requiring him to pay the $5.00 for the copies.

     37. During the same year, this specialist shot an elk without a permit. He covered up the illegal kill by removing the elk's antlers, skinning it, and removing evidence of the animal's sex. He was charged with a misdemeanor for the conduct and plead guilty. During his ensuing FWP disciplinary proceeding, the disciplinary panel noted his poor judgment in the incident, but noted the employee's good performance on the job as a mitigating factor. The specialist received a five day suspension without pay, a revocation of his ex-officio game warden status, and probationary status for a period of two years.

     38. In 1978, FWP hired a particular game warden. Over the years, this person progressed up the FWP ladder taking on increasing responsibilities. In 1996, allegations surfaced that this warden had misappropriated FWP funds for his own use. Specifically, these allegations suggested that the employee traded in a personal snow mobile in order to obtain a new snow mobile for his own use and then leased the snow mobile in the name of FWP using FWP funds. The allegations also indicated that the employee had authorized FWP payment for repairs to his personal snow mobile and his personal boat and had used FWP funds to purchase a boat motor and tent for his own use.

     39. The State of Montana prosecuted the warden for felony theft as a result of the allegations. FWP suspended the warden pending disciplinary action and the outcome of the felony prosecution. The warden was acquitted of the felony charges; nevertheless, FWP initially decided to terminate the warden and drafted a discharge letter to that effect. In the letter, the director of FWP noted that the warden had been acquitted of felony charges related to the conduct. The letter further informed the warden that FWP intended to proceed with discipline. For reasons that are unclear, it appears that the warden was not discharged, although it is clear that it was FWP's intention to do so at one point. Instead, it appears that while on suspension, the warden became disabled. Approximately 10 months later, as a result of a settlement between FWP and the warden, the warden retired.

     40. At the time of his discharge, Pryor had planned on working in his position until he reached 65 years of age. As a result of his termination, Pryor has lost his income from his FWP position, and he has had to incur the expense of health insurance for himself and his family.

B. Market Adjustment In Pay

     41. In 2002, FWP began looking at placing the RIO position into an Alternative Pay Plan that would permit market adjustment in compensation to qualifying RIO's. This alternative pay plan did not entail an automatic increase in rate of pay for each RIO. Rather, it moved the RIO's to the same market rate as resource program managers. FWP's intent in implementing the market pay system was to "put more emphasis on pay for job performance and less emphasis on position classification by using competencies, job performance and occupational markets rather than pay grades." Exhibit A, p. 65. FWP's director approved the alternative pay plan in March, 2002. As implemented, the market target rate was $46,034.00.

     42. Under the alternative pay plan, in-band pay adjustments were available to RIOs in the discretion of the FWP director provided that certain job performance related criteria were met by the RIO seeking the adjustment. On September 25, 2002, Nyburg sent a letter to FWP asking to move Pryor to market rate effective September 1, 2002. Doug Denler agreed with Nyburg's request for Pryor and forwarded that request to the FWP director.

     43. On March 21, 2003, FWP's director denied the request. In doing so, the director noted that it had been the practice of FWP before any in-band adjustment was made to "ensure the performance of the individual consistently meets program expectations." March 21, 2003 interoffice memorandum from Jeff Hagener to Nyburg, Pryor's Exhibit 11. The director further noted that Pryor had not met expectations to support a market adjustment, citing as reasons the 2001 travel expense falsifications and Pryor's 2002 suspension for insubordination. The memo also cited Pryor's continued problems with his communications with central staff in Helena (referring to Pryor's unprofessional and occasionally flippant manner of communicating with Helena FWP staff) as a basis for the denial.

     44. In February, 2002, Nyburg suspended Pryor for one week without pay for insubordination. Pryor had been asked to redo a specific Outdoor Report no later than February 4, 2002 and a backup Outdoor Report no later than February 8, 2002. Pryor refused to redo the report, apparently because he did not like the editing changes required by his supervisors to the original report. As a consequence, important deadlines were missed that resulted in "missed deadlines for the department, embarrassment and reduced credibility for the Agency and dissension among team members." Pryor's Exhibit 16.

     45. The problem of the untimely completion of assigned tasks continued despite the suspension. On August 29, 2002, Nyburg memorialized continuing difficulties with Pryor's failure to complete Outdoor reports in a timely fashion. Exhibit A, p. 78. Ultimately, because of Pryor's continued missed or nearly missed deadlines and the disruption caused to FWP, FWP reassigned all activity related to the Outdoor Report and other FWP videos and public service announcements to FWP staff in Helena. Exhibit A, p. 84 (February 19, 2003 memorandum from Ron Aasheim to Nyburg).

     46. In July, 2001, Nyburg reprimanded Pryor for falsifying travel expenses between February and June, 2001. During that time, Pryor had been traveling as part of his job duties during this time and he repeatedly sought reimbursement for un-receipted miscellaneous expenses he claimed to have incurred. In fact, he claimed these miscellaneous expenses in order to obtain compensation for meal expenses he incurred when he exceeded the fixed state meal allowance.

     47. Nyburg became suspicious of the expenses and confronted Pryor about them on June 21, 2001. Pryor openly admitted he had falsified the un-receipted expenses in order to obtain reimbursement for the cost of meals which exceeded the state meal allowance. Pryor told Nyburg that he did so because he had been instructed in the early 1980's by other state employees that this method of seeking reimbursement for meals which exceeded the state meal allowance was appropriate.

     48. Nyburg and Pryor met again on July 2, 2001, to discuss Pryor's method of getting around the state meal allowance and whether such conduct was appropriate. Pryor again admitted the conduct, but apparently felt such conduct was not inappropriate. Pryor again admitted the conduct when he and Nyburg met on July 10, 2001.

     49. When Nyburg and Pryor met a third time on July 16, 2001, in regards to the expense reporting, Pryor did an "about face" and denied that he had ever submitted miscellaneous expense vouchers in order to get around the state meal allowance caps. As a result of this conduct, Pryor received a formal reprimand. He initially grieved the reprimand but later decided not to pursue his grievance.

     50. Pryor's February 26, 2003 performance review (Exhibit A, p. 67) highlighted the deficiencies discussed by the director in his March 21, 2003 memo to Nyburg. The review noted, among other deficiencies, that Pryor's e-mails with FWP Conservation Education Division were "argumentative, not tactful, and abusive." Exhibit A, p. 71. The review went on to tell Pryor "You really need to work on improving how you interact with the other folks in your division."

     51. Pryor's e-mails to Tom Palmer at the FWP Conservation Education Program were unprofessional and posed a serious problem. During one such exchange, Pryor, obviously incensed over Palmer's decision to edit out a portion of a video, lashed out at Palmer. Pryor wrote "Once again I can only sadly wonder at the dimwittedness of you folks. Truly Helena has that effect on people. No one in their right mind would have taken that scene to be any more than it was . . . humor. That is except those too circumspect, too suspicious, and too lacking in that quality . . . humor." Exhibit A, p. 77.

     52. Pryor requested that FWP reconsider his request for market adjustment. Pryor's reconsideration questioned the propriety of using past performance issues to determine whether he should receive a market pay adjustment. In response, FWP's director explained to Pryor that "FWP becomes very concerned when past records show two incidents that have occurred in a 18 month period, a continuing pattern of inappropriate communication with central staff and a performance evaluation which indicates a need for improvement in several areas."

     53. Had Pryor been given a market adjustment rate of pay he sought, he would have earned $51,942.00 per year in salary. At the time of the denial of his request, his salary was $46,180.00.

IV. OPINION⁽¹⁾

     In his discharge grievance, Pryor contends that FWP failed to utilize the progressive discipline prescribed by Montana statute and by regulation and by failing to do so improperly discharged him. In addition, Pryor argues that FWP is precluded by laches from discharging Pryor because FWP waited too long to act after it had discovered Pryor's conduct. With respect to his pay adjustment grievance, Pryor asserts that FWP improperly utilized previous conduct in denying him a market adjustment in his pay.

     In response, FWP contends that Pryor's theft of state resources provided adequate basis for his discharge. FWP further argues that laches does not apply to its conduct since it acted promptly upon learning of Pryor's conduct to discipline him. FWP further argues that it acted properly in denying Pryor's request for pay grade adjustment.

     Mont. Code Ann. § 87-1-205 provides a procedure for FWP employees to grieve disciplinary action to the Board of Personnel Appeals. Pryor must show by a preponderance of the evidence that he was aggrieved. Mont. Code Ann. § 87-1-205; Mont. Code Ann. § 2-18-1012.

A. FWP Provided Due Process To Pryor And Had Just Cause For His Discharge.

FWP Accorded Pryor Due Process In the Discipline Proceeding.

     Providing due process to an employee in a discharge proceeding requires an employer to ensure (1) that the employee is made aware of the action being taken and the reason for it; and (2) that the employee has an opportunity to respond to and question the action and to defend or explain the questioned behavior or actions. Admin. R. Mont. 2.21.6507(7). See also, Cleveland Bd. of Ed. v. Loudermill (1985), 470 U.S. 532, 544. Wolny v. City of Bozeman, 2001 MT 66, ¶18, 306 Mont. 137, 30 P.3d 1085; Boreen v. Christensen (1994), 267 Mont. 405, 420, 884 P.2d 761, 770.

     Pryor's contentions that FWP did not follow the State of Montana's progressive discipline policy and that FWP had already made up its mind at the time of the formal termination proceeding on August 22, 2003 are arguments that he was denied due process. The facts of this case, however, do not support his argument.

     Montana's progressive discipline policy does not rule out the use of discharge as an appropriate first sanction under certain circumstances. Admin. R. Mont. 2.21.6509 provides in pertinent part:

Management shall, when appropriate, use progressive discipline. However, the appropriateness of using progressive discipline in each case lies within the discretion of management. The specific disciplinary actions taken and the order in which disciplinary actions are taken depend on the nature and severity of the performance deficiency or behavior that disrupts agency operations. Discharge should not be an initial disciplinary action except in severe cases of unsatisfactory performance or behavior that disrupts agency operations.

     In this case, the evidence shows that Pryor entered into a contract to produce a video for Yellowstone Park for his own benefit, not on behalf of the state, and then surreptitiously used state funds and state materials to produce the original and copies of that video. He never sought permission or notified anyone at FWP either before or after the production of the video tape that he had used state materials to produce the tape, that he had utilized state vehicles and charged off meals and expenses on state travel vouchers while spending time producing the tape, or that he had requisitioned payment for copies of the tape from state funds. His contention that he simply "made a mistake" in requisitioning payment from state funds not once but three times (a total amount of $439.00) over an eight month period in order to pay for various copies of the tape is incredible. The theft of the $439.00 in conjunction with the use of the state's video equipment and the use of the state vehicle to obtain footage for the video demonstrates severe unsatisfactory work performance that would justify discharge in the first instance. Under the circumstances of this case, there is no evidence to show that FWP's decision did not conform to the progressive discipline policy set forth in the administrative regulations. Wolny, supra.

     In Wolny, the City of Bozeman discharged a police officer under the city's progressive discipline policy. On appeal, the officer contended, among other things, that there was insufficient evidence to show that the department had complied with its progressive discipline policy because no other instances of prior conduct had been introduced by the city. In rejecting the argument, the supreme court noted that Wolny was not being discharged for his past actions but had been disciplined due to his conduct with respect to the accident with the bicycle rider and his actions once the investigation into the accident began. Wolny at ¶42. As in Wolny, Pryor was not being terminated on his past actions. He was being terminated on the basis of his conduct with respect to theft of resources which occurred in the making of the Trumpeter Swan video and obtaining copies of that video.

     The discharge procedure in this matter comported with the applicable due process requirements. The August 1, 2003 letter to Pryor carefully delineated the allegations facing him, that he was facing discharge, and that he would have the opportunity to present evidence to counter those charges at his formal termination hearing. Pryor was accorded a pre-discharge hearing on August 22, 2003 where he was permitted to present defenses and mitigating evidence. Only after all of these due process protections had been accorded to him was he formally discharged on September 12, 2003.

     Pryor contends that the deck was stacked against him as demonstrated by Nyburg's recording of the August 8, 2003 meeting between Nyburg, Smith, and Pryor. Pryor contends that Smith had already decided that Pryor must be discharged and, therefore, the August 22, 2003 meeting was tainted and did not afford Pryor the process that he was due. To comport with due process, however, the pretermination hearing need not definitively resolve the propriety of the discharge. It should be an initial check against mistaken decisions ­ essentially, a determination of whether there are reasonable grounds to believe that the charges against the employee are true and support the proposed action. Boreen, supra at 420, 884 P.2d at 770.

     The evidence shows that the August 22, 2003, pretermination hearing met these requirements. Smith's August 15, 2003, letter to Pryor, issued after the August 8, 2003, meeting, clearly states that FWP would not make a final decision as to action until "after reviewing all of the facts of the investigation and your response to them" at the August 22, 2003, meeting. In addition, Smith was one of the participants at the August 22, 2003, meeting, with Julie Sanders and FWP Counsel Jack Lynch. There was no suggestion and no credible evidence to show that Sanders and Lynch were in any way biased in the decision making or not exercising their independent judgment. The reviewers met with Pryor and his counsel, reviewed the evidence against Pryor, considered his responses, and, ultimately, determined that discharge was appropriate under the circumstances.

     Moreover, the law does not presume that a supervisor who proposes to remove an employee is incapable of changing his or her mind upon hearing the employee's side of the case. Desarno v. Department of Commerce, 761 F.2d 657 (Fed. Cir. 1985). See also, Berdahl v. North Dakota (1989), 447 N.W. 2d 300, 305-06. Smith's conduct subsequent to the August 8, 2003 meeting fails to demonstrate that he went into the August 22, 2003 meeting with a closed mind or that he did not accord Pryor the process he was due at the August 22, 2003 meeting. In the absence of any evidence showing that the pretermination hearing was totally robbed of fairness due to Smith's alleged bias, the hearing officer cannot find that Pryor's due process rights were violated.

FWP Had Just Cause To Discharge Pryor.

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

POLICY AND OBJECTIVES (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.
(2) It is the objective of this policy to establish procedures for taking formal disciplinary action.

     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.

     An employer can, depending on the seriousness of the offense, have "just cause" for discharge even if the inappropriate conduct is the employee's "first offense."

Offenses are of two general classes (1) those extremely serious offenses such as stealing, striking a foreman, persistent refusal to obey a legitimate order, etc., which usually justify summary discharge without the necessity of prior warnings or attempts at corrective discipline; (2) those less serious infractions of plant rules or of proper conduct such as tardiness, absence without permission, careless workmanship, insolence, etc., which will not call for discharge for the first offense . . . .

Elkouri and Elkouri, How Arbitration Works, BNA 6^th Ed. 2003, page 964, quoting Huntington Chair Corp., 24 LA 490, 491 (McCoy, 1955).

     Mont. Code Ann. § 2-2-121 prohibits state employees from using public time, facilities, equipment, supplies, personnel, or funds for the employee's private business purposes. Pryor's violation of this statute is manifest. He entered into a contract to film the Trumpeter Swan video for McEneany in his own right (acting as Pryor Wild Vid), not on behalf of FWP. At no time did he ever suggest to McEneany that he was undertaking the production of the video on behalf of FWP. Neither before nor after the creation of the video did he inform anyone at FWP that he had made the video. He utilized a state vehicle in pursuit of his own business. He utilized state editing equipment in order to make the Trumpeter Swan video. He then requisitioned payment from FWP for three sets of copies for the video over an almost eight month period never once disclosing that he had made the video or sought the copies on behalf of FWP. Pryor knew or should have known that his conduct violated FWP policy and state ethical requirements and further knew or should have known that such conduct could result in discipline up to and including discharge.

     FWP's conduct with respect to the three other employees does nothing to defeat the existence of just cause for discharge in this case. If anything, FWP's proposed conduct with respect to the game warden who utilized state funds to repair his boat and get a new snow mobile shows a consistent course of conduct with respect to Pryor. In that case, FWP had clearly chosen to discharge the game warden once his conduct was discovered. Indeed, even after that warden had been acquitted in a trial of the thefts, FWP persisted in its decision to terminate the employee. The circumstances which resulted in the warden being ultimately retired do not show that FWP decided to utilize a more lenient approach against other employees who steal from the department. The employee who shot the fender of the truck did not exhibit intentional misconduct (just incredibly poor judgment). The employee who photocopied the five dollars worth of documents on one occasion did not engage in a prolonged theft from the department such as that exhibited by Pryor's authorizing pay drafts for three separate sets of video copies over an almost eight month period.

     That Pryor had knowledge that his conduct might have resulted in discipline almost goes without saying. FWP's policy makes plain that theft can be a basis for discharge on its own accord. Even in the absence of actual knowledge that theft could constitute a basis for immediate discharge under the progressive discipline policy, Pryor should have known his conduct could result in such action being taken against him. There are some forms of workplace conduct that are so obviously improper that specific appraisal of the wrongfulness of the conduct is not a necessary predicate to imposing discipline. Elkouri & Elkouri, op. cit., p. 992. See also, Grievance of Towle (1995), 164 Vt. 145, 665 A. 2d 55. Theft from an employer falls into the category of inherently unacceptable behavior and Pryor should in any event have been aware that such conduct could result in discipline which might include discharge being taken against him. FWP had just cause for discharging Pryor under the facts adduced at the hearing in this case.

FWP Did Not Know Of Pryor's Conduct Until 2002 And Laches Does Not Apply.

     Citing a California case, Pryor contends that FWP knew or should have known that Pryor had made the Trumpeter Swan video as early as the year 2000. Pryor then argues that the delay in discharging Pryor renders the discharge improper under the equitable doctrine of laches. The problem with Pryor's argument, however, is that it fails to acknowledge that FWP did not have notice that Pryor might have engaged in illegal conduct until Nyburg's chance viewing of the Trumpeter Swan video in June, 2002. Pryor himself never notified anyone at FWP that he had made the video. For obvious reasons (to conceal his misconduct), he did not notify anyone that he had used state funds and state equipment to make the video. In fact, he concealed that information for almost three years and might never have disclosed it had it not been for Nyburg's discovery in June, 2002. It was only upon Nyburg's chance viewing of the video in June, 2002 that FWP had reasonable notice that Pryor might have engaged in impermissible conduct.

     Pryor's reliance upon Brown v. State Pers. Bd. (1985), 166 Cal. App. 3d 1151, 213 Cal. Rptr. 53, is misplaced. In that case, a California university discharged a professor in part on the basis that he had sexually harassed students some four years before the commencement of the disciplinary proceeding. In 1976, one year after the students had been harassed, the students divulged the conduct to a member of the university faculty. This occurred at the time the professor was being considered for tenure and promotion. The faculty then discussed the matters of the incidents of harassment at the promotion and tenure meeting, but took no action. It was not until some additional three years had passed that the disciplinary proceeding relating to the incidents was brought forward. In this context, the Brown court determined that laches applied to preclude the university from utilizing these two incidents of harassment as a basis for discipline.

     In the instant case, FWP had no reasonable basis to know that Pryor had engaged in the improper conduct until Nyburg saw the video in 2002. Contrary to Pryor's speculation, there is nothing in the record to suggest that Palmer, who was not Pryor's supervisor, would or should have been on notice that Pryor had engaged in improper conduct at the time he saw the video. Furthermore, to adopt Pryor's argument in this case would only reward employees for hiding misconduct, a policy that is inimical to the statutorily embodied policy of promoting ethics in state government. Under the facts of this case, application of laches is inappropriate.

The Expert's Testimony Is Not Helpful In This Case.

     In support of his position, Pryor presented the testimony of John Leary, the city manager of Boulder, Montana. Among other things, Leary opined that Pryor did not exhibit the intent to deprive the state of resources, that FWP did not follow its own rules in executing Pryor's discharge, and that discipline was not appropriate based on the facts of this case. FWP's counsel objected to Leary's opinion testimony with respect to Pryor's intent to deprive the state of resources.

     These opinions are entitled to no weight because they clearly invade the province of the trier of fact. Kizer v. Semitool (1991), 251 Mont. 199, 824 P.2d 229. Kizer involved a wrongful discharge suit. The district court, over objection, permitted the plaintiff's expert witness to testify that the employer had violated the covenant of fair dealing and good faith and that the employer's claim of force reduction was not legitimate. The jury returned a verdict in favor of the plaintiff and the employer appealed. The supreme court reversed the jury verdict finding that the expert's testimony embraced an ultimate legal issue which was not permissible. In reaching this conclusion, the court emphasized "the distinction under Rule 704, M.R.Evid., between testimony on the ultimate factual issue, which is allowable, and testimony on the ultimate legal issue, which is not allowable." Id. at 206, 824 P.2d at 230.

     Like the opinion evidence in Kizer, Leary's opinions noted above amount to legal conclusions. These opinions are not helpful to the trier of fact. Indeed, to consider them in this case would be tantamount to delegating the fact finder's function to the expert witness. This is not permissible under Montana law.

     Moreover, the hearing officer does not agree with the conclusions reached by Leary with respect to Pryor's intent to deprive the state of resources, the propriety of the discharge under the circumstances of the case, and whether or not FWP followed its policy with respect to implementing discipline. The evidence adduced at the hearing amply supports FWP's decision to discharge and further demonstrates that FWP accorded Pryor due process before discharging him.

B. Pryor Was Not Improperly Denied A Market Adjustment In Pay.

     Pryor also contends that he was improperly denied a market adjustment in pay when the other RIOs received such an adjustment in pay. Pryor's evidence has failed to demonstrate that FWP treated Pryor unfairly in this process.

     The pay implementation did not involve a reclassification of the RIO's position, nor did it represent a change in the employees' rate of pay. Rather, the plan called for changing the market rate of the RIO position to $46,034.00. Within this market rate pay scheme, the Alternative Pay Plan (APP) guidelines allowed a manager to consider in-band pay adjustments for an employee. To do so, however, required the manager to utilize "criteria identified under Market Based Pay in the APP." Grievant's Exhibit 11. In order to qualify for market pay adjustment, a request for market adjustment required documentation "that the [job] responsibilities are being handled on a regular basis and the employee is successfully meeting job expectations." Grievant's Exhibit 11.

     As part of the implementation process of the market pay band, FWP made clear to both management and RIOs that present job performance would be a consideration in deciding whether a market pay adjustment was appropriate. In considering Pryor's request, the evidence demonstrates that FWP management adhered to the criteria it had set forth in implementing the market pay adjustment plan. Pryor had two reprimands within 18 months. The first one, less than a month before he requested the pay adjustment, related to the very essence of his job in the timely production of video and audio vignettes. His conduct was so disruptive to FWP that his supervisor suspended him for a period of five days as a result of the problem. The other reprimand related to the falsifying of travel expenses. The lack of satisfactory job performance was compounded by the ongoing abusive and unprofessional manner of communication that Pryor exhibited to the Conservation Education Division with respect to edits of FWP videos that Pryor had produced.

     Pryor has presented no statutory or regulatory authority to show that FWP did not have the prerogative to tie a request for market pay adjustment to past performance indicators, especially where Pryor had such recent reprimands in his file. Neither has Pryor demonstrated that FWP did not adhere to its guidelines or that it treated him unfairly in considering his request. Under the evidence adduced at the hearing in this matter, Pryor has failed to show that he has been aggrieved by the denial of the request for market pay adjustment.

V. RECOMMENDED ORDER

     Based on the foregoing, the hearing officer recommends that Pryor's grievances regarding his termination and the failure to make a pay adjustment be denied.

DATED this 8th day of October, 2004.

BOARD OF PERSONNEL APPEALS

By: /s/ GREGORY L. HANCHETT

GREGORY L. HANCHETT
Hearing Officer

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 November 1, 2004. 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 opinion are hereby incorporated by reference to supplement the findings of fact. Coffman v. Niece (1940), 110 Mont. 541, 105 P.2d 661.