Johnson v. Costco Wholesale

Citation2007 MT 43,152 P.3d 727
Decision Date13 February 2007
Docket NumberNo. 04-835.,04-835.
PartiesEllery C. JOHNSON, Plaintiff and Appellant, v. COSTCO WHOLESALE, Defendant and Respondent.
CourtUnited States State Supreme Court of Montana

For Appellant: Patricia D. Peterman, Patten, Peterman, Bekkedahl & Green, PLLC, Billings, Montana.

For Respondent: John C. Crist, Eric Edward Nord, Crist Law Firm, LLC, Billings, Montana.

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 Ellery Johnson (Johnson) appeals the dismissal by the Thirteenth Judicial District Court of his action for wrongful discharge in which he alleged wrongful termination of his employment from Costco Wholesale (Costco). We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

¶ 2 The three issues raised on appeal are:

¶ 3 1. Did the District Court err when it granted Costco's motion for judgment as a matter of law1?

¶ 4 2. Did the District Court err in entering judgment for attorney fees in favor of Costco based solely on the affidavit of Costco's attorney without conducting an evidentiary hearing?

¶ 5 3. Are the Wrongful Discharge from Employment Act's arbitration and attorney fees statutes unconstitutional?


¶ 6 Johnson worked as a baker in the Costco bakery in Billings, Montana, from 1993 until he was discharged on March 1, 2003. From all accounts, Johnson was a satisfactory employee. At all points during Johnson's employment at Costco, there existed a "grazing" policy. Grazing is considered grounds for termination. Costco's March 2001 employment agreement states that grazing is the use or consumption of the following, which

includes, but is not limited to: shelf stock, RTV merchandise, merchandise returned at membership, and any packages that become opened by either members during the course of the day or damaged in the process of stocking (i.e., blade cut, defective seams, etc.). Also included are Food Court and fresh products and any ingredients used in their preparation. "If you didn't buy it, don't eat it!"

When baked goods at Costco have not been sold after a certain amount of time, the goods are considered "salvage" and are then either thrown out or donated to a rescue mission.

¶ 7 Throughout Johnson's employment up until roughly the fall of 2001, he and fellow employees interpreted the grazing policy quite liberally in their day-to-day work environments. It was not uncommon for employees to eat pieces of food for the purposes of testing the quality or sometimes even as a snack. In July of 2001, Cindy Petersen took over as the new general manager of the Billings Costco store. Petersen implemented a strict adherence to the grazing policy and attempted to ensure that if employees were to eat any Costco products for any purpose that a supervisor or manager must approve it. Petersen held a meeting in response to a grazing incident, in which Johnson was present, where she explained that any future violation of the grazing policy could result in immediate termination.

¶ 8 On February 25, 2003, Johnson reported to work early in the morning. He proceeded to pick up a box of salvage danish and took a bite of the product. Johnson threw away the rest of the box because he was not pleased with the quality of the danish. Unbeknownst to Johnson, another baker, Tammy Vogel, witnessed Johnson take the bite of salvage danish. Johnson originally explained to Vogel that he took the danish because he was "starving." Vogel proceeded to speak to a supervisor, Bill Bogy, regarding the incident. Bogy then informed Petersen of Johnson's behavior. Petersen, Bogy, and Johnson subsequently held a meeting to discuss Johnson's actions. In the meeting, Johnson admitted taking a bite of the salvage danish and explained that he was in fact hungry, but that he also was checking the danish for quality. Based on what Petersen viewed as a violation of the grazing policy, Johnson was instructed to take three days off from work so that she could investigate the situation.

¶ 9 Petersen later contacted various Costco executives—including the regional manager and also the senior vice-president. Specifically, Petersen spoke to John McKay, Costco's senior vice-president, regarding Johnson. McKay later reported to Petersen that he had discussed the situation with Craig Jelinek, Costco's executive vice-president, and that pursuant to Jelinek's order, Petersen should terminate Johnson. Johnson was subsequently discharged from his employment with Costco on March 1, 2003. Costco's stated reason for discharging Johnson was for violating the grazing policy by eating a piece of salvage danish. Petersen never spoke specifically with Jelinek prior to or at the time of Johnson's termination. Costco's personnel policy regarding the termination of employees with ten years of experience, like Johnson, requires that the decision to terminate such an employee be done by an executive vice-president. In other words, in accordance with Costco's personnel policy, the decision to terminate Johnson must have come directly from Jelinek, Costco's executive vice-president.

¶ 10 Subsequent to Johnson's discharge, Sherry Thompson, an employee in the service deli at Costco was observed eating a piece of pie dough. Thompson admitted eating the pie dough and also acknowledged that she understood the grazing policy—"if you don't buy it, don't eat it"—prior to eating the pie dough. Thompson did this without approval from a manager or supervisor and was eventually turned in to Costco management. Despite eating pie dough without paying for it, Thompson remained employed at Costco and did not undergo any disciplinary measures.

¶ 11 Additional facts will be discussed where relevant.

¶ 12 Johnson filed an action under the Wrongful Discharge From Employment Act, §§ 39-2-901 -915, MCA. Costco denied all of Johnson's allegations and a jury trial was held on September 20 and 21, 2004. After Johnson had presented his case-in-chief, Costco moved for judgment as a matter of law. The District Court deferred ruling and then granted the motion while Costco was presenting its case-in-chief. The court held that Johnson's violation of the grazing policy was good cause as matter of law for termination pursuant to §§ 39-2-903 and 904, MCA. Johnson appeals.


¶ 13 The legal principles governing whether a motion for judgment as a matter of law should be granted or denied by the trial court are well settled. Judgment as a matter of law is properly granted only when there is a complete absence of any evidence which would justify submitting an issue to a jury and all such evidence and any legitimate inferences that might be drawn from the evidence must be considered in the light most favorable to the party opposing the motion. Williams, ¶ 19 (citing Marie Deonier v. Paul Revere Life Ins. Co., 2004 MT 297, ¶ 18, 323 Mont. 387, ¶ 18, 101 P.3d 742, ¶ 18; Bevacqua v. Union Pacific R., 1998 MT 120, ¶ 46, 289 Mont. 36, ¶ 46, 960 P.2d 273, ¶ 46; Durden v. Hydro Flame Corp., 1998 MT 47, ¶ 22, 288 Mont. 1, ¶ 22, 955 P.2d 160, ¶ 22). Courts should exercise the greatest self-restraint in interfering with the constitutionally mandated processes of a jury decision. Ryan v. City of Bozeman, 279 Mont. 507, 510, 928 P.2d 228, 230 (1996). Judgment as a matter of law is not proper if reasonable persons could differ regarding conclusions that could be drawn from the evidence. Kearney v. KXLF Communications, Inc., 263 Mont. 407, 417, 869 P.2d 772, 777-78 (1994).

¶ 14 It is also well settled that this Court's standard of review of appeals from district court orders granting or denying motions for judgment as a matter of law is identical to that of the district court. Williams, ¶ 19, (citing Deonier ¶ 18; Durden, ¶ 21; Ryan, 279 Mont. at 510, 928 P.2d at 229-30). Having said that, however, this Court has used two inconsistent approaches in our application of these legal principles to our review of cases on appeal where the issue involves the propriety of the trial court's grant or denial of a motion for judgment as a matter of law.

¶ 15 Basically, our cases fall into two categories—those that apply a de novo standard of review, thus treating our review of the trial court's decision as a legal question—and those that apply an abuse of discretion standard of review, effectively treating the court's decision as an evidentiary issue. We have long held that "[a] cause should never be withdrawn from the jury, unless the conclusion from the facts follows necessarily, as a matter of law, that a recovery cannot be had." Johnson v. Chicago, M & St. P.R. Co., 71 Mont. 390, 394, 230 P. 52, 53 (1924) (emphasis added). Further, we explained, "[judgment as a matter of law] may be granted only where it appears as a matter of law that plaintiff cannot recover upon any view of the evidence." Standish v. Business Men's Assur. Co., 172 Mont. 264, 265, 563 P.2d 552, 553 (1977) (citing Parrish v. Witt, 171 Mont. 101, 103, 555 P.2d 741, 742 (1976); Slagsvold v. Johnson, 168 Mont. 490, 492, 544 P.2d 442, 443 (1975)). We have since repeatedly affirmed our treatment of the standard of review for the grant or denial of judgment as a matter of law as stated in Johnson, Standish, Parrish, and Slagsvold in our decisions in Wilkerson v. Sch. Dist. No. 15, Glacier Cty., 216 Mont. 203, 211, 700 P.2d 617, 622 (1985); Hash v. State, 247 Mont. 497, 500, 807 P.2d 1363, 1365 (1991); Pierce v. ALSC Architects, P.S., 270 Mont. 97, 103, 890 P.2d 1254, 1257 (1995); and Ryan, 279 Mont. at 510, 928 P.2d at 229-30.

¶ 16 It appears that we started down the abuse of discretion road as far back as 1974, when we held that the "granting of the motion for [judgment as a matter of law] was not an abuse of the trial court's discretion." Wallin v. Kinyon's Estate, 164 Mont. 160, 166-67, 519 P.2d 1236, 1239 (1974). Then, following Wallin, and without simply string-citing the cases, we applied the ...

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