Langager v. Crazy Creek Products, Inc.

• Citation: 954 P.2d 1169,287 Mont. 445,1998 MT 44
• Decision Date: 03 March 1998
• Docket Number: No. 97-179,97-179
• Parties: , 14 IER Cases 89, 1998 MT 44 In re the Wage Claim of Sharon LANGAGER, Claimant, Respondent, and Cross-Appellant, v. CRAZY CREEK PRODUCTS, INC., Respondent, Appellant, and Cross-Respondent.
• Court: United States State Supreme Court of Montana

Page 1169

954 P.2d 1169

287 Mont. 445, 14 IER Cases 89, 1998 MT 44

In re the Wage Claim of Sharon LANGAGER, Claimant Respondent, and Cross-Appellant, v. CRAZY CREEK PRODUCTS, INC., Respondent, Appellant, and Cross-Respondent.

No. 97-179.

Supreme Court of Montana.

Submitted on Briefs Dec. 11, 1997.

Decided March 3, 1998.

Kent E. Young, Red Lodge, for Appellant.

Sharon Langager, pro se., Roberts, for Respondent.

Robert Campbell, Legal Services, Department of Labor and Industry, Helena, for Intervenor State of Montana.

REGNIER, Justice.

¶1 On April 24, 1996, claimant Sharon Langager filed an action in the District Court for the Thirteenth Judicial District in Carbon County, seeking judicial review of an order issued by the Department of Labor and Industry's Board of Personnel Appeals. The order denied Langager's request that her employer, Crazy Creek Products, Inc., be required to compensate her for two weeks of unused vacation time. On December 27, 1996, the District Court issued its order reversing the decision of the Board of Personnel Appeals, and granting a judgment in Langager's favor and against Crazy Creek in an amount equal to one week of vacation pay plus penalties. It is from this order that Crazy Creek appeals, and Langager cross-appeals. For the reasons discussed below, we reverse.

¶2 We find the following issues dispositive on appeal:

¶3 1. Did the District Court err in concluding that Crazy Creek's personnel manual did not apply to Langager and thus did not alter the terms of her employment?

¶4 2. Did the Board of Personnel Appeals err in concluding that Langager was not entitled to vacation pay pursuant to the terms of Crazy Creek's personnel manual?

FACTUAL AND PROCEDURAL BACKGROUND

¶5 Langager began working for Crazy Creek on June 3, 1992, at which time Crazy Creek had a verbal policy regarding vacation time pursuant to which each employee was entitled to one week of paid vacation upon completion of one full year of employment. The verbal policy additionally provided that an employee would earn one week of paid vacation after completing each succeeding year of employment. For eligible employees to take advantage of accrued vacation, Crazy Creek required only that they provide the company with thirty-days' notice.

¶6 Langager continued to work for Crazy Creek until June 6, 1994. In February 1994, several months prior to Langager's separation, Crazy Creek adopted a written manual of Employment Benefits and Policies For All Personnel (personnel manual). The personnel manual modified the company's policy with respect to paid vacation, providing specifically as follows:

Vacation: CCP provides one week paid vacation per year after the completion of the first year of employment (1st anniversary date). After the completion of the second year of employment (2nd anniversary date) CCP will provide two weeks paid vacation per year.

Employees must use their vacation within the year after it is earned. Vacation does not carry over from year to year. (ie. At the end of the first year an employee has one week of paid vacation accrued. Vacation must be taken before the end of the second year--2nd anniversary date.) Vacation must be used all at once in consecutive days.

If a company holiday falls within the vacation period it will be considered as a paid holiday and not vacation time. This day of vacation can be used either at the beginning or the end of the vacation time.

An employee must work the regularly scheduled work days before and after the paid vacation period in order to be eligible to receive vacation pay.

Vacations are allowed on a first come first served basis. In the event more than one employee requests the same days as another, management reserves the right to deny the second request received at their discretion.

Requests for vacation should be made at least 30 days prior to the time requested. Please plan ahead.

¶7 Crazy Creek held a meeting on February 3, 1994, during which it provided each of its employees, including Langager, with a copy of the new personnel manual. On February 8, 1994, Crazy Creek convened a second meeting, at which Langager was present, for the purpose of discussing the personnel manual. In February 1994, following distribution of the personnel manual, Langager asked for and received permission to take her two weeks of vacation in late June of that year.

¶8 In early June 1994, Langager secured other employment. Thus, on June 6, 1994, Langager provided Crazy Creek with notice that she intended to quit her job two weeks later, at the start of her scheduled vacation. Upon learning of Langager's plans, however, the Crazy Creek manager informed her that she would not receive any vacation pay if she did not return to work following her vacation. In response, Langager opted to terminate her employment effective June 6, 1994, and thus did not work her regular shift either prior to or following her scheduled vacation period.

¶9 Crazy Creek did not provide Langager with two weeks of vacation pay following her separation from the company. Thus, on July 5, 1994, Langager filed a wage claim with the Montana Department of Labor and Industry (DOL), claiming entitlement to $520 in vacation pay. On July 28, 1994, DOL compliance specialist Jim Dobbins authored a written determination in which he ruled that Crazy Creek owed Langager two weeks of vacation pay, in an amount of $520, along with penalties pursuant to § 39-3-206, MCA.

¶10 Crazy Creek subsequently requested a hearing, which was conducted telephonically by DOL hearing officer Stan Gerke on June 1, 1995. On October 13, 1995, the Hearings Bureau issued its findings of fact, conclusions of law, and order in which it ordered that Crazy Creek pay Langager $520 for two weeks of earned vacation, as well as $572 in penalties pursuant to § 39-3-206, MCA.

¶11 Crazy Creek appealed to the DOL Board of Personnel Appeals, which issued its findings of fact, conclusions of law, and order on March 25, 1996. The Board of Personnel Appeals reversed the hearing officer's decision, concluding that because Langager did not work the shifts prior to and after her vacation period, she did not qualify for vacation pay pursuant to the terms set forth in Crazy Creek's personnel manual. The Board of Personnel Appeals thus held that Crazy Creek did not owe Langager the vacation pay to which she claimed entitlement.

¶12 Langager, acting pro-se, chose to appeal the Board of Personnel Appeals' decision and filed a petition for judicial review in District Court on April 24, 1996. On June 3, 1996, the DOL filed a motion to intervene, which the District Court granted in an order dated June 26, 1996. On December 27, 1996, the District Court issued an order reversing the Board of Personnel Appeals' determination that Langager was not entitled to vacation pay. The District Court instead concluded that Crazy Creek's personnel manual did not apply to Langager, and that she was entitled to recover one week of vacation pay pursuant to the company's prior verbal vacation policy, as well as penalties. Crazy Creek filed a notice of appeal on February

21, 1997, and Langager filed a notice of cross-appeal on March 6, 1997.

DISCUSSION

¶13 A district court must review an administrative agency's findings of fact to determine "whether the findings are clearly erroneous in view of the reliable, probative and substantial evidence in the whole record." State Personnel Div. of Dep't of Admin. v. Board of Personnel Appeals, Div. of Dep't of Labor and Industry (1992), 255 Mont. 507, 511, 844 P.2d 68, 71(citing Department of Revenue v. United Parcel Service, Inc. (1992), 252 Mont. 476, 482, 830 P.2d 1259, 1263); see also § 2-4-704, MCA. Furthermore, the district court will uphold an agency's conclusion of law "if the agency's interpretation of the law is correct." State Personnel Division of Dep't of Admin., 255 Mont. at 511, 844 P.2d at 71 (citing Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603). We in turn employ the same standards when reviewing the district court's decision, and must accordingly determine whether an agency's findings of fact are clearly erroneous and whether its conclusions of law were correct. See Swan Corp. v. Department of Revenue (1988), 232 Mont. 210, 213, 755 P.2d 1388, 1390.

ISSUE 1

¶14 Did the District Court err in concluding that Crazy Creek's personnel manual did not apply to Langager and thus did not alter the terms of her employment?

¶15 In its order reversing the decision of the Board of Personnel Appeals, the District Court ultimately concluded that the paid vacation policy contained in Crazy Creek's written personnel manual did not apply to Langager, but that the terms of her employment were instead governed by the verbal vacation policy in effect at the time she began working for Crazy Creek in June 1992. In so concluding, the court relied upon our decision in Gates v. Life of Montana Ins. Co. (1982), 196 Mont. 178, 183, 638 P.2d 1063, 1066, in which we held that "[a]n employee handbook distributed after the employee is hired does not become a part of that employee's contract." In Gates, we concluded that an employee handbook distributed two years after the plaintiff was hired "constituted a unilateral statement of company policies and procedures" and that it could not have modified the employee's contract "because there was no new and independent consideration for its terms" and because "its terms were not bargained for." Gates, 196 Mont. at 183, 638 P.2d at 1066.

¶16 In the present case, the court noted that Crazy Creek had adopted its personnel manual long after Langager was hired, and reasoned that because "[t]he parties do not argue and the record does not reflect that the new terms were bargained for, nor that there was new and independent consideration," the "new manual does not constitute a modification of the terms of the claimant's employment." The court thus concluded the...