…and the only way it got that way is because the business community was kind of into the idea. My story for AlterNet on the idiosyncratic history of America’s only “just cause” law:
How did Montana become a socialist hellscape? The same way most laws are passed: With the backing of the organized business community. In early 1982 the Montana Supreme Court decided that an implied covenant of “good faith and fair dealing” exists when an employer hires someone. Later rulings determined if an employer disregarded that tacit agreement, the spurned worker can sue to recover lost wages and benefits, along with compensatory and punitive damages. The court, in effect, killed employment-at-will in all but name, and workers started suing the hell out of the bosses. (Much of the historical and legal background on the law is found in Barry Roseman’s American Constitutional Society’s legal paper on the law and its effects on employment in Montana.)
“One of the reasons why the bill was necessary is that we did not have employment-at-will in Montana, even though the law said we did,” says Gary Spaeth, former Democratic legislator and lead sponsor of the 1987 law. “There were some outstanding judgments in the neighborhood of $200,000 to $400,000 that were passed down by juries. It was very inhibiting to how you operated your business in the state of Montana, creating almost a fear [of firing] among employers.”
Some members of the business community decided a specific “just-cause” law would be preferable to the court’s de-facto elimination of employment-at-will. But despite the law’s less-than-leftist origins, the protections for Montana workers still go far beyond those offered to non-union employees in any other American state (although both Puerto Rico and the U.S. Virgin Islands also have just-cause laws).
