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The employment effects of a "good cause" discharge standard in Montana

  • Bradley T. Ewing
  • Charles M. North
  • Beck A. Taylor

With passage of a 1987 statute, Montana became the only state to adopt a "good cause" standard for discharge of employees with contracts of unspecified duration. The new statute was a legislative response to a series of Montana Supreme Court cases, starting in 1980, that gave otherwise at-will employees a broad right to sue for wrongful discharge. Estimating a policy intervention model using monthly time-series data on Montana employment, the authors find that the seminal Montana wrongful discharge case reduced annual employment growth in Montana by 0.46 percentage points, a statistically significant change, and that the "good cause" statute restored the original growth rate. The probable reason that it did so even though it defined conditions under which firings could, in principle, be contested is that, unlike the common law exceptions to employment-at-will that preceded it, it imposed important procedural and other limitations on discharged employees' legal recourse. (Free full-text download available at

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Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 59 (2005)
Issue (Month): 1 (October)
Pages: 17-33

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Handle: RePEc:ilr:articl:v:59:y:2005:i:1:p:17-33
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