HR Strange But True!
March 29, 2007

The Montana Supreme Court has reinstated a wrongful discharge action against Costco Wholesale brought by a baker who was fired for eating a stale danish.

The justices ruled that the trial court erred in granting Costco's motion for judgment as matter of law. Instead, the judge should have let a jury decide whether the company had applied its policy prohibiting employee "grazing" in an arbitrary manner.

Plaintiff Ellery Johnson had been working at Costco for more than 10 years when, on the morning of February 23, 2003, he picked up a box of "salvage" danish--out-of-date products slated to be thrown out or donated to a rescue mission--and bit into one. Displeased with the quality of the food, he threw out the rest of the box.

The incident was reported to Johnson's supervisor, who placed Johnson on leave pending further investigation. He was discharged a week later for violating the compamy's policy against grazing. That policy states that grazing is the use or consumption of company products, including "fresh products and any ingredients used in their preparation. 'If you didn't buy it, don't eat it!'"

Johnson sued, claiming the company had violated Montana's Wrongful Discharge from Employment Act (WDEA), which states in part that a discharge is wrongful if it "was not for good cause and the employee had completed the employer's probationary period of employment."

Unlike the vast majority of states, Montana does not adhere to the doctrine of employment at will. The state enacted the WDEA to balance the need to protect employees from wrongful terminations with an employer's need for protection from employee poor performance or bad behavior.

Johnson admitted that Costco had a policy against grazing throughout his employment with the company. But he argued that employees regularly ate pieces of food for the purpose of testing their quality, and sometimes even as snacks. While enforcement of the grazing policy was tightened beginning in 2001, other instances of grazing went unpunished, including one after Johnson's termination in which an employee admitted eating a piece of pie dough but was not disciplined.

Johnson's suit against Costco ended mid-trial when the judge ruled that the company was entitled to judgment as a matter of law because of Johnson's violation of the grazing policy.

The Montana high court disagreed. The evidence in the case could "lead a jury to believe that Costco did not have good cause to discharge Johnson because it applied its employment policy in an arbitrary and capricious manner," the court stated.

Source: Johnson v. Costco Wholesale, Mont., No. 2007 MT 43 (2/13/07)

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