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P became an employee of D in 1987 when D merged with P's former employer. P worked as a Senior Customer Service Representative at Delta's Gallatin Airport facility. P was generally rated as an 'outstanding D employee.' D terminated P after she submitted her payroll records with three incorrect entries which would have allowed her to collect about $ 250 in unearned wages. P acknowledges that there were mistakes on her payroll records, she has maintained all along that the mistakes were unintentional, and that such mistakes were common in D's payroll system. D claims P's mistakes were part of an intentional plan to defraud the company. The mistakes were contained in the 'Daily Work Schedule' and the 'Daily Attendance Record.' The Daily Work Schedule (DWS), is a sheet listing which shifts and in what position each employee had been assigned to work for that day. It would also list, among other things, which employees had taken that day off using vacation or compensatory ('comp') time. The DWS was prepared by D supervisors weekly, and approximately seven to ten days in advance. Schedule changes due to employees calling in sick or swapping shifts, for example, were not uncommon, and because the DWS was not always updated to include these changes, the actual number of hours that an employee worked might not be accurately reflected in the DWS. The Daily Attendance Record (DAR) is used by D to track the hours its employees worked and to calculate payroll. D employees were responsible for recording their own hours in the DAR on a daily basis, and D relied on its employees to record their information accurately. To take time off using accrued vacation or comp time, D required the employee to follow several procedures. The employee had to obtain approval from a Delta supervisor by having the supervisor sign a 'Time-Off Request Form.' The supervisor would then staple the signed Time-Off Request Form to the back of the DWS for the day that the employee was taking off. Second, the employee would have to make a special notation on her DAR so that she would be paid for her time off, but would also have her vacation or comp time account deducted. An employee using comp time to take all or part of a day off was similarly required to make a notation on the DAR so that her comp time account could be deducted. P's DAR for the first two weeks of May 1993, failed to note on the DAR that she had used vacation or comp time to take time off. These mistakes, left unnoticed, would have resulted in P being paid about $ 250 in unearned wages without having her vacation or comp time accounts deducted. P's supervisor, Pam Bracken discovered the mistakes on May 11, and informed the station manager, Jack Reese, on May 14. They both agreed that they would not ask P about the mistakes, but would return the DAR to where it belonged and see if Marcy would correct the mistakes on her own. The DAR binder was available to Marcy on May 11, 12, and 17, but P did not correct the mistakes. Reese and Bracken confronted Marcy on the morning of May 18. P stated that all of the false entries were the result of honest mistakes. P explained that on May 17, she had tried to find the DAR to see if her DAR entries were correct, but she could not find it because it was not hanging where it was supposed to be. Marcy stated that because she had taken off seven days that pay period using vacation and comp time, and had also switched shifts with another employee to take an eighth day off, she wanted to check the DAR to make sure it was correctly updated. After becoming busy handling a flight, she stated that she simply forgot to go back to look at the DAR. Marcy was not worried though, because she stated that mistakes were not uncommon in Delta's payroll system and that it was Bracken's usual practice to call employees to clarify any discrepancies between the DWS and DAR. Marcy assumed that she could correct any mistakes when Bracken asked her. Based on the false payroll entries, and a previous incident of alleged fraud involving personal long-distance phone calls of minimal value made by P, Reese prepared a report recommending termination. Other than interviewing Marcy, Reese did not question any witnesses or investigate any further. On May 18, Marcy's case was forwarded to Delta headquarters in Atlanta for review by a four-person panel consisting of Delta managers. Reese indicated that he thought P's actions were intentional, and recommended that P be terminated. The panel decided to terminate P. [On May 27, Reese called P into his office and offered P the right to resign, but she refused. P was then terminated. P sued D alleging in part wrongful discharge under the Montana WDEA. D removed the case. P's remaining claims were for wrongful discharge and defamation. D moved for a directed verdict, arguing that Marcy had failed to present any evidence that D's reason for terminating her was a pretext and not an honest reason, as required by the WDEA. The district court denied D's motion. A jury then found for D on the defamation claim but returned a verdict in favor of P on the wrongful discharge claim and awarded her $66,000 in damages. D moved for judgment as a matter of law, or in the alternative, for a new trial, arguing that the Montana WDEA does not provide a cause of action to a discharged employee where the employer has acted in good faith, even where the reason given for the discharge is based on mistaken facts. D argued that the WDEA required a plaintiff to prove that the stated reason for her discharge was pretextual and not the honest reason. The district court denied both motions and held that the WDEA did not require P to prove that D's stated reason for discharging her was pretextual. D appealed.

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