02/17/2026
DA 25-0165 Case Number: DA 25-0165
IN THE SUPREME COURT OF THE STATE OF MONTANA
2026 MT 26
LAUREN DIFOLCO and SHERRY SPEAR,
Petitioners and Appellees,
v.
MONTANA STATE HOSPITAL-DEPARTMENT OF PUBLIC HEALTH AND HUMAN SERVICES,
Respondent and Appellant.
APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte-Silver Bow, Cause No. DV-24-17 Honorable Kurt Krueger, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Justin Kraske, Staff Attorney, Department of Social and Health Services, Helena, Montana
For Appellees:
Adam Cook, Everett Cook Law, Anaconda, Montana
Submitted on Briefs: December 3, 2025
Decided: February 17, 2026
Filed:
__________________________________________ Clerk Justice Beth Baker delivered the Opinion of the Court.
¶1 Lauren Difolco and Sherry Spear filed sex discrimination claims with the Montana
Department of Labor and Industry’s Human Rights Bureau after the Montana State
Hospital awarded their male coworker, Trent Martin, a promotion. The Hearing Officer
found that the Hospital hired Martin based on his interview performance and did not
discriminate against Spear and Difolco. The Human Rights Commission (HRC) affirmed.
The District Court reversed, concluding that five of the Hearing Officer’s factual findings
were clearly erroneous. The court awarded damages and attorney fees to Difolco and
Spear. The dispositive issue on appeal is whether the District Court exceeded its authority
under the Montana Administrative Procedure Act when it reversed the HRC’s decision.
We reverse the District Court and reinstate the HRC’s final agency decision.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 In 2019, the Montana State Hospital in Warm Springs, Montana, hired Lauren
Difolco and Sherry Spear as recreation therapists. Spear and Difolco had bachelor’s
degrees in recreation therapy and prior experience as recreation therapists. The Hospital
hired Trent Martin as a recreational services aid in May 2020, and he was promoted to
recreation therapist seven months later. Martin previously worked as a missionary, an
outdoor program coordinator at a youth residential center, a U-Haul and storage facility
manager, and a wilderness program field instructor. Martin had neither a bachelor’s degree
in recreation therapy nor, prior to his promotion at the Hospital, experience as a recreation
therapist.
2 ¶3 In July 2021, the Hospital sought to hire a Treatment Rehabilitation Manager
(TRM), a mid-level management position that oversees the Hospital’s rehabilitative
program and staff. Justin Lanes, a human resource generalist for the Hospital, created the
TRM job posting. It required the following minimum qualifications: (1) a bachelor’s
degree in rehabilitation therapy or a related field, (2) a minimum of four years of
management experience in a psychiatric setting “with work assignments including
management of a clinical area and supervision of staff,” and (3) Certified Therapeutic
Recreation Specialist preferred. Interested applicants were asked to submit the Hospital’s
online application form along with a resume and cover letter. The job posting contained
the following disclaimer: “Candidates will be evaluated to determine if they meet the
minimum qualifications listed above and on the extent to which the application materials
show the candidate possess[es] the knowledge, skills, and abilities associated with this
position . . . . Candidates whose application and supporting documentation . . . do not
clearly indicate all minimum qualifications are met will not be considered.”
¶4 Five current Hospital employees applied for the TRM position: Lauren Difolco,
Sherry Spear, Chad Peterson, Trent Martin, and Jamie Farmer. Lanes screened the
applications to determine whether the candidates met the minimum qualifications. Lanes
determined that only Peterson was minimally qualified. He recommended that the hiring
manager, George Sich, reject the remaining applications and interview Peterson.
¶5 Sich was concerned that Lanes recommended only one candidate for an interview.
Because of its frequent limited applicant pools, the Hospital commonly included in job
3 postings the alternative minimum qualification that “[o]ther combinations of experience
and education may be considered on a case by case basis.” Lanes forgot to include this
alternative in the TRM posting, which closed before he could update it. After Sich
expressed concern about advancing just one applicant, Lanes applied the alternative (the
“catch-all provision”) to the existing applicant pool and recommended that the Hospital
interview all five.
¶6 George Sich, Jamie Foy, and Holly Callarman conducted the interviews for the
TRM position. They asked candidates a series of behavioral-based questions about their
leadership and management experience. All three interviewers determined that Martin
outperformed the others and that he possessed the leadership skills necessary for the TRM
position. The Hospital hired Martin based on the panel’s recommendation. Spear and
Difolco felt upset and humiliated when they learned that Martin received the position
because he lacked their education and experience in recreation therapy.
¶7 Spear and Difolco filed separate complaints with the Human Rights Bureau in
September 2021. They alleged that the Hospital discriminated against them on the basis
of sex when it hired Martin as TRM because they were qualified for the position and Martin
was not.1 The Hospital denied these allegations, explaining that it hired Martin because he
was the most qualified candidate.
1 The complaints also alleged that the Hospital discriminated against the women during the hiring of two other management positions. Spear and Difolco focused on the July 2021 TRM position throughout the proceedings and do not challenge the other hiring decisions on appeal.
4 ¶8 A Hearing Officer was appointed and conducted a consolidated contested case
hearing on Spear and Difolco’s claims. Spear and Difolco testified, along with Martin,
Lanes, Callarman, Sich, and Foy. The Hearing Officer issued his Findings of Fact,
Conclusions of Law and Notice of Issuance of Administrative Decision on August 22,
2023. The Officer found that although Spear and Difolco established prima facie cases of
sex discrimination,2 they failed to prove that Martin’s interview performance was mere
pretext and not the Hospital’s legitimate, nondiscriminatory reason for hiring him. Based
on these findings, the Hearing Officer concluded that the Hospital did not unlawfully
discriminate against Spear and Difolco. Spear and Difolco appealed to the HRC. The HRC
determined that the Hearing Officer’s findings were supported by substantial evidence and
affirmed.3
¶9 Difolco and Spear petitioned for judicial review of the HRC’s final agency decision
in the Second Judicial District Court, Butte-Silver Bow County. Difolco and Spear argued
that several administrative findings were not supported by substantial evidence. The
District Court agreed and reversed the HRC. The court found that the contested findings
were clearly erroneous, that the Hospital’s proffered reason for hiring Martin was mere
2 The Hearing Officer stated that, since Spear and Difolco were granted interviews for the position, “it is deemed that they met the minimum qualifications” and thus had carried their initial burden to establish a prima facia case of sex discrimination in relation to the hiring decision for the TRM position. 3 The HRC found one error in the Hearing Officer’s findings. Finding of Fact No. 3 provided that “DiF[o]lco had amassed 27 credit hours towards a therapeutic education degree from Lehman College, but never earned a bachelor’s degree.” Because the evidence established that Difolco did have a bachelor’s degree and had amassed 27 hours towards a graduate degree, the HRC modified Finding of Fact No. 3 accordingly. 5 pretext for unlawful discrimination, and that Difolco and Spear were disparately impacted
by the Hospital’s discriminatory hiring process. The court awarded Difolco and Spear
damages and ordered the Hospital to pay their attorney fees and costs.
STANDARD OF REVIEW
¶10 The Montana Administrative Procedure Act (MAPA) governs proceedings before
the HRC. Blaine Cnty. v. Stricker, 2017 MT 80, ¶ 16, 387 Mont. 202, 394 P.3d 159. Courts
review the HRC’s decision under MAPA, which prohibits reviewing courts from
substituting their own judgment “for that of the agency as to the weight of the evidence on
questions of fact.” Section 2-4-704(2), MCA. A court may reverse the agency under
MAPA if the appellant’s substantial rights have been prejudiced because, applicable here,
“the administrative findings, inferences, conclusions, or decisions are . . . clearly erroneous
in view of the reliable, probative, and substantial evidence on the whole record [or]
arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted
exercise of discretion . . . .” Section 2-4-704(2)(a)(v), (vi), MCA. This standard governs
“both the District Court’s review of the agency’s decision and this Court’s subsequent
review of the District Court’s decision.” Blaine Cnty., ¶ 16 (citation omitted).
DISCUSSION
¶11 The Montana Human Rights Act (MHRA) prohibits employers from discriminating
against current or prospective employees because of their sex. Section 49-2-303(1), MCA;
Mont. State Univ.-N. v. Bachmeier, 2021 MT 26, ¶ 27, 403 Mont. 136, 480 P.3d 233; see
also Thompson v. Bd. of Trs., 192 Mont. 266, 270, 627 P.2d 1229, 1231 (remarking that
6 § 49-2-303(1)(a), MCA, is a “strongly worded directive[] from the legislature prohibiting
employment discrimination and encouraging public employers to hire, promote and
dismiss employees solely on merit.”). The MHRA prohibits sex discrimination in the
“term[s], condition[s], or privilege[es] of employment,” including job application
procedures, hiring decisions, and awarding promotions. Section 49-2-303(1)(a), MCA;
Admin. R. M. 24.9.604(2) (1996).
¶12 To establish a prima facie case of discrimination, the charging party must prove that
(1) they were a member of a protected group, (2) they applied for and were qualified for
the position, (3) the employer rejected them, and (4) the position remained open. Mont.
Rail Link v. Byard, 260 Mont. 331, 344, 860 P.2d 121, 129 (1993) (citing McDonnell
Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S. Ct. 1817, 1824 (1973)); Admin. R. M.
24.9.610(2)(a) (1996). Both the HRC and the District Court concluded that Spear and
Difolco successfully established prima facie cases of discrimination. This determination
is not at issue on appeal.
¶13 Once the charging party establishes a prima facie case of discrimination, the burden
of production shifts to the employer to produce evidence that it had a legitimate,
nondiscriminatory reason for its hiring decision. Mont. Rail Link, 260 Mont. at 344, 860
P.2d at 129 (citing McDonnell Douglas Corp., 411 U.S. at 802, 93 S. Ct. at 1824);
Admin. R. M. 24.9.610(3) (1996). Because the charging party has the burden of persuasion
throughout the analysis, the employer rebuts the charging party’s prima facie case if it sets
forth some legitimate reason for its decision. Mont. Rail Link, 260 Mont. at 344, 860 P.2d
7 at 129 (citing McDonnell Douglas Corp., 411 U.S. at 802-03, 93 S. Ct. at 1824-25). The
charging party may prevail by proving, by a preponderance of the evidence, that the
employer’s proffered reason is mere pretext for unlawful discrimination. Johnson v.
Bozeman Sch. Dist., 226 Mont. 134, 140, 734 P.2d 209, 213 (1987) (citing McDonnell
Douglas Corp., 411 U.S. at 805, 93 S. Ct. at 1826). This burden merges with the
employee’s ultimate burden of proving that the employer intentionally discriminated
against them. Johnson, 226 Mont. at 140, 734 P.2d at 213 (quoting Texas Dep’t of Cmty.
Affairs v. Burdine, 450 U.S. 248, 256, 101 S. Ct. 1089, 1095 (1981)).
¶14 The Hospital challenges the District Court’s determination that Findings 23, 29, 84,
92, and 94 were clearly erroneous. The Hospital alleges that the District Court reweighed
the evidence, leading it to erroneously conclude that the Hospital’s proffered reasoning for
hiring Martin was pretext for discrimination. Spear and Difolco respond that the District
Court properly found error in the findings and correctly reversed the HRC’s decision.
¶15 When determining whether substantial credible evidence supports a hearing
officer’s findings, the reviewing court views the evidence in the light most favorable to the
prevailing party. Blaine Cnty., ¶ 26. The court does not ask whether evidence exists to
support different findings. Cotton v. Mont. Dep’t of Corr., 2024 MT 278, ¶ 19, 419 Mont.
167, 559 P.3d 824. “Substantial evidence is evidence that a reasonable mind might accept
as adequate to support a conclusion.” Blaine Cnty., ¶ 26 (quoting State Pers. Div. v. Dep’t
of Pub. Health & Human Servs., Child Support Div., 2002 MT 46, ¶ 19, 308 Mont. 365,
43 P.3d 305). Substantial evidence must be more than a “mere scintilla” but may be less
8 than a preponderance. Mont. State Univ.-N., ¶ 30. Because a hearing officer “is in the
unique position of hearing and observing all testimony entered in this case . . . [, t]he
findings of the hearing [officer], especially as to witness credibility, are therefore entitled
to great deference.” Benjamin v. Anderson, 2005 MT 123, ¶ 37, 327 Mont. 173, 112 P.3d
1039 (citation omitted).
¶16 If substantial evidence supports the administrative findings, a reviewing court may
not disturb them. In re Hofer, 2005 MT 302, ¶ 21, 329 Mont. 368, 124 P.3d 1098. We
thus analyze each of the Hearing Officer’s contested findings to determine if they are
supported by substantial evidence.
Finding No. 23
¶17 The Hearing Officer’s Finding No. 23 states:
Through its application process, MSH HR first screens applicants to see if they meet the minimum qualifications. Again, if the applicant does not meet the minimum qualifications, other combinations of education and experience can be considered particularly if there are a small number of applicants.
¶18 In support of this finding, the Hearing Officer considered the following exchange
between counsel and Callarman regarding the Hospital’s hiring process:
Q. Would you agree with me that if a candidate does not meet the minimum qualifications, they should not advance to the interview stage?
A. I would say that potentially depends on the process that is happening at the time . . . . There are at times when, when we post, the State has a, a little, like, blurb at the bottom that we can use a training assignment. So in certain cases, if you do not have qualified candidates, you do have the capability of interviewing someone who does not meet fully with the qualifications and you could consider them for what's called a training assignment, that they could meet the qualifications within a certain time period after they are hired.
9 Q. Because you wouldn’t rely — [a]nd I believe the caveat you’re referencing is one that says we will consider other forms of education and experience —
A. No.
Q. — on a case-by-case basis.
Callarman agreed that the training assignment exception was not included in the TRM
posting. But she clarified that the training assignment is distinct from the catch-all
provision that Lanes applied to the TRM applicant pool. The training assignment
exception, Callarman explained, is instead used in rare circumstances pursuant to State
policy when there is an extremely limited applicant pool and none of the applicants can
satisfy the minimum qualifications. Foy and Sich explained that, on the other hand, the
Hospital frequently includes the “other combinations” catch-all in its job postings because
it has a limited applicant pool and needs latitude to fill key positions. Despite Lanes’s
oversight in the posting, the Hearing Officer remarked that the catch-all gave the Hospital
discretion to advance Martin, Spear, and Difolco to the interview stage.
¶19 The District Court concluded that Finding No. 23 was erroneous. It relied on
Callarman’s testimony to find that the catch-all provision applied only if none of the
applicants meet the minimum qualifications. The court reasoned that Spear and Difolco
met the minimum qualifications and therefore the Hospital should not have applied the
catch-all provision to qualify Martin for an interview. The Hospital argues that the court
relied on an erroneous interpretation of Callarman’s testimony to reach its conclusion.
10 ¶20 Callarman testified that the Hospital utilizes the training assignment exception, not
the “other combinations” catch-all, in the rare circumstance that there are no qualified
applicants for a position. The Hospital applies the catch-all provision so that, in its
discretion, it may interview applicants who are minimally qualified with or without
considering the catch-all. The Hearing Officer’s Finding No. 22, which the parties do not
contest, reflects this distinction, reading:
Due to the limited applicant pool in the communities surrounding Warm Springs, where MSH is located, most job notifications contained a catch-all provision that allowed HR to consider an applicant’s experience and education that are not part of the minimum qualifications on a case-by-case basis. The inclusion of this catch-all provision allowed MSH to open the interview pool to more applicants who may have not met the minimum qualifications stated in the job posting.
Based on the above testimony and Finding No. 22, a reasonable factfinder could find that
the catch-all provision granted the Hospital flexibility to expand its pool of candidates by
considering individuals who did not meet the rigid minimum qualifications—even if there
were qualified applicants in the pool. Substantial evidence supports the Hearing Officer’s
finding that the Hospital uses the catch-all as an alternative basis for applicants to satisfy
the minimum qualifications, and therefore Martin, Spear, and Difolco all properly
advanced to the interview stage. The District Court’s misapprehension of Callarman’s
testimony that the training assignment exception was analogous to the catch-all provision
was clearly erroneous in light of the substantial evidence in the record.
Finding No. 29
¶21 The Hearing Officer’s Finding No. 29 provides:
11 Performance in the interview is a major component in determining who should be selected for the position. An interview is critical in the decision-making process as it allows the applicant to demonstrate their knowledge, skills, and abilities.
¶22 During the hearing, members of the hiring panel testified that they asked applicants
behavioral-based questions about their experience mentoring others, working with a team,
managing interpersonal conflict and competing priorities, and analyzing and evaluating
treatment strategies. Callarman testified that an applicant’s interview performance is
important because “as much as the application can on paper demonstrate the minimum
qualifications, the interview is their opportunity to demonstrate how they are able to apply
that knowledge . . . .” Callarman explained that the hiring panel wanted to determine if the
candidates possessed the “soft skills” in leadership and management that the TRM position
required. Foy echoed this testimony, stating that an applicant’s “skills, knowledge, and
education related to recreation rehabilitative services” are hard skills that the Hospital can
teach, whereas it cannot teach management skills. Callarman said that the interview panel
asked all five applicants the same questions and that behavior-based questions are standard
in the human resources industry “based on the concept that past behavior predicts future
performance.”
¶23 The District Court found that the Hospital’s interview process for the TRM position
was inherently flawed, rendering Finding No. 29 clearly erroneous. The court explained:
The job description allocates a majority of the job duties to rehabilitative duties such as overseeing treatment plans, assigning and monitoring treatment activities, and ensuring quality patient care. Managerial duties only account for 10% of the job. The interview did not allow the Petitioners to demonstrate the knowledge, skills, and abilities in all areas that the job description required. Nor did it allow for them to talk about their education.
12 The Hospital argues that the District Court ignored witness testimony that supports Finding
No. 29. Spear and Difolco respond that the court properly found the Hearing Officer’s
finding clearly erroneous because the interview process was entirely subjective and thus
an improper assessment of whether a candidate was qualified to be the TRM.
¶24 MAPA does not grant a reviewing court authority to ignore administrative findings
or to substitute its own opinion for that of the agency. In re Hofer, ¶ 21; Peretti v. Dep’t
of Revenue, 2016 MT 105, ¶ 18, 383 Mont. 340, 372 P.3d 447; § 2-4-704(2), MCA. The
Hearing Officer found Spear and Difolco’s argument that the Hospital improperly utilized
a subjective interview process unpersuasive because they did not cite any human resource
standard or legal precedent in support of this argument. Their argument on appeal similarly
lacks support on this point. The District Court substituted its own opinion for the Hearing
Officer’s when it determined that the interview process was flawed because it applied
subjective standards. It likewise failed to cite authority in support of its analysis. The court
ignored evidence demonstrating that the interview process was modeled after industry
standards and designed to ascertain whether an applicant possessed the desired skills for
the position. The Hearing Officer had substantial support in the record for its finding. We
conclude that the District Court abused its discretion when it reversed Finding No. 29 based
on its own qualitative assessment of the Hospital’s interview process.
Finding No. 85
¶25 The Hearing Officer found:
13 Following the original screening of the applicants for the TRM position, Martin, Spear, and Difolco were all initially denied interviews because none of them met the requisite minimum qualifications.
¶26 Lanes testified that, based on his review of Difolco’s application materials, he
believed that Difolco did not satisfy the minimum qualifications because she lacked a
bachelor’s degree in a related field and the required supervisory experience. Counsel
confronted Lanes with Difolco’s resume that declared she had a bachelor’s degree in
therapeutic recreation and asked, “And that’s not a related field, that is the field; right?”
(Emphasis added). Lanes responded, “I’m not going to say yes to that, because, at the time,
I don’t know if I would have said therapeutic recreation was exactly the same as
rehabilitation therapy. Now that I’ve been with the hospital for two years, I probably would
say that is equivalent or similar.” Lanes testified that although Difolco demonstrated some
supervisory and management experience on her resume, he did not believe that she
possessed four years of experience in a psychiatric setting with work assignments including
management of clinical area and supervision of staff.
¶27 Spear initially failed to submit her resume with her application. When she provided
her resume to Lanes upon his request, he discovered that she had not updated it to reflect
her position at the Hospital. Lanes testified that he believed Spear also lacked the required
supervisory experience. Although she had roughly nineteen years of supervisory
experience at Acadia Montana, her resume and application did not clearly indicate that her
experience was in a psychiatric setting or that she had work assignments including
management of clinical area and supervision of staff. Lanes rejected Martin during the
14 initial screening because he also lacked the required education and experience. Lanes
emailed Foy and Sich with his rationale for rejecting the three applicants, and his email
was consistent with his hearing testimony.
¶28 The District Court concluded that Finding No. 85 was not supported by substantial
evidence because “[t]he evidence shows that both Spear[] and Difolco were qualified
applicants. The evidence also shows that Martin did not meet the minimum qualifications.”
The Hospital argues that the court overlooked evidence that Spear and Difolco’s TRM
applications were deficient. Spear and Difolco respond that the District Court was correct
and that the whole record demonstrates that Lanes was overly critical of the female
applicants.
¶29 When reviewing the agency’s findings, the reviewing court asks only whether
substantial credible evidence supports the trier’s findings and not whether the evidence
could have supported a different result. Blaine Cnty., ¶ 26. Lanes initially recommended
that the Hospital reject Spear, Difolco, and Martin’s applications, and the evidence shows
that all three had errors or deficiencies in their materials. Whether Lanes erroneously
determined that Spear and Difolco failed to satisfy the three original minimum
qualifications is immaterial. Lanes determined that they did not, and the record shows that
this was the reason he initially rejected all three applications. Lanes later recommended
that all three advance to the interview stage under the catch-all provision.
¶30 “[W]hether there is evidence of intent to discriminate is a pure question of fact.”
Blaine Cnty., ¶ 23 (citations and quotations omitted). Although a charging party does not
15 need to prove discriminatory intent to establish a prima facie case of sex discrimination in
a disparate impact case, a party may prove pretext with direct evidence that the employer’s
hiring decision was based on an unlawful motive. Admin. R. M. 24.9.612(1), (4) (1996).
There is substantial evidence to support the Hearing Officer’s determination that Spear and
Difolco did not prove that either Lanes’s initial screening or the Hospital’s decision to
re-examine it and advance the remaining applicants to the interview stage was based on
sex discrimination. Because Lanes’s initial review produced just one qualified applicant,
the Hospital exercised its judgment to expand the applicant pool and interview two male
and three female candidates.
¶31 Lanes testified that he was new to his position at the Hospital at the time he screened
the TRM applications. He explained that when he is going through candidates’
applications, he tries “to be as careful as possible. I’m human. I was relatively new to the
position, and I’m prone to mistakes just like any other person.” When counsel inquired
whether Lanes felt he was overly critical of Spear and Difolco’s applications, Lanes replied
“[a]bsolutely not,” and that if he made a mistake “it was absolutely inadvertent.” Lanes
provided recommendations regarding which candidate advanced to the interview stage, but
he testified that the hiring manager and human resources have final authority. Callarman
testified that although she agreed that Martin did not satisfy the minimum qualifications
without considering the catch-all, Martin’s management and leadership experience in
different settings likely constituted the “other combinations of education and experience”
required to advance to the interview stage after the Hospital expanded the applicant pool.
16 Although Lanes acknowledged that the screening process was imperfect and that he may
have made a mistake, the evidence does not support a finding that he acted with
discriminatory animus when determining whether an applicant was minimally qualified.
¶32 Lanes’s email and hearing testimony provide more than a scintilla of evidence to
support Finding No. 85. Mont. State Univ.-N., ¶ 30. The District Court improperly
substituted its judgment for the agency’s when it discredited Lanes’s testimony and
concluded that Finding No. 85 was erroneous. We therefore conclude that the District
Court abused its discretion.
Finding No. 92
¶33 The Hearing Officer found:
Regardless of [his inability to correct the omission of the catch-all], Lanes rescreened all the applicants considering the “other combinations” language, and passed all applicants on for interviews. This included Spear, Difolco, and Martin.
¶34 After Lanes recommended just Peterson for an interview, Sich inquired whether he
included the “other combinations” catch-all provision in the job posting. Although the
posting already had closed and he was unable to correct it, Lanes considered the catch-all
and recommended that all five candidates proceed to the interview phase. Spear and
Difolco’s counsel pressed Lanes on this matter at the hearing:
Q. You testified that you included this caveat after this email was sent, which includes the minimum education—or which includes the experience equivalency—
A. Uh-huh.
Q. — qualification. And then you recommended everybody for an interview?
A. I did.
17 Q. And you testified that it’s your job to go through these and make sure everybody is meeting the minimum qualifications?
A. Yes, sir.
Q. So after you guys recognized that we’re going to include this caveat which wasn't included in the original post, do you go back in and see if everybody is qualified again?
A. On this one, yeah.
Q. And it’s your testimony today that Trent Martin met those minimum qualifications even with that caveat?
A. So when it comes to the other combinations of education and experience may be considered on a case-by-case basis, unless a hiring manager is absolutely violating policy, procedure, discriminatory, doing something wrong, I let them make that decision. Because the hiring manager is the hiring manager.
Q. So essentially what you’re saying is that once you include that caveat, that caveat in there, everyone qualifies for an interview.
A. No, sir.
¶35 Lanes explained that he “highly encouraged” the hiring managers to interview
“anyone that may be of a similar situation . . . [who] might be a good candidate for the job
but maybe they were missing one of [the minimum qualifications] . . . .” Callarman
testified that adding the catch-all provision effectively allowed all applicants to receive an
interview.
¶36 During the October 7 District Court hearing, the District Judge asked the Hospital
how Martin qualified for an interview even considering the catch-all. Counsel for the
Hospital responded, “Justin Lanes just passed all five people on for an interview . . . . So
everyone was interviewed.” The District Court found no evidence to support the Hearing
18 Officer’s Finding No. 92. The court remarked, “In fact, during the oral arguments, [the
Hospital] conceded this point and stated that the applicants were not rescreened so much
as they were all just passed along to the interview stage after the caveat was found to be
absent from the original job post.” The Hospital argues that in reaching this conclusion,
the court improperly substituted its judgment for the agency’s and relied on a statement of
counsel outside of the record. Spear and Difolco respond that (1) Lanes conceded that
Martin did not meet any of the minimum qualifications and therefore he could not have
rescreened the applicants, and (2) the hiring manager made the final decision as to who
received interviews.
¶37 We first address Spear and Difolco’s assertion that Lanes conceded that Martin did
not meet any of the minimum qualifications. The portion of the hearing transcript that
Spear and Difolco reference to support their position misstates Lanes’s testimony. Lanes
agreed that Martin did not meet any of the “three minimum qualifications” listed.
(Emphasis added). In other words, Lanes determined that Martin may qualify for an
interview only after considering the catch-all, and he provided this recommendation to the
hiring manager.
¶38 We recognize that the record contains conflicting evidence regarding Lanes’s
“rescreening” the applicants. But the agency’s findings are not rendered erroneous simply
because conflicting evidence exists in the record. Benjamin, ¶ 37. “As long as we
determine that substantial credible evidence exists to support the findings of the trier of
fact, we may not re-weigh the evidence, but must instead defer to the Hearing [Officer].”
19 Benjamin, ¶ 37. Lanes’s testimony that he “went back to make sure all of the applicants
were qualified” constitutes more than a scintilla of evidence that supports Finding No. 95.
See Mont. State Univ.-N., ¶ 30.
¶39 The District Court determined that this finding was erroneous in part because of
counsel’s statement during oral argument. The Hearing Officer’s finding is supported by
substantial evidence, and the court abused its discretion by assigning more weight to
counsel’s statement than Lanes’s hearing testimony. See § 2-4-704(1), MCA (“The review
must be conducted by the court without a jury and must be confined to the [administrative]
record.”).
Finding No. 94
¶40 The Hearing Officer’s Finding No. 94 provides:
During the interview process, it was clear that Martin performed better than Spear and Difolco in their respective interviews.
¶41 The Hearing Officer concluded that the Hospital had “articulated a legitimate,
non-discriminatory basis for its decision to hire Martin over Spear and Difolco.”
¶42 Callarman, Sich, and Foy interviewed applicants for the TRM position. They
testified that overall, Martin outperformed Spear and Difolco. Callarman’s interview
decision sheet noted that Martin “[d]emonstrated managerial and leadership maturity in
responses. Showed strong knowledge of hospital-based programming. Showed team
orientation.” Sich testified that although Martin had weaker responses regarding
hospital-based programming, he demonstrated strong supervisory competence. Foy agreed
and remarked that Martin supported his responses with strong examples. Foy recalled that
20 Martin required his staff to take a behavioral assessment in a previous role to assess their
strengths and weaknesses. The panel members said that Spear and Difolco struggled to
articulate leadership skills and gave hesitant or vague answers. After the interviews, the
panel discussed the merits of each candidate and unanimously recommended that the
Hospital hire Martin for the TRM position.
¶43 The District Court found Finding No. 94 erroneous. The court reasoned that “there
is conflicting evidence regarding Martin’s knowledge of hospital based programming
which does not make it clear that Martin outperformed [Spear and Difolco] in the
interview.” The Hospital argues that the court erred because it cannot reverse a hearing
officer’s finding based on the existence of conflicting evidence. Spear and Difolco argue
that the court acted properly because the Hospital changed its justification for hiring
Martin. First, in its response to their complaint, the Hospital said that Martin was the best
qualified candidate for the position based on objective criteria. At the hearing, the Hospital
focused solely on Martin’s interview performance.
¶44 The Hospital’s alleged change of focus to Martin’s interview performance is
consistent with the Hospital’s initial response that Martin was the best qualified candidate.
The interviewers consistently testified that Martin displayed stronger leadership and
management skills than Spear and Difolco. The Hearing Officer found the interview
panelists credible. He credited Foy in particular, who recalled specific examples of
Martin’s performance and explained that the panel prioritized “soft” skills over “hard”
skills in a manager. The Hearing Officer explained that Spear and Difolco failed to prove
21 that the Hospital’s justification was mere pretext because they did not present any evidence
to contradict the panelists’ testimony. The record supports this determination. The panel
unanimously agreed that Martin received the job because of his interview performance,
and Spear and Difolco failed to produce evidence that this reason was completely
“unworthy of credence.” Mont. State Univ.-N., ¶ 53 (quoting Bollinger v. Billings Clinic,
2019 MT 42, ¶ 29, 394 Mont. 338, 434 P.3d 885); Admin. R. M. 24.9.612(4) (1996)
(explaining that pretext can be proven indirectly with evidence that the “articulated
business justification is not worthy of belief” or that the employer could have used equally
effective, alternative practices that did not have discriminatory effects). Viewing the
evidence in the light most favorable to the Hospital, substantial evidence thus existed to
support Finding No. 94, and the District Court did not have discretion to disturb it. In re
Hofer, ¶ 21; Blaine Cnty., ¶ 26.
¶45 The court had authority to reverse the HRC’s decision only if it found that the
Hearing Officer’s findings were “clearly erroneous in view of the reliable, probative, and
substantial evidence on the whole record.” Section 2-4-702(2)(a)(v), MCA. As discussed,
evidence is not rendered insubstantial merely because it is conflicting. Benjamin, ¶ 37.
Although the court was correct that conflicting evidence exists regarding Martin’s
knowledge of hospital-based programming, this was an insufficient basis for its conclusion
that Finding No. 94 was clearly erroneous.
22 Reinstatement of the HRC’s Final Agency Decision
¶46 As discussed, we conclude that each of the Hearing Officer’s challenged findings
are supported by substantial evidence. Based on the applicable MAPA standards, the
District Court was required to uphold those findings on judicial review. The record before
the HRC, viewed in a light most favorable to the Hospital, does not substantiate a
conclusion that its decision was “arbitrary or capricious or characterized by abuse of
discretion or clearly unwarranted exercise of discretion.” Section 2-4-704(2)(a)(vi), MCA.
We reverse the District Court and reinstate the HRC’s final agency decision in favor of the
Hospital.
¶47 The District Court also awarded damages and attorney fees to Spear and Difolco.
Under the Montana Human Rights Act, a hearing officer may award damages to an
employee if it finds that their employer engaged in discriminatory conduct. Section
49-2-506(1)(b), MCA. The Act also grants courts discretion to award the prevailing party
their attorney fees and costs. Section 49-2-505(8), MCA. Because we reinstate the HRC’s
determination that the Hospital did not discriminate against Spear and Difolco, we
accordingly reverse the District Court’s damages and attorney fees award.
CONCLUSION
¶48 Because the administrative record contains substantial evidence to support the
Hearing Officer’s findings, we conclude that the District Court exceeded its authority under
MAPA when it reversed the HRC. We reverse the District Court’s Order and its Judgment
23 awarding damages and attorney fees to Spear and Difolco. We reinstate the HRC’s final
agency decision.
/S/ BETH BAKER
We Concur:
/S/ CORY J. SWANSON /S/ JAMES JEREMIAH SHEA /S/ INGRID GUSTAFSON /S/ JIM RICE