Acklie v. Greater Omaha Packing Co., 306 Neb. 108

Background

Acklie was Greater Omaha’s corporate controller (hired 1986). In 1989 they executed a deferred compensation agreement providing for a general ledger account to be funded "at the discretion of [Greater Omaha]’s board." The agreement did not require employee contributions.
Vesting clause (¶6): 100% vested after either 10 consecutive years of service from the agreement date or upon attaining age 60, "so long as he does not violate" the noncompete, or upon death.
Acklie was terminated in 1994, turned 60 in 2006, demanded payment in 2011, and sued in 2012 for breach and for violation of the Nebraska Wage Payment and Collection Act. He alleged an $18,574.92 interest at termination and sought fair-market valuation at the post-61 date.
District court denied Greater Omaha’s dismissal motion, then granted Acklie summary judgment on liability (finding vesting unambiguous) but left damages for trial; it found ¶11 (company’s interpretation clause) ambiguous and for the jury to decide in conjunction with other provisions.
At trial the court instructed that vesting was a matter of law; Greater Omaha presented evidence it exercised its discretion to eliminate benefits for employees who left pre-vesting. The jury found for Greater Omaha; judgment entered and new-trial motion denied.
The Nebraska Supreme Court reviewed de novo and held the agreement unenforceable as an illusory promise because funding and payment were left to Greater Omaha’s sole discretion, so the contract lacked mutuality and could not support recovery.

Issues

Issue	Acklie's Argument	Greater Omaha's Argument	Held
Whether ¶11 (company’s interpretive/valuation clause) is ambiguous	¶11 is not ambiguous; court erred finding ambiguity	¶11 grants company binding, conclusive interpretive and valuation authority; extrinsic evidence admissible	¶11 is unambiguous in granting sole authority to company; no ambiguity exists
Whether the agreement created an enforceable contract	Agreement created a vested contractual right; vesting occurred at age 60 and was a legal right	Funding/payment were discretionary; company had sole authority to decide whether and how much to contribute/pay	Agreement is unenforceable: employer’s unlimited discretion made the promise illusory and lacking mutuality
Whether the duty of good faith saves the agreement	Implied covenant of good faith/fair dealing prevents finding an illusory promise	Exercise of express contractual discretion cannot be bad faith absent other facts	Good-faith covenant cannot rescue the contract because no legally enforceable obligation existed to begin with
Whether jury could hear evidence of company’s discretionary practices (damages/administration)	Trial court’s allowance conflicted with prior legal vesting ruling and improperly broadened jury role	Evidence admissible to show how company administered/valued accounts and what it paid other pre-vested employees	Jury evidence admission did not alter outcome; court’s ultimate resolution was that the contract is unenforceable as a matter of law

Key Cases Cited

Johnson Lakes Dev. v. Central Neb. Pub. Power, 254 Neb. 418, 576 N.W.2d 806 (Neb. 1998) (standard for contract interpretation and ambiguity)
City of Sidney v. Municipal Energy Agency of Neb., 301 Neb. 147, 917 N.W.2d 826 (Neb. 2018) (ambiguity is objective and contract construed as whole)
De Los Santos v. Great Western Sugar Co., 217 Neb. 282, 348 N.W.2d 842 (Neb. 1984) (employer’s control over quantity/performance can render agreement void for want of mutuality)
Davis v. General Foods Corp., 21 F. Supp. 445 (S.D.N.Y. 1937) (promise to pay compensation "solely in defendant’s discretion" is unenforceable as illusory)
Floss v. Ryan’s Family Steak Houses, Inc., 211 F.3d 306 (6th Cir. 2000) (analysis of illusory promise and employer discretion)