Drought v. Marsh
937 N.W.2d 229
Neb.2020Background
- The Bar at the Yard, LLC (Longwells) employed Kevin Drought (general manager, salaried $80,000) and Kyle Fessler (head chef, salaried $49,999.99). Both were required to sign a written "Longwells Employee Agreement."
- The agreement included a PTO provision: PTO earned "per 40 hour + week billed," earnings based on billable hours, and billable hours required client-signed timesheets.
- Drought and Fessler were salaried, had no clients or billable hours, did not submit client-signed timesheets, and were paid the same weekly salary regardless of hours worked.
- After separation they sued under the Nebraska Wage Payment and Collection Act seeking unpaid PTO, claiming the agreement created an entitlement to PTO wages.
- Longwells argued no PTO accrued because the agreement’s conditions (billable hours and approved client timesheets) were not met; it also raised mutual mistake as an affirmative defense.
- The district court granted summary judgment for Longwells, concluding the employees failed to satisfy the agreement’s conditions to earn PTO; the employees appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PTO in the agreement is a "wage" payable on separation under the Wage Act | Drought/Fessler: PTO clause in the written agreement created an agreed wage payable at separation | Longwells: PTO was conditioned on billable hours/timesheets that were never met, so no wage arose | Court: PTO is a wage only if agreed and conditions met; conditions here were unmet, so no wage under §48-1229 |
| Whether plaintiffs satisfied the agreement’s conditions to earn PTO | Drought/Fessler: They worked "at least 40 hours/week" and had been paid vacation previously, showing entitlement | Longwells: Agreement requires 40+ billed hours and client-signed timesheets; worked hours ≠ billed hours and no timesheets existed | Court: Plaintiffs had no billable hours or approved client timesheets; therefore they did not earn PTO under the agreement |
| Whether the agreement’s inapplicable terms or mutual mistake justify relief | Drought/Fessler: Agreement terms came from an IT template and were inapplicable; mutual mistake/reformation should apply | Longwells: Even if some terms were inapplicable, plaintiffs still must satisfy the written conditions to earn PTO | Court: No need to reach mutual mistake; failure to meet written conditions is dispositive |
| Whether summary judgment for Longwells was proper | Drought/Fessler: District court erred in granting Longwells’ motion and denying theirs | Longwells: No genuine issue of material fact; law entitles employer to judgment | Court: Affirmed summary judgment for Longwells |
Key Cases Cited
- Fisher v. PayFlex Systems USA, 285 Neb. 808, 829 N.W.2d 703 (2013) (PTO that can be used as vacation treated like earned but unused vacation and is payable on separation)
- Williamson v. Bellevue Med. Ctr., 934 N.W.2d 186 (2019) (applies Fisher’s treatment of PTO as wages under the Wage Act)
- Professional Firefighters Assn. v. City of Omaha, 290 Neb. 300, 860 N.W.2d 137 (2015) (statutory interpretation principles referenced)
- Heckman v. Marchio, 296 Neb. 458, 894 N.W.2d 296 (2017) (presumption of legislative acquiescence where court construction of a statute has not been amended)