Fisher v. Payflex Sys. USA, Inc.

285 Neb. 808

829 N.W.2d 703

Duane E. FISHER, appellee,

v.PAYFLEX SYSTEMS USA, INC., appellant.

Jason R. Norton, appellee,

v.PayFlex Systems USA, Inc., appellant.

Nos. S–12–503, S–12–504.

Supreme Court of Nebraska.

May 3, 2013.

Syllabus by the Court

[285 Neb. 808]1. Courts: Appeal and Error. An appellate court reviews a county court's judgment for errors appearing on the record.

2. Judgments: Appeal and Error. When reviewing a judgment for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable.

3. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment is granted and gives that party the benefit of all reasonable inferences deducible from the evidence.

4. Judgments: Appeal and Error. An appellate court independently reviews questions of law decided by a lower court.

5. Statutes. Statutory interpretation presents a question of law.

6. Statutes: Appeal and Error. Absent a statutory indication to the contrary, an appellate court gives words in a statute their ordinary meaning.

7. Statutes: Legislature: Intent: Appeal and Error. An appellate court will not look beyond a statute to determine the legislative intent when the words are plain, direct, or unambiguous.

8. Employer and Employee: Words and Phrases. A “vacation” from work is ordinarily understood to mean a paid leave of absence granted to an employee for rest and relaxation.

9. Employer and Employee: Wages. Paid vacation leave is not conditioned upon anything other than the employee's rendering services for the employer. And an employee may use his or her earned vacation leave for any personal reason without conditions, including for an illness or disability.

10. Wages: Words and Phrases. Paid sick leave is ordinarily understood to mean an employee's paid absence from work for illness or disability.

11. Employer and Employee: Wages. Under Neb.Rev.Stat. § 48–1229 (Reissue 2010), upon an employee's separation of employment, an employer may withhold payment for unused sick leave, but not unused vacation leave.

12. Employer and Employee: Employment Contracts: Wages: Appeal and Error. Under Neb.Rev.Stat. § 48–1229 (Reissue 2010), an appellate court will consider a payment a wage subject to the Wage Payment and Collection Act if (1) it is compensation for labor or services, (2) it was previously agreed to, and (3) all the conditions stipulated have been met.

13. Statutes: Legislature: Intent. In discerning the meaning of a statute, a court must determine and give effect to the purpose and intent of the Legislature as ascertained from the entire language of the statute considered in its plain, ordinary, and popular sense, as it is the court's duty to discover, if possible, the Legislature's intent from the language of the statute itself.

14. Statutes: Intent. In construing a statute, a court looks to the statutory objective to be accomplished, the evils and mischiefs sought to be remedied, and the purpose to be served. A court must then reasonably or liberally construe the statute to achieve the statute's purpose, rather than construing it in a manner that defeats the statutory purpose.

15. Statutes: Appeal and Error. An appellate court does not consider a statute's clauses and phrases as detached and isolated expressions. Instead, the whole and every part of the statute must be considered in fixing the meaning of any of its parts.

16. Statutes: Appeal and Error. An appellate court attempts to give effect to all parts of a statute and to avoid rejecting a word, clause, or sentence as superfluous or meaningless.

17. Statutes: Legislature: Intent. The fundamental objective of statutory interpretation is to ascertain and carry out the Legislature's intent.

18. Statutes: Legislature: Intent: Appeal and Error. An appellate court will reject a statutory interpretation that is contrary to a clear legislative intent.

19. Statutes: Legislature: Intent: Appeal and Error. An appellate court can examine an act's legislative history if a statute is ambiguous or requires interpretation.

20. Statutes. A statute is ambiguous if it is susceptible of more than one reasonable interpretation, meaning that a court could reasonably interpret the statute either way.

21. Employer and Employee: Wages. Under Neb.Rev.Stat. § 48–1229 (Reissue 2010), an employee's earned “paid time off” hours that the employee has an absolute right to take for any purpose must be treated as earned vacation leave.

22. Attorney Fees: Appeal and Error. An appellate court reviews a court's award of attorney fees under Neb.Rev.Stat. § 48–1231 (Reissue 2010) for abuse of discretion.

23. Judges: Words and Phrases. A judicial abuse of discretion exists when the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition.

24. Attorney Fees. To determine proper and reasonable attorney fees, a court must consider several factors: the nature of the litigation, the time and labor required, the novelty and difficulty of the questions raised, the skill required to properly conduct the case, the responsibility assumed, the care and diligence exhibited, the result of the suit, the character and standing of the attorney, and the customary charges of the bar for similar services.

A. Stevenson Bogue and Ruth A. Horvatich, of McGrath, North, Mullin & Kratz, P.C., L.L.O., Omaha, for appellant.

Richard A. Drews, Omaha, of Taylor, Peters & Drews, for appellees.

HEAVICAN, C.J., WRIGHT, CONNOLLY, STEPHAN, McCORMACK, and CASSEL, JJ.

CONNOLLY, J.

SUMMARY

PayFlex Systems USA, Inc. (PayFlex), appeals from the district court's judgments in these consolidated appeals from the county court. The district court affirmed the county court's summary judgment that required PayFlex to pay earned but unused “paid time off” (PTO) hours to the appellees, Duane E. Fisher and Jason R. Norton. The issue is whether Neb.Rev.Stat. § 48–1229 (Reissue 2010) of the Wage Payment and Collection Act (Wage Payment Act) ¹ entitles an employee, upon separation of employment, to collect earned but unused PTO hours despite a provision in an employee manual that the employer will not pay them.

We affirm. Regardless of the label that PayFlex attached to its PTO hours, they were indistinguishable from earned vacation time under § 48–1229. Like earned vacation time, the appellees had an unconditional right to use their earned PTO hours for any purpose. Because the Wage Payment Act requires an employer to pay earned but unused vacation leave to an employee upon separation of employment, the district court correctly affirmed the county court's summary judgment that ordered PayFlex to pay the appellees their unused PTO benefits.

BACKGROUND

Fisher and Norton both separated from their employment with PayFlex in July 2010. Fisher's hourly wage was $43.7019, and his PTO balance was 146.64 hours. Norton's hourly wage $32.1678, and his PTO balance was 120.14 hours. PayFlex had not agreed to pay the appellees their unused PTO hours and denied the appellees' demand for payment of these hours. PayFlex's employee manual set out its PTO rules and provided that PayFlex would not pay their employees for unused PTO hours:

PayFlex has provided Paid Time Off (PTO) as one of the many ways in which to show appreciation for loyalty and continued service. PTO is available for regular, full-time employees and may be used for absences due to illness, vacation or personal concerns.

PTO will accrue in each pay period of continuous employment; however, employees are not eligible to use any accrued PTO until the completion of 90 days of full time employment.

....

PTO may not be taken before it is earned.

Employees are encouraged to take their [PTO] as an opportunity for rest, relaxation and other personal time. In the event that an employee does not utilize all of the PTO during the anniversary year, carryover is allowed into the next anniversary year with a maximum of twenty-five (25) days (200 hours).

All PTO leave must be approved by the department manager or supervisor. PTO requests for one (1) week or more shall be scheduled with approval of the department manager or supervisor at least fifteen (15) days before the time taken.

PTO will NOT be paid out upon separation of employment. If any unused, accumulated PTO is taken prior to the separation date, an employee must work three (3) consecutive regularly, scheduled days immediately following the PTO days, in order to be paid for those PTO days used.

(Emphasis in original.)

A chart in the employee manual sets out the number of PTO hours that employees would earn per pay period and per year, depending upon their years of employment. For example, a 1–year employee would earn 120 PTO hours (15 days) per year, while employees who had worked for PayFlex 9 or more years would earn 200 PTO hours (25 days) per year.

The payroll manager stated that in her 11 years of employment, PayFlex had never provided separate vacation leave and sick leave benefits. The vice president of human resources testified that employees, if they wished, could use all of their accrued PTO hours for vacation time. As employees used their PTO hours, PayFlex listed their paid-out hours as part of the employee's total earnings on their paycheck. PayFlex also provided up to 3 days of funeral leave for employees, which it did not deduct from their PTO hours.

After the county court consolidated these cases, both sides moved for summary judgment. The issue was whether a 2007 amendment to § 48–1229 permitted PayFlex to refuse to pay unused PTO benefits to separating employees even though the statute required it to pay unused vacation leave. PayFlex argued that PTO hours were a hybrid benefit that did not constitute...