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Gilkerson v. Nebraska Colocation Centers, L.L.C.

United States District Court, D. Nebraska

May 31, 2016

TIMOTHY A. GILKERSON, Plaintiff,
v.
NEBRASKA COLOCATION CENTERS, L.L.C., Defendant.

          MEMORANDUM AND ORDER

          John M. Gerrard United States District Judge

         The plaintiff, Timothy Gilkerson, is suing his former employer, Nebraska Colocation Centers, L.L.C. (NCC), for allegedly breaching Gilkerson's employment contract. NCC contends the contract was validly rescinded by the parties, but Gilkerson claims the rescission is void due to duress. This matter is before the Court on the defendant's motion for summary judgment (filing 48). The defendant's motion will reluctantly be granted.

         BACKGROUND

         Gilkerson was hired in 2011 to be NCC's Vice President and General Manager. Filing 49 at 1.[1] Gilkerson and NCC agreed to a 10-year employment contract, paying Gilkerson an annual base salary of $84, 000, quarterly sales bonuses, and a retirement bonus upon the expiration of Gilkerson’s employment period. Filing 51-2 at 1; filing 55 at 9. Gilkerson was responsible for developing NCC's information technology infrastructure. Filing 49 at 1-2. The parties disagree about the extent to which Gilkerson was expected to help with NCC's sales, and his commissions under the employment contract were based on the company's sales, not his. Filing 49 at 2; filing 55 at 2.

         The employment contract provided that if NCC terminated Gilkerson's employment without cause before the 10-year term expired, Gilkerson would receive his remaining salary for the balance of the term in a lump sum, another 5 years' bonuses, and his full retirement bonus. Filing 51-2 at 5-6. But if Gilkerson were to be terminated with cause, he would receive only his unpaid compensation for services already performed. Filing 51-2 at 6. As relevant, "cause" for termination could include Gilkerson's "willful misconduct" in carrying out his duties; or "persistent failure to perform the duties and responsibilities of his employment hereunder; which failure is not remedied by him within 30 days after [his] receipt of written notice from [NCC] of such failure." Filing 51-2 at 4.

         NCC was evidently unhappy about Gilkerson's performance helping with sales, and NCC's president, Jerry Appel, talked with Gilkerson about how he wanted Gilkerson to "[c]lose more deals." Filing 51-1 at 11. Gilkerson's performance review was generally average to positive, except for "[u]nsatisfactory" ratings in "[a]chieves sales goals" and "[f]ulfills the terms of his contract." Filing 57-4 at 2. The review indicated that Gilkerson's "lack of sales is irrefutable and of great concern[, ]" and detailed Gilkerson's alleged failings in sales. Filing 57-4 at 3. Gilkerson signed the review on February 5, 2013, acknowledging its receipt. Filing 57-4 at 4. Gilkerson's comments on the review express his disagreement regarding sales goals, generally explaining that his experience was not in sales and that "except in the startup phase when everyone needed to pitch in and wear many hats[, ]" he had understood that sales would be the responsibility of a dedicated sales team. Filing 57-4 at 4-5.

         Appel announced the hiring of a new "Vice President - Sales and Marketing" on July 8, 2013. Filing 57-5 at 1. On the same day, Appel told Gilkerson that Gilkerson's office was to be given to the new hire, and that Gilkerson's job title had been changed to "Director: Field Engineering and Channel Services." Filing 57-5 at 3. Gilkerson was also informed that Appel was "developing a new compensation program for [his] new position. It [would] retain [his] salary at the current level, provide incentives for channel and carrier sales, and bonuses for field engineering and product development." Filing 57-5 at 3. Then, on July 15, 2013, Appel met with Gilkerson and presented Gilkerson with a document captioned "Mutual Rescission, " which would rescind Gilkerson's employment contract. Filing 49 at 4; see filing 51-5. Gilkerson was also presented with a "term sheet" setting forth proposed terms of Gilkerson's continued employment. See filing 51-6.

         Although Gilkerson contends he was given different term sheets at different times, it is clear that the term sheet he ultimately signed provided Gilkerson with the same base salary as the employment contract, a higher commission rate, and an additional bonus contingent upon certain goals. Filing 51-6; filing 57-3 at 4; see filing 57-8. But it limited calculation of commission to Gilkerson's "customers" as defined by the term sheet, and did not include the retirement bonus. Filing 51-6. And the term sheet did not prohibit Gilkerson's termination. Filing 51-6.

         Gilkerson did not immediately agree to the rescission and term sheet. See filing 49 at 5. He met with Appel again on July 17, 2013. Filing 49 at 5. Both meetings were recorded. See filing 57-6.[2] During the meetings, Appel was sharply critical of Gilkerson's performance. E.g. filing 57-6 at 3-6, 10, 23, 30. Appel clearly presented Gilkerson with a choice between agreeing to the rescission and term sheet, or being fired for cause. E.g. filing 57-6 at 4. For instance, when Gilkerson asked Appel whether his employment contract "means nothing, " Appel replied,

No. In their opinion you didn't live up to what your obligations were in this contract, which is to be - make this thing successful, make this thing work. . . . I'm going to tell you, you go ahead and go - If you're going to go to your lawyer, go to your lawyer, but you'll go to your lawyer without a job.

         Filing 57-6 at 4. Appel warned Gilkerson that money was available for litigation, and that NCC could "outlast" Gilkerson. Filing 57-6 at 26. But Appel tried to persuade Gilkerson to accept the rescission and term sheet and continue working for NCC, asserting that he still believed Gilkerson could be successful and earn as much as he would have earned under the employment contract. E.g. filing 57-6 at 12. Appel also pointed out that it "would be tough" for Gilkerson to be unemployed, in part because Gilkerson had health problems and couldn't afford to lose his insurance. Filing 57-6 at 43. Appel told Gilkerson, "If I were in your shoes and if I'm thinking clearly, I'm saying, Wait a second. What's my alternative? 30 days from now I'm without a job. That's my alternative. Do I want that?" Filing 57-6 at 46-47. Appel agreed that he was "basically saying" that if Gilkerson did not sign the rescission, Gilkerson would be fired. Filing 57-6 at 29.

         Gilkerson was able to briefly consult with counsel after the first meeting with Appel. Filing 51-1 at 5; see filing 57-6 at 31. But Gilkerson ultimately signed the rescission and term sheet on July 18, 2013. Filing 49 at 6. NCC fired Gilkerson on January 8, 2014. Filing 49 at 6. Gilkerson sued NCC in state court, alleging breach of contract and violation of the Nebraska Wage Payment and Collection Act, Neb. Rev. Stat. § 48-1228 et seq.[3] Filing 1-1 at 26-30. After some procedural confusion that is no longer relevant, NCC eventually removed the case to this Court. Filing 1. Now before the Court is NCC's motion for summary judgment (filing 48).

         STANDARD OF REVIEW

         Summary judgment is proper if the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law. SeeFed. R. Civ. P. 56(a). The movant bears the initial responsibility of informing the Court of the basis for the motion, and must identify those portions of the record which the movant believes demonstrate the absence of a genuine issue of material fact. Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). If the movant does so, the ...


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