In the case of Gary and Teresa Hicks v. Thomas and Carolyn O’Meara, the Hickses sought statutory minimum and overtime wages for their work at Big Sky Motel, owned by the O’Mearas. The District Court initially granted summary judgment in favor of the O’Mearas, invoking the doctrine of res judicata, which barred the Hickses’ claim. However, the decision was reversed on appeal.
The Hickses were hired to manage the motel, performing various duties such as managing the front desk, taking reservations, doing laundry, maintaining and supervising housekeeping staff. Their 1-year contract specified their compensation based on monthly rates, with additional income from bus tour commissions. The Hickses were also provided living quarters and utilities by the O’Mearas. However, the O’Mearas terminated the Hickses’ employment just five months into the contract.
The Hickses initially filed a wrongful termination; however, their claim was denied. Subsequently, they filed a new action alleging failure to pay the minimum wage and overtime wages as required by the Fair Labor Standards Act (FLSA) and failure to pay the minimum wage as required by South Dakota law. They did not challenge their dismissal from employment.
The District Court’s summary judgment was based on the argument that res judicata applied, claiming that the causes of action were the same in both the wrongful termination suit and the wage claim. However, the appellate court disagreed. It determined that the underlying facts for each cause of action were different. While the wrongful termination claim focused on the wrongfulness of the dismissal, the minimum wage and overtime claim centered on the number of hours worked and the wages paid. Therefore, the two causes of action were considered distinct.
As a result, the appellate court reversed the grant of summary judgment, meaning the case was sent back to the District Court for further proceedings.
Key lessons from this case:
- Employment contracts should clearly define the terms and conditions of employment, including compensation, working hours, and duties.
- Res judicata, or claim preclusion, may bar a second lawsuit if it is brought on the same cause of action as a previous case.
- An employee bears the burden of proof when it comes to stating a claim of wrongful termination or unpaid wages.
If you want to know more about overtime regulations, read our guide on South Dakota Overtime Laws.
