He signed loan agreements for every advance - then claimed the deductions were illegal
An Oregon employer’s payday loan program just survived a legal challenge - and the appeals court said the worker got exactly what he asked for.
The Oregon Court of Appeals ruled in 2026 that Culbertsons LLC lawfully deducted $1,000 from a worker’s paychecks to recoup cash advances the company had made to him before payday.
The arrangement was straightforward. The worker asked his employer for money ahead of his regular pay periods - multiple times. Each advance came with a written “Official Employee Loan Agreement” that spelled out the debt and authorized future payroll deductions to pay it back. No interest. No fees. Eleven deductions later, the $1,000 was squared away.
None of it came out of his final paycheck.
The worker sued anyway. Oregon’s wage protection law - ORS 652.610(3) - only allows payroll deductions when they are voluntarily authorized in writing, recorded in the employer’s books, and made “for the employee’s benefit.” His argument: repaying a debt to the employer is not a benefit to the employee.
He pointed to a 1999 Oregon Supreme Court case, Taylor v. Werner Enterprises, where an employer had withheld wages as a bond to cover potential damage to its own equipment. The court in that case held the deductions were unlawful because the employee got nothing out of them.
But this was a different story.
Here, the worker had asked for the money. He was not entitled to it under...
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