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Gessele v. Jack in the Box, Inc.

United States District Court, D. Oregon

November 13, 2019

JESSICA GESSELE, ASHLEY ORTIZ, NICOLE GESSELE, TRICIA TETRAULT, and CHRISTINA MAULDIN, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
JACK IN THE BOX, INC., a corporation of Delaware, Defendant.

          JON M. EGAN Attorney for Plaintiffs

          DOUGLAS S. PARKER JENNIFER NETH WARBERG DON STAIT Attorneys for Defendant

          OPINION AND ORDER

          ANNA J. BROWN UNITED STATES SENIOR DISTRICT JUDGE.

         DEFENDANT'S MOTION (#161) FOR SUMMARY JUDGMENT NO. 1 -

         ARBITRATION OF CLAIM ..................... 23

         I. Arbitration Agreement.. .............. 24

         II. Terms of the Agreement ............... 26

         III. Waiver ....................... 27

         DEFENDANT'S MOTION (#162) FOR SUMMARY JUDGMENT NO. 2 - WBF

         DEDUCTION CLAIMS BARRED BY TAX LAWS.. ............ 34

         I. The WBF.. ..................... 36

         II. The WBF assessments are not a tax pursuant to Oregon Revised Statutes § 316.197 ............. 37

         A. Oregon Rules of Statutory Construction.. . . . 38

         B. The WBF as Assessment or Tax.. ........ 39

         C. Applicability of § 316.197.. ......... 43

         III. Plaintiffs' WBF claims are not barred by federal tax law.. ....................... 46

         PLAINTIFF'S MOTION (#172) FOR PARTIAL SUMMARY JUDGMENT ON THE ISSUE OF PRIMA FACIE LIABILITY ON THEIR WORKERS' BENEFIT FUND CLAIMS ............................ 50

         I. Defendant improperly over-withheld Plaintiffs' WBF contributions.. .................. 51

         II. Penalty Wages under Oregon Revised Statutes § 652.150.. .................... 52

         A. The Law .................... 53

         B. Analysis.. .................. 55

         IV. Defendant's Due-Process Rights ........... 56

         V. Summary.. ..................... 59

         PLAINTIFFS' MOTIONS (#173, #179, #180, #181) RELATED TO THEIR

         SHOE CLAIMS.. ........................ 60

         I. Deductions from Employees' Wages Permitted under Oregon Law ..................... 63

         II. Uniforms ...................... 64

         A. Facts ..................... 64

         B. Non-Slip Shoes as Part of Employees' Uniforms. 68

         III. Exceptions Permitting Deductions .......... 70

         A. Exception under Oregon Revised Statutes § 653.035(1).. ................ 71

         B. Exceptions under Oregon Revised Statutes § 652.610(3)(b) ................ 72

         C. Oregon Revised Statutes § 652.610(3)(c). . . . 87

         IV. Summary of Rulings on Shoe-Deduction Motions. . . . 92

         DEFENDANT'S MOTION (#163) FOR SUMMARY JUDGMENT NO. 3 - REMEDIES RELATED TO ALLEGED WRONGFUL DEDUCTIONS ARE LIMITED ...... 94

         I. Background ..................... 95

         II. Penalties Pursuant to Oregon Revised Statutes §§ 652.615 and 652.150 ............... 96

         III. Plaintiffs may recover penalties under §§ 652.615 and 652.150 for improper WBF or shoe deductions that reduced their pay below minimum wage or resulted in them receiving insufficient overtime ........ 98

         IV. Plaintiffs are limited to a single $200 sum or actual damages for improper WBF deductions and/or a single $200 sum or actual damages for improper shoe deductions ..................... 102

         V. Willfulness of Defendant's Alleged Violations.. . . 104

         VI. Limitations Period ................. 104

         VII. Due-Process Concerns ................ 106

         VIII. Summary.. ..................... 106

         DEFENDANT'S MOTION (#164) FOR SUMMARY JUDGMENT NO. 4 - BREACH OF FIDUCIARY DUTY TORT CLAIMS IS TIME-BARRED.. ......... 107

         I. Background ..................... 108

         II. Parties' Arguments ................. 115

         III. The Law.. ..................... 116

         IV. Analysis ...................... 118

         DEFENDANT'S MOTION (#165) FOR SUMMARY JUDGMENT NO. 5 - QUASI-CONTRACT/UNJUST ENRICHMENT CLAIM FAILS AS A MATTER OF LAW.. . 123

         I. The Law.. ..................... 124

         II. Analysis ...................... 125

         PLAINTIFFS' MOTION (#174) FOR PARTIAL SUMMARY JUDGMENT ON THE ISSUE OF PRIMA FACIE LIABILITY ON THEIR FRANCHISE TRANSFER CLAIMS AND PLAINTIFFS' MOTION (#178) FOR PARTIAL SUMMARY JUDGMENT ON THE ISSUE OF DAMAGES UNDER O.R.S. 652.140.. . . . 128

         I. Willfulness.. ................... 130

         A. The Law .................... 131

         B. Analysis.. .................. 133

         II. Calculation of Penalty Wages ............ 135

         PLAINTIFFS' MOTION (#175) FOR PARTIAL SUMMARY JUDGMENT ON THE ISSUE OF DAMAGES UNDER O.R.S. 652.615.. ........... 138

         PLAINTIFFS' MOTION (#176) FOR PARTIAL SUMMARY JUDGMENT ON THE ISSUE OF DAMAGES UNDER O.R.S. 653.025 and PLAINTIFFS' MOTION (#177) FOR PARTIAL SUMMARY JUDGMENT ON THE ISSUE OF DAMAGES UNDER O.R.S. 653.261 ..................... 139

         CONCLUSION .......................... 141

         This matter comes before the Court on the following Motions by Defendant Jack in the Box, Inc.:

1. Motion (#161) for Summary Judgment No. 1 - Arbitration of Claim
2. Motion (#162) for Summary Judgment No. 2 - WBF Deduction Claims Barred by Tax Laws
3. Motion (#163) for Summary Judgment No. 3 - Remedies Related to Alleged Wrongful Deductions Are Limited
4. Motion (#164) for Summary Judgment No. 4 - Breach of Fiduciary Duty Tort Claims is Time-Barred
5. Motion (#165) for Summary Judgment No. 5 - Quasi-Contract/Unjust Enrichment Claim Fails as a Matter of Law

         and on the following Motions by Plaintiffs Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin:

1. Motion (#172) for Partial Summary Judgment on the Issue of Prima Facie Liability on Their Workers' Benefit Fund Claims
2. Motion (#173) for Partial Summary Judgment on the Issue of Prima Facie Liability on Their Shoe Claims
3. Motion (#174) for Partial Summary Judgment on the Issue of Prima Facie Liability on Their Franchise Transfer Claims
4. Motion (#175) for Partial Summary Judgment on the Issue of Damages under O.R.S. 652.615
5. Motion (#176) for Partial Summary Judgment on the Issue of Damages under O.R.S. 653.025
6. Motion (#177) for Partial Summary Judgment on the Issue of Damages under O.R.S. 653.261
7. Motion (#178) for Partial Summary Judgment on the Issue of Damages under O.R.S. 652.140
8. Motion (#179) for Partial Summary Judgment on Jack in the Box's Third Affirmative Defense (Authorized Deductions)
9. Motion (#180) for Partial Summary Judgment on Jack in the Box's Fourth Affirmative Defense (Benefit to Employees)
10. Motion (#181) for Partial Summary Judgment on Jack in the Box's Fifth Affirmative Defense (Valid Deduction).

         The Court concludes the record for each of these Motions is sufficiently developed, and, particularly in light of the many interrelated issues raised in these several motions, oral argument would not be helpful to resolve them. See United States v. Delgado, 640 Fed.Appx. 620, 621 (9th Cir. 2016)(“Whether [a] . . . hearing is appropriate rests in the reasoned discretion of the district court.”)(quotation omitted)); L.R. 7-1(d)(“The Court will determine whether oral argument would help it resolve the matter.”).

         For the following reasons the Court:

1. DENIES Defendant's Motion (#161) for Summary Judgment No. 1 - Arbitration of Claim;
2. DENIES Defendant's Motion (#162) for Summary Judgment No. 2 - WBF Deduction Claims Barred by Tax Laws;
3. GRANTS in part and DENIES in part Defendant's Motion (#163) for Summary Judgment No. 3 - Remedies Related to Alleged Wrongful Deductions Are Limited;
4. GRANTS Defendant's Motion (#164) for Summary Judgment No. 4 - Breach of Fiduciary Duty Tort Claims is Time-Barred;
5. DENIES Defendant's Motion (#165) for Summary Judgment No. 5 - Quasi- Contract/Unjust Enrichment Claim Fails as a Matter of Law;
6. GRANTS Plaintiffs' Motion (#172) for Partial Summary Judgment on the Issue of Prima Facie Liability on Their Workers' Benefit Fund Claims
7. DENIES Plaintiffs' Motion (#173) for Partial Summary Judgment on the Issue of Prima Facie Liability on Their Shoe Claims
8. GRANTS Plaintiffs' Motion (#174) for Partial Summary Judgment on the Issue of Prima Facie Liability on Their Franchise Transfer Claims
9. DENIES Plaintiffs' Motion (#175) for Partial Summary Judgment on the Issue of Damages under O.R.S. 652.615
10. DENIES Plaintiffs' Motion (#176) for Partial Summary Judgment on the Issue of Damages under O.R.S. 653.025
11. DENIES Plaintiffs' Motion (#177) for Partial Summary Judgment on the Issue of Damages under O.R.S. 653.261
12. GRANTS in part and DENIES in part Plaintiffs' Motion (#178) for Partial Summary Judgment on the Issue of Damages under O.R.S. 652.140
13. GRANTS in part and DENIES in part Plaintiffs' Motion (#179) for Partial Summary Judgment on Jack in the Box's Third Affirmative Defense (Authorized Deductions)
14. GRANTS in part and DENIES in part Plaintiffs' Motion (#180) for Partial Summary Judgment on Jack in the Box's Fourth Affirmative Defense (Benefit to Employees)
15. GRANTS in part and DENIES in part Plaintiffs' Motion (#181) for Partial Summary Judgment on Jack in the Box's Fifth Affirmative Defense (Valid Deduction).

         BACKGROUND

         Until September 30, 2011, Defendant Jack in the Box, Inc., owned and operated several restaurants in Oregon. From May 2006 through September 2011 Defendant sold its Oregon restaurants to various franchise operators as follows:

May 1, 2006: 6 restaurants
March 29, 2010: 21 restaurants
March 7, 2011: 13 restaurants
September 30, 2011: 3 restaurants

         After September 30, 2011, Defendant did not own or operate any restaurants in Oregon and did not have any Oregon employees. The last Jack in the Box restaurant in Oregon owned by Defendant at which any of the named Plaintiffs worked was sold to Northwest Group, Inc. (NWG) on March 29, 2010.

         Plaintiffs were employed by Defendant in its Oregon restaurants at various times. Plaintiffs received their final paychecks from Defendant on the following dates:

Tricia Tetrault: July 11, 2008
Ashley Ortiz: December 26, 2008
Nicole Gessele: March 20, 2009
Jessica Gessele: November 23, 2009
Christina Mauldin: March 30, 2010.

         On August 13, 2010, Jessica Gessele, Ashley Ortiz, Nicole Gessele, and Tricia Tetrault, on behalf of all those similarly situated, filed a putative class-action Complaint in this Court against Defendant Jack in the Box (Gessele I, Case No. 3:10-CV-00960-ST)[1] for violation of the minimum-wage and overtime provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq., and various Oregon wage-and-hour laws. Gessele I was assigned to Magistrate Judge Janice M. Stewart.

         On May 16, 2011, Jessica Gessele, Ashley Ortiz, Nicole Gessele, and Tricia Tetrault filed a First Amended Complaint in Gessele I in which they added Christina Mauldin as a named Plaintiff.

         On March 20, 2012, Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin filed a Second Amended Complaint in Gessele I in which they alleged Defendant (1) failed to pay minimum wages in violation of the FLSA, (2) failed to pay overtime wages in violation of the FLSA, (3) failed to pay minimum wages in violation of Oregon Revised Statutes § 653.025, (4) failed to pay overtime wages in violation of Oregon Revised Statutes § 653.261, (5) failed to pay all wages due following termination of Plaintiffs' employment in violation of Oregon Revised Statutes § 652.140, (6) deducted unauthorized amounts from Plaintiffs' paychecks in violation of Oregon Revised Statutes § 652.610, and (7) failed to pay all wages when due as required by Oregon Revised Statutes § 652.120.

         On August 13, 2012, Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin filed a Motion to Certify Oregon Rule 23(b)(3) Classes and Alternative Motions to Either Certify Hybrid FLSA Classes or Certify FLSA 216(b) Collectives in Gessele I.

         On December 13, 2012, Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin filed a Motion for Leave to File Third Amended Complaint in Gessele I. On January 7, 2013, Magistrate Judge Janice M. Stewart denied the Motion on the grounds of undue delay and prejudice.

         On January 28, 2013, Magistrate Judge Stewart issued Findings and Recommendation in which she recommended granting in part and denying in part Plaintiffs' Motion to Certify. Specifically, Magistrate Judge Stewart recommended conditional certification of the proposed FLSA Workers Benefit Fund and Shoe Collectives and Subcollectives under § 216(b) and certification of the proposed Rule 23(b)(3) Oregon Workers Benefit Fund and Shoe Classes and Subclasses. Magistrate Judge Stewart also recommended denying certification of the proposed FLSA Break Collective and the Rule 23(b)(3) Break Classes and Subclasses.

         On April 1, 2013, District Judge Ancer L. Haggerty entered an Order adopting the January 28, 2013, Findings and Recommendation; conditionally certifying Plaintiffs' proposed FLSA Workers' Benefit Fund and Shoe Collectives and Subcollectives under § 216(b); certifying Plaintiffs' proposed Rule 23(b)(3) Oregon Workers Benefit Fund and Shoe Classes and Subclasses; and denying certification of the FLSA Break Collective and the Rule 23(b)(3) Break Classes and Subclasses.

         From May 31, 2011, to June 18, 2013, Defendant filed four Answers in Gessele I in which it asserted between eight and twelve affirmative defenses. Defendant, however, did not assert arbitration as a defense in any of its Answers in Gessele I.

         On May 7, 2013, Defendant filed a Motion for Summary Judgment in Gessele I as to all of the claims of Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin on the grounds that their FLSA claims were barred by the statute of limitations and that the court may not exercise supplemental jurisdiction over Plaintiffs' state-law claims.

         On June 26, 2013, Gessele I was reassigned to this Court.

         On November 5, 2013, Jason Diaz filed a Consent to Join Law Suit in Gessele I. Diaz, however, did not become a named Plaintiff in Gessele I.

         On March 19, 2014, this Court issued an Opinion and Order in Gessele I in which it granted Defendant's Motion for Summary Judgment on the ground that Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin were required to file written consents with the Court to commence their FLSA collective action, but they failed to file those written consent forms timely. The Court, therefore, concluded it never acquired jurisdiction over the FLSA claims of Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin, and, as a result, the Court could not exercise supplemental jurisdiction over their state-law claims. The Court also concluded Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin did not file written consents within the applicable limitations period; neither equitable tolling nor equitable estoppel applied; and, therefore, their FLSA claims were barred by the applicable statute of limitations. Accordingly, the Court dismissed the FLSA claims of Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin with prejudice and dismissed their state-law claims without prejudice.

         On April 16, 2014, Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin filed in Gessele I an unopposed Motion to Amend/Correct in which they moved the Court to amend its March 19, 2014, Opinion and Order to dismiss their FLSA claims without prejudice on the ground that the Court lacked jurisdiction over those claims.

         On May 15, 2014, the Court granted the Motion to Amend/Correct in Gessele I and issued an Amended Opinion and Order in which it granted Defendant's Motion for Summary Judgment on the ground that Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin failed to file written consent forms within the time required by the FLSA. The Court, therefore, never acquired jurisdiction over the FLSA claims of Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin, and, as a result, the Court could not exercise supplemental jurisdiction over their state-law claims. Accordingly, on May 15, 2014, the Court entered a Judgment dismissing Gessele I without prejudice.

         On June 10, 2014, Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, Christina Mauldin, and Jason Diaz filed a putative class action against Jack in the Box in Multnomah County Circuit Court (Gessele II) in which they alleged claims for violation of Oregon's wage-and-hour laws, violation of the FLSA, breach of fiduciary duty, and equitable and quasi-contractual claims for return of money.

         On July 9, 2014, Defendant removed Gessele II to this Court on the ground of federal-question jurisdiction based on Plaintiffs' FLSA claims and/or jurisdiction under the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d)(2).

         On July 16, 2014, Defendant filed an Answer to Plaintiffs' Complaint in which it asserted sixteen Affirmative Defenses including one for arbitration in which Defendant stated “[c]ertain named Plaintiffs and putative collective and class action members' claims are barred from litigation in this Court pursuant to arbitration agreements with Defendant.” Def.'s Answer at ¶ 90.

         On August 8, 2014, Plaintiffs filed a Motion to Remand Case to State Court on the grounds that (1) issue preclusion/ collateral estoppel barred litigation of Gessele II in this Court; (2) the “law of the case” barred litigation in this Court if issue preclusion did not bar litigation; and (3) judicial estoppel barred litigation of Gessele II in this Court if neither issue preclusion nor law of the case barred such litigation.

         On October 17, 2014, the Court entered an Opinion and Order in Gessele II in which it granted in part and denied in part Plaintiffs' Motion to Remand. The Court concluded (1) although issue preclusion barred relitigation as to whether the Court had jurisdiction to hear the FLSA claims of Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin, it did not bar litigation of Diaz's FLSA claims against Defendant brought for the first time in Gessele II; (2) the law of the case did not bar relitigation as to whether this Court had jurisdiction; (3) the Court's decision regarding its lack of jurisdiction over Gessele I did not apply to Diaz because he was never a named plaintiff in Gessele I, and, therefore, judicial estoppel did not apply nor require remand of Diaz's FLSA claims; (4) judicial estoppel applied to and estopped Defendant from relitigating the issue of this Court's lack of jurisdiction over the FLSA claims of Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin; and (5) Defendant did not waive its right to remove Gessele II by seeking dismissal of Gessele I on jurisdictional grounds.

         On October 29, 2014, Defendant moved for a stay of Gessele II pending the outcome of Defendant's intended appeal of the Court's October 17, 2014, Opinion and Order to the Ninth Circuit.

         On November 6, 2014, the Court granted Defendant's Motion for Stay.

         On June 11, 2015, the Ninth Circuit issued a Mandate in which it reversed in part the Court's October 17, 2014, Opinion and Order and remanded the matter to this Court for further proceedings. Specifically, the Ninth Circuit held (1) the doctrine of issue preclusion precluded Defendant from relitigating “the jurisdictional issues” in Gessele I; (2) Defendant “[was] not precluded from invoking federal jurisdiction” in Gessele II because Gessele I did not address jurisdiction under CAFA nor the timeliness of the new FLSA claims asserted in Gessele II; (3) Defendant's position in Gessele I that the Court lacked jurisdiction over the FLSA claims asserted in that matter “is not inconsistent with [Defendant's] . . . [assertion in Gessele II that] there is no time bar to the newly asserted FLSA claims, or that the district court has CAFA jurisdiction over the state-law claims”; and (4) Defendant did not waive its right to remove Gessele II “through its filings in the state court or its prior conduct in this litigation.”

         On August 31, 2015, Defendant filed a Motion for Partial Summary Judgment in Gessele II in which it asserted Diaz's claims were subject to an arbitration agreement. On the same day Plaintiffs filed a Motion for Partial Summary Judgment (Statute of Limitations) and to Establish Tolling for FLSA Collective Members and a Motion for Partial Summary Judgment on Jack in the Box's 8th (Private Right Of Action), 9th (Due Process) and 12th(Preemption) Affirmative Defenses.

         On December 22, 2015, the Court issued an Order in which it denied as premature (1) those portions of Defendant's Motion for Partial Summary Judgment and Plaintiffs' Motion for Partial Summary Judgment (Statute of Limitations) as to whether the California putative class members are subject to binding settlements in two California state cases; (2) those portions of Defendant's Motion for Partial Summary Judgment and Plaintiffs' Motion for Partial Summary Judgment (Statute of Limitations) relating to Defendant's status as a joint employer; and (3) Plaintiffs' Motion for Partial Summary Judgment on Jack in the Box's 8th (Private Right Of Action), 9th (Due Process) and 12th(Preemption) Affirmative Defenses as to Defendant's Ninth Affirmative Defense. The Court granted the parties leave to re-address those issues after limited discovery and after the Court issued its Opinion and Order on the remaining portions of the pending Motions.

         On February 16, 2016, the Court heard oral argument on those issues in the pending Motions for Partial Summary Judgment that it did not address in its December 22, 2015, Opinion and Order. At oral argument the parties agreed the issue as to whether Diaz's claims were subject to mandatory arbitration required more extensive briefing by both parties, and Defendant, therefore, withdrew that portion of its Motion for Partial Summary Judgment.

         On March 10, 2016, the Court issued an Opinion and Order in which it granted Defendant's Motion for Partial Summary Judgment; denied Plaintiffs' Motion for Partial Summary Judgment (Statute of Limitations) and to Establish Tolling; and granted in part and denied in part Plaintiff's Motion for Partial Summary Judgment on Jack in the Box's 8th (Private Right Of Action), 9th (Due Process) and 12th (Preemption) Affirmative Defenses. Specifically, the Court (1) granted Plaintiffs' Motion for Partial Summary Judgment as to Defendant's Eighth Affirmative Defense and dismissed that Defense with prejudice; (2) granted Plaintiffs' Motion for Partial Summary Judgment as to Defendant's Twelfth Affirmative Defense as to those portions of Plaintiffs' Seventh and Eighth Claims that are preempted by the FLSA or Oregon's wage-and-hour laws as set out in the Court's March 10, 2016, Opinion and Order; and (3) denied in part Plaintiffs' Motion for Partial Summary Judgment as to Defendant's Twelfth Affirmative Defense as to those portions of Plaintiff's Seventh and Eighth Claims that are not preempted by the FLSA or Oregon's wage-and-hour laws as set out in the Court's March 10, 2016, Opinion and Order. In summary, the Court noted this matter would go forward as to named Plaintiffs' state-law wage-and-hour claims; Jason Diaz's FLSA claims; and named Plaintiffs' FLSA claims from March 29, 2010, to the present.

         On March 24, 2016, the parties filed a Joint Statement in which they agreed the following claims remained in this matter: (1) Plaintiffs' state-law wage-and-hour claims; (2) Plaintiffs' Seventh and Eighth Claims to the extent that they do not overlap with state or federal statutory claims; (3) Diaz's FLSA claims; and (4) Plaintiffs' FLSA claims for the period from March 29, 2010, to the present. Defendant also advised the Court that it intended to move for summary judgment against Diaz's claims based in part on his arbitration agreement with Defendant.

         On July 7, 2016, the Court issued an Order in which it granted Defendant leave to file dispositive motions as to the following issues:

(1) all FLSA claims asserted by Plaintiffs for the period beginning March 29, 2010, to the present on the ground that Defendant is not a joint employer of franchisee employees;
(2) all FLSA claims asserted by Diaz on the ground that he failed to file a written consent under the FLSA;
(3) all state and federal claims asserted by Diaz on the grounds that (a) he was required to arbitrate those claims and (b) he failed to pursue his claims in arbitration after his individual lawsuit (3:11-cv-0006-JO) was dismissed; and
(4) all FLSA claims of any California putative class members subject to the class settlements in the cases of Frederick v. Jack-In-The-Box, Inc., No. RIC50144, and Olvera v. Jack In The Box, Inc., No. 37-2013-00072707.

         On September 1, 2016, Defendant filed its Motion for Partial Summary Judgment as permitted by the Court in its July 7, 2016, Order.

         On December 13, 2016, the Court issued an Opinion and Order in which it granted in part and denied in part Defendant's Motion as follows:

1. granted Defendant's Motion as to Plaintiffs' FLSA claims for the period beginning March 29, 2010, to the present on the ground that Defendant was not Plaintiffs' joint employer during that period;
2. granted Defendant's Motion as to Diaz's state and federal claims on the ground that Diaz is required to arbitrate his claims under the terms of the arbitration agreement; and
3. denied as premature Defendant's Motion as to the FLSA claims of California putative class members subject to the class settlements in the Frederick and Olvera cases.

         On February 2, 2017, the Court held a status conference and directed Plaintiffs to file their Motion to Certify Rule 23(b)(3) Classes by March 3, 2017.

         On March 2, 2017, Plaintiffs filed a Motion for Rule 23(b)(3) Class Certification.

         On June 12, 2017, the Court issued an Opinion and Order in which it granted in part and denied in part Plaintiffs' Motion as follows:

1. granted Plaintiff's Motion to Certify the Workers Benefit Fund (WBF) Class,
2. granted Plaintiff's Motion to Certify the Shoe Class,
3. granted Plaintiff's Motion to Certify the Franchise Transfer Class, and
4. denied Plaintiffs' Motion to Certify the Unpaid Break Class.

         On May 3, 2019, Defendant filed five Motions for Summary Judgment:

1. Motion (#161) for Summary Judgment No. 1 - Arbitration of Claim
2. Motion (#162) for Summary Judgment No. 2 - WBF Deduction Claims Barred by Tax Laws
3. Motion (#163) for Summary Judgment No. 3 - Remedies Related to Alleged Wrongful Deductions Are Limited
4. Motion (#164) for Summary Judgment No. 4 - Breach of Fiduciary Duty Tort Claims is Time-Barred
5. Motion (#165) for Summary Judgment No. 5 - Quasi-Contract/Unjust Enrichment Claim Fails as a Matter of Law.

         On May 24, 2019, Plaintiffs filed ten Motions for Partial Summary Judgment:

1. Motion (#172) for Partial Summary Judgment on the Issue of Prima Facie Liability on Their Workers' Benefit Fund Claims
2. Motion (#173) for Partial Summary Judgment on the Issue of Prima Facie Liability on Their Shoe Claims
3. Motion (#174) for Partial Summary Judgment on the Issue of Prima Facie Liability on Their Franchise Transfer Claims
4. Motion (#175) for Partial Summary Judgment on the Issue of Damages under O.R.S. 652.615
5. Motion (#176) for Partial Summary Judgment on the Issue of Damages under O.R.S. 653.025
6. Motion (#177) for Partial Summary Judgment on the Issue of Damages under O.R.S. 653.261
7. Motion (#178) for Partial Summary Judgment on the Issue of Damages under O.R.S. 652.140
8. Motion (#179) for Partial Summary Judgment on Jack in the Box's Third Affirmative Defense (Authorized Deductions)
9. Motion (#180) for Partial Summary Judgment on Jack in the Box's Fourth Affirmative Defense (Benefit to Employees)
10. Motion (#181) for Partial Summary Judgment on Jack in the Box's Fifth Affirmative Defense (Valid Deduction).

         STANDARDS

         Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Washington Mut. Ins. v. United States, 636 F.3d 1207, 1216 (9th Cir. 2011). See also Fed. R. Civ. P. 56(a). The moving party must show the absence of a genuine dispute as to a material fact. Emeldi v. Univ. of Or., 673 F.3d 1218, 1223 (9th Cir. 2012). In response to a properly supported motion for summary judgment, the nonmoving party must go beyond the pleadings and point to "specific facts demonstrating the existence of genuine issues for trial." In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010) "This burden is not a light one. . . . The non-moving party must do more than show there is some 'metaphysical doubt' as to the material facts at issue." Id. (citation omitted).

         A dispute as to a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002)(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The court must draw all reasonable inferences in favor of the nonmoving party. Sluimer v. Verity, Inc., 606 F.3d 584, 587 (9th Cir. 2010). "Summary judgment cannot be granted where contrary inferences may be drawn from the evidence as to material issues." Easter v. Am. W. Fin., 381 F.3d 948, 957 (9th Cir. 2004)(citing Sherman Oaks Med. Arts Ctr., Ltd. v. Carpenters Local Union No. 1936, 680 F.2d 594, 598 (9th Cir. 1982)).

         "A non-movant's bald assertions or a mere scintilla of evidence in his favor are both insufficient to withstand summary judgment." F.T.C. v. Stefanchik, 559 F.3d 924, 929 (9th Cir. 2009)(citation omitted). When the nonmoving party's claims are factually implausible, that party must "come forward with more persuasive evidence than otherwise would be necessary." LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009) (citing Blue Ridge Ins. Co. v. Stanewich, 142 F.3d 1145, 1149 (9th Cir. 1998)).

         The substantive law governing a claim or a defense determines whether a fact is material. Miller v. Glenn Miller Prod., Inc., 454 F.3d 975, 987 (9th Cir. 2006). If the resolution of a factual dispute would not affect the outcome of the claim, the court may grant summary judgment. Id.

         DEFENDANT'S MOTION (#161) FOR SUMMARY JUDGMENT NO. 1 - ARBITRATION OF CLAIM

         For the reasons that follow the Court DENIES Defendant's Motion (#161) for Summary Judgment No. 1 - Arbitration of Claim.

         Defendant moves for summary judgment as to all of Plaintiffs' claims on the ground that those claims are subject to mandatory arbitration. Plaintiffs, however, assert Defendant has not established Plaintiffs signed an Arbitration Agreement that requires them to arbitrate their claims, Defendant waited too long to demand arbitration, and the proper remedy would be to stay this matter rather than dismiss it even if the Arbitration Agreement was enforceable.

         I. Arbitration Agreement

         Defendant relies on the Declaration of Susan Pettijohn to support its assertion that the named Plaintiffs remaining in this action signed the same Arbitration Agreement as Diaz, which, as noted, required Diaz to arbitrate his claims. See Opin. and Order (#108)(Dec. 13, 2016). Pettijohn testifies she has been a Human Resources Project Manager for Defendant for 22 years. She states

[b]etween 2005 and 2014, new employees were required to log onto a CBT terminal to review various new-hire documents such as Jack in the Box's arbitration agreement. . . . After the new employee reviewed the agreement, he or she was presented with an acknowledgement screen. The new employee would then either click “yes” to accept the agreement or click “no” if they did not. If the employee clicked “yes”, he or she was then required to enter a confidential password which acted as his or her electronic signature to the agreement. An electronic record of the new employee signing the agreement is then stored in Jack in the Box's HRIS system and becomes part of the employee's personnel record.
Each of the named plaintiffs Jessica Gessele, Ashley Gessele, Nicole Gessele, Tricia Tetrault, and Christina Mauldin electronically signed Jack in the Box's Dispute Resolution Agreement in the manner described above. Their agreements and the dates thereof (“Transaction Date”) are found in the electronic records stored in Jack in the Box's HRIS system in the regular course of business.
Attached Exhibit BB contains true and accurate copies (excepting the redaction of SSN and Birth Date) of the named plaintiffs' electronic agreements to Jack in the Box's Dispute Resolution Agreement.
* * *
[The] December 2003 version of Jack in the Box's Dispute Resolution Agreement was used with all employees between December 2003 and October 2010.

         Decl. of Susan Pettijohn at ¶¶ 4-6. Exhibit BB to Pettijohn's Declaration contains electronic printouts of each remaining named Plaintiff's acknowledgment of an Arbitration Agreement.

         Defendant's Arbitration Agreement in place between 2003 and 2010 provided:

In signing the Acknowledgment and Receipt, both the Company and the Employee agree that all claims or disputes covered by this Agreement must be submitted to binding arbitration, and that this binding arbitration will be the sole and exclusive remedy for resolving any such claim or dispute. This promise to resolve claims by arbitration is equally binding upon the Company and the Employee.
* * *
This Agreement applies to the following allegations, disputes, and claims for relief Employee may presently or in the future have against the Company . . . and all claims that the Company may presently or in the future have against the Employee in any way related to Employee's employment or termination: . . . compensation disputes including wages, overtime, penalties, bonus payments and benefits; [and] contractual violations (although no contractual relationship is hereby created other than this Agreement).

         Pettijohn Decl., Ex. CC at 1.

         As the Court noted in its December 13, 2016, Opinion and Order, Oregon law specifically permits electronic signatures to bind individuals to agreements. See, e.g., Or. Rev. Stat. § 84.004(8)(“Electronic signature” means an electronic sound, symbol or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”); Or. Rev. Stat. § 84.019(1)(“A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.”).

         On this record the Court concludes Defendant has established the remaining named Plaintiffs signed an Arbitration Agreement in a legally binding and acceptable manner.

         II. Terms of the Agreement

         According to Plaintiffs, however, even if Defendant has established Plaintiffs signed the Arbitration Agreement, Defendant has not established the terms of the Arbitration Agreement apply because it has “produced no evidence whatsoever that any of the named plaintiffs' claims exceed $15, 000, ” and the Arbitration Agreement provides: “The following claims or disputes are not covered by this Agreement: . . . claims seeking ...


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