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No. 10742047
United States Court of Appeals for the Ninth Circuit
Gessele v. Jack in the Box Inc.
No. 10742047 · Decided November 25, 2025
No. 10742047·Ninth Circuit · 2025·
FlawFinder last updated this page Apr. 2, 2026
Case Details
Court
United States Court of Appeals for the Ninth Circuit
Decided
November 25, 2025
Citation
No. 10742047
Disposition
See opinion text.
Full Opinion
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JESSICA GESSELE; ASHLEY No. 23-2522
ORTIZ; NICOLE GESSELE;
D.C. No.
TRICIA TETRAULT; CHRISTINA
3:14-cv-01092-
MAULDIN, on behalf of themselves
HZ
and all others similarly situated,
Plaintiffs - Appellees,
OPINION
v.
JACK IN THE BOX INC., a
Delaware Corporation,
Defendant - Appellant.
JESSICA GESSELE; ASHLEY No. 23-2527
ORTIZ; NICOLE GESSELE; D.C. No.
TRICIA TETRAULT; CHRISTINA 3:14-cv-01092-
MAULDIN, HZ
Plaintiffs - Appellants,
v.
JACK IN THE BOX INC.,
Defendant - Appellee.
2 GESSELE V. JACK IN THE BOX INC.
Appeal from the United States District Court
for the District of Oregon
Marco A. Hernandez, District Judge, Presiding
Argued and Submitted August 20, 2025
Portland, Oregon
Filed November 25, 2025
Before: CONSUELO M. CALLAHAN, MILAN D.
SMITH, JR., AND SALVADOR MENDOZA, JR., Circuit
Judges.
Opinion by Judge Milan D. Smith, Jr.
SUMMARY *
Wage and Hour Claims / Oregon Law
The panel reversed in part and affirmed in part the
district court’s judgment in a wage-and-hour case brought by
plaintiffs against their former employer, Jack in the Box
(JITB), on behalf of themselves and a class of other former
employees.
Plaintiffs challenged three JITB policies: JITB
overdeducted its employees’ wages for the Oregon Workers’
Benefit Fund (WBF), JITB did not pay workers for
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
GESSELE V. JACK IN THE BOX INC. 3
interrupted meal periods more than 20 minutes long, and
JITB deducted employees’ pay for non-slip shoes.
Plaintiffs prevailed on the WBF claims, and JITB
defeated the unpaid break and shoe claims. JITB appealed,
and plaintiffs cross-appealed. The panel reversed the district
court’s judgment on the WBF and shoe claims, and
remanded, and affirmed the district court’s judgment on the
unpaid break claims.
Addressing JITB’s appeal concerning the WBF
overdeductions, the panel held that the district court erred in
finding, at summary judgment, that JITB’s overdeductions
were willful such that JITB owed penalty wages, and
remanded for a trial on willfulness. To help the district court
and the parties retry the case, the panel also provided
guidance on a penalty wage theory the parties call “Late
Final Pay 1”—a claim for penalty wages for WBF
overdeductions but not minimum wage or overtime
violations—and the constitutional limits on penalty wages.
Next, the panel held that the district court did not abuse
its discretion in declining to exclude the class members
whose mailed notices were undeliverable, nor did the district
court err in refusing to reduce the prejudgment interest for
plaintiffs’ alleged delays. However, on remand, the district
court will have to recalculate the prejudgment interest in
light of the holding on willfulness.
Addressing plaintiffs’ cross-appeal, the panel held that it
had jurisdiction. Because the district court granted JITB’s
Fed. R. Civ. P. 50(b) motion, the 30-day deadline of Fed. R.
App. P. 4(a)(1)(A) ran from the amended judgment, and the
cross-appeal was timely.
4 GESSELE V. JACK IN THE BOX INC.
The panel rejected plaintiffs’ challenges to how the
district court’s rulings on their unpaid break claims. First,
the district court did not abuse its discretion in refusing to
certify the unpaid break class. Second, the district court did
not err in granting JITB’s renewed motion for judgment as a
matter of law on the named plaintiffs’ individual claims
because plaintiffs waived the theory that they could prevail
individually by proving JITB breached its On-Duty Meal
Policy Agreements with plaintiffs.
The panel reversed the district court’s judgment on the
shoe claims. The panel held that the district court erred in
granting partial summary judgment to JITB on its
affirmative defense that the shoe deductions were for its
employees’ benefit, and reversed and remanded so a jury can
decide whether the shoe requirement was for the employees’
benefit. The panel also remanded so the district court can
reconsider whether to certify the shoe class.
COUNSEL
Jon M. Egan (argued), Jon M. Egan PC, Lake Oswego,
Oregon; Jim W. Vogele, Jim W. Vogele, Attorney at Law,
Portland, Oregon; for Plaintiffs-Appellees.
David P.R. Symes (argued), Symes Law Office LLC, Sandy,
Oregon; Ian T. Maher, Douglas S. Parker, and Heather St.
Clair, Ballard Spahr LLP, Portland, Oregon; for Defendant-
Appellant.
GESSELE V. JACK IN THE BOX INC. 5
OPINION
M. SMITH, Circuit Judge:
In this wage-and-hour case, Plaintiffs sued their former
employer, Defendant Jack in the Box (JITB), on behalf of
themselves and a class of other former employees. The
claims at issue challenge three JITB policies: JITB
overdeducted its employees’ wages for the Workers’ Benefit
Fund (WBF), did not pay workers for interrupted meal
periods more than 20 minutes long, and deducted
employees’ pay for non-slip shoes. The district court
narrowed the issues pretrial, finding at summary judgment
that JITB’s WBF overdeductions were willful and that the
shoe deductions were for Plaintiffs’ benefit. The jury
resolved the remaining issues. Post-trial, the district court
rejected all of Plaintiffs’ shoe claims because Plaintiffs
authorized the shoe deductions in writing.
Plaintiffs prevailed on the WBF claims, and JITB
appeals from the judgment against it. But JITB defeated the
unpaid break and shoe claims, and Plaintiffs cross-appeal
from certain rulings against them. We conclude that the
district court erred by rushing to summary judgment on the
willfulness and benefit issues. We also conclude that the
district court erred in holding that written authorization was
a defense to all the shoe claims. Accordingly, we reverse the
judgment on the WBF and shoe claims and remand. We
affirm on the unpaid break claims.
FACTUAL AND PROCEDURAL BACKGROUND
I. Workers’ Benefit Fund Deductions
The WBF funds itself by collecting an assessment, half
from employers and half from employees. Or. Rev. Stat.
6 GESSELE V. JACK IN THE BOX INC.
§§ 656.506(2), 656.506(3), 656.612. In 2003, the WBF
gathered 3.6 cents per hour worked. Each employer
deducted 1.8 cents per hour from each employee’s
paychecks. Then, the employer paid the state 3.6 cents per
hour worked, the 1.8 cents taken from the employee plus 1.8
cents per hour out of its own coffers.
JITB processed these WBF deductions using a computer
program called Lawson. At some point, JITB set up Lawson
to deduct 1.8 cents per hour from all hourly employees in
Oregon. In 2003, JITB used the accurate rate, and it evenly
split the assessment with its employees.
Over the next few years, Oregon decreased the WBF
assessment rate. JITB paid the correct, reduced amount to
Oregon, but it never updated the amount deducted from
employees. So, during the class period, employees paid
more than half the WBF assessment:
Year Total Amount Amount Amount
paid to employees JITB each
Oregon actually actually should
paid paid have paid
2004 3.4 ¢/hr 1.8 ¢/hr 1.6 ¢/hr 1.7 ¢/hr
2005 3.4 ¢/hr 1.8 ¢/hr 1.6 ¢/hr 1.7 ¢/hr
2006 3.0 ¢/hr 1.8 ¢/hr 1.2 ¢/hr 1.5 ¢/hr
2007 2.8 ¢/hr 1.8 ¢/hr 1.0 ¢/hr 1.4 ¢/hr
2008 2.8 ¢/hr 1.8 ¢/hr 1.0 ¢/hr 1.4 ¢/hr
2009 2.8 ¢/hr 1.8 ¢/hr 1.0 ¢/hr 1.4 ¢/hr
2010 2.8 ¢/hr 1.8 ¢/hr 1.0 ¢/hr 1.4 ¢/hr
2011 2.8 ¢/hr 1.8 ¢/hr 1.0 ¢/hr 1.4 ¢/hr
In February 2012, JITB discovered the error and
corrected it.
GESSELE V. JACK IN THE BOX INC. 7
II. Unpaid Breaks
During shifts longer than six hours, JITB employees
usually took unpaid 30-minute meal periods. See Or.
Admin. R. 839-020-0050(2)(a). But when business was
heavy, JITB management would recall employees before
their breaks ended. JITB treated breaks as meal periods, and
did not pay for them, if the employee was on break for at
least 20 of the 30 minutes. Thus, JITB would pay for a lunch
period cut to 18 minutes but not a lunch period reduced to 25
minutes. Even so, JITB paid its employees for every minute
they worked. Thus, if a meal period was shortened from 30
to 25 minutes, JITB paid for the 5 minutes worked but not
the other 25 minutes.
III. Shoe Deductions
Before 2003, JITB did not require employees to wear a
certain brand of shoes; any slip-resistant shoe sufficed. But
JITB became concerned about the number of slip-and-fall
incidents at its restaurants. JITB employees were injured
25% more frequently than the industry average. JITB lost
more than $3 million per year to slip-and-fall claims.
To reduce these injuries, JITB decided to require
employees to wear non-slip shoes from Shoes for Crews or
Footstar. While picking a vendor, JITB listed each offer’s
pros and cons. Shoes for Crews would charge employees
more than Footstar by about $2 per shoe. But Shoes for
Crews also promised to pay a $2 per shoe rebate to JITB. In
other words, with Shoes for Crews, the vendor would keep
the same amount, but each employee would pay $2 more,
and JITB would extract $2 per employee. Shoes for Crews
also promised to indemnify JITB for certain injuries suffered
by employees wearing its shoes; Footstar did not.
8 GESSELE V. JACK IN THE BOX INC.
JITB decided to make employees purchase from Shoes
for Crews. 1 After doing so, JITB collected more than $1
million in rebates and $295,000 in indemnities. During that
period, JITB employees buying shoes could pay by
authorizing paycheck deductions. If they did so, JITB would
purchase the shoes directly from Shoes for Crews. JITB
would deduct the price in three or four installments from the
employee’s later paychecks. After JITB paid Shoes for
Crews, it would receive a $2 rebate.
IV. Pretrial Proceedings
JITB employed the named Plaintiffs at its Oregon
restaurants at various times. But all left JITB by March 29,
2010. By 2011, JITB sold all its Oregon restaurants to
franchisees. After September 30, 2011, it did not have any
Oregon employees.
Plaintiffs sued JITB several times. The suits began in
August 2010. The next few years have a tortured history,
with various Plaintiffs coming and going as various
jurisdictional issues were litigated. In June 2014, Plaintiffs
filed the operative Complaint, and the case inched ahead.
In June 2017, the district court certified classes to
challenge the WBF and shoe deductions. But it required
Plaintiffs to bring their unpaid break claims individually
because it found their claims depended on the reason each
break was shortened. The district court appointed a class
administrator and authorized the administrator to mail
notices to the class members. Of the 5,105 class members,
notices mailed to 856 were undeliverable.
1
The district court found this fact genuinely disputed. At summary
judgment, that dispute must be resolved in the non-moving Plaintiffs’
favor.
GESSELE V. JACK IN THE BOX INC. 9
Eventually, the parties cross-moved for summary
judgment, which the district court granted in part and denied
in part. It decided three key points. First, the district court
concluded that JITB’s WBF overdeductions were willful.
Second, it found the shoe deductions were for the
employees’ benefit. Third, in a footnote, it said the parties
had agreed that the final paycheck claims relate only to the
franchise transfer class.
Over the next two years, Plaintiffs moved twice more to
certify an unpaid break class, citing a new case interpreting
Oregon’s meal break regulation, but the district court
refused. JITB tried, initially unsuccessfully, to decertify the
shoe class. But then, at the pretrial conference, the district
court decertified the shoe class, ruling that the remaining
shoe issues required individual proof. Yet it declined to
exclude the 856 class members who did not receive mailed
notices, finding they received the best notice practicable.
V. Trial and Post-Trial Proceedings
Later that month, the case was tried by a jury. Plaintiffs
presented a damages theory both parties call “Late Final Pay
1.” JITB objected, contending that Plaintiffs waived this
theory and citing the footnote from the summary-judgment
ruling. The district court reconsidered that footnote and
permitted Plaintiffs to seek Late Final Pay 1 damages.
The jury resolved the outstanding claims. First, on the
WBF class claim, the jury found Plaintiffs had proven that
some class members were not paid minimum wages, not paid
sufficient overtime, and/or paid their final wages late due to
a WBF overdeduction. The jury found JITB overdeducted
by $13,468.37. For those overdeductions, the jury awarded
10 GESSELE V. JACK IN THE BOX INC.
penalty wages of $5,307,589.60. 2 Second, on the named
Plaintiffs’ shoe claims, the jury found that each authorized
their shoe deductions in writing. Thus, they recovered no
statutory damages. But the jury awarded them $21,112.80
in penalty wages, which reflected both the WBF claims and
the shoe claims. Third, the named Plaintiffs won their
unpaid break claims resulting in an additional damage
award.
JITB filed post-trial motions challenging the verdict.
First, the district court granted JITB’s motion to override the
jury’s verdict by excluding the penalty wages claimed for the
shoe deductions. It reduced the $21,112.80 penalty wage
award to $11,500.80 to reflect only the WBF claims.
Second, JITB asked the district court to reduce the penalty
wages awarded to the WBF class, claiming the award
violated due process. The district court disagreed. Third,
JITB asked the district court to toll prejudgment interest,
arguing that Plaintiffs unreasonably delayed the action. The
district court refused, finding it lacked discretion to do so.
The district court entered a judgment reflecting these
rulings. JITB renewed its motion for judgment as a matter
of law (JMOL) on the unpaid break claims. On August 8,
2023, the district court granted that motion, striking the
unpaid break award. On September 2, it entered an amended
judgment. JITB appealed on September 6. Plaintiffs
appealed on October 1.
2
In the amended judgment, the WBF class only received $5,301,681.60
in penalty wages. In its penalty-wage analysis, the district court said the
jury had awarded roughly $6,000 more. Because the discrepancy is not
material, we use the number from the district court’s analysis.
GESSELE V. JACK IN THE BOX INC. 11
JURISDICTION AND STANDARD OF REVIEW
The district court had jurisdiction pursuant to 28 U.S.C.
§ 1331. We have appellate jurisdiction pursuant to 28
U.S.C. § 1291.
We review the following de novo: the district court’s
decisions on motions for summary judgment, Desire, LLC v.
Manna Textiles, Inc., 986 F.3d 1253, 1259 (9th Cir. 2021);
its evaluation of “[w]hether a damages award violates due
process,” Wakefield v. ViSalus, Inc., 51 F.4th 1109, 1120
(9th Cir. 2022); its “interpretation of whether prejudgment
interest is permitted under [a] statute,” Y.Y.G.M. SA v.
Redbubble, Inc., 75 F.4th 995, 1000 (9th Cir. 2023); and its
decisions on renewed motions for judgment as a matter of
law, Tan Lam v. City of Los Banos, 976 F.3d 986, 995 (9th
Cir. 2020).
We review the following for abuse of discretion: the
district court’s “decision to reconsider an interlocutory order
by another judge of the same court,” Amarel v. Connell, 102
F.3d 1494, 1515 (9th Cir. 1996); and its decisions regarding
class certification, Castillo v. Bank of Am., NA, 980 F.3d
723, 728 (9th Cir. 2020) (quoting Pulaski & Middleman,
LLC v. Google, Inc., 802 F.3d 979, 984 (9th Cir. 2015)).
ANALYSIS OF JITB’S APPEAL
This appeal focuses on the WBF overdeductions. WBF
contributions must be split evenly between employer and
employee. See Or. Rev. Stat. §§ 656.506(2), 656.506(3).
Because JITB made its employees pay more than their share,
they can recover the amounts JITB should not have
deducted. Also, if JITB overdeducted willfully, Plaintiffs
can seek penalty wages. See Or. Rev. Stat. § 652.150(1).
Although Plaintiffs must prove willfulness to succeed on any
12 GESSELE V. JACK IN THE BOX INC.
penalty wage theory, they have several such theories. The
parties call one of those theories “Late Final Pay 1.” Beyond
the overdeductions and penalty wages, Plaintiffs can also
recover prejudgment interest. See Or. Rev. Stat.
§ 82.010(1)(a). The jury awarded all these categories of
damages.
JITB seeks to chip away at that award. First, it denies
liability for any penalty wages because the district court
erred in finding the overdeductions willful at summary
judgment. Second, even if JITB owes penalty wages, it
contends that Plaintiffs waived Late Final Pay 1 damages
and should have been blocked from presenting that theory at
trial. Third, even if JITB owes penalty wages, it contends
the award exceeded constitutional limits. Fourth, moving
away from penalty wages, JITB argues that the district court
should not have let the jury award any damages for the class
members not reached by mail. Finally, JITB says the district
court should have tolled the prejudgment interest awarded to
Plaintiffs; it contends the district court erred in finding it
lacked discretion to do so.
We reverse the partial summary judgment against JITB
and remand for a trial on willfulness. This disposes of the
penalty wage award. To help the district court and the
parties retry the case, we also provide some guidance on Late
Final Pay 1 damages and the constitutional limits on penalty
wages. We affirm on the last two issues.
I. The district court erred in finding, at summary
judgment, that JITB’s overdeductions were willful.
To recover penalty wages, Plaintiffs must prove JITB
“willfully fail[ed] to pay . . . wages . . . of an[] employee
whose employment cease[d.]” Or. Rev. Stat. § 652.150(1).
Often, a plaintiff will stumble trying to prove a defendant’s
GESSELE V. JACK IN THE BOX INC. 13
state of mind. These Plaintiffs face an especially difficult
task: to defend their summary-judgment victory, they must
proffer enough evidence that no reasonable jury could credit
JITB’s testimony that it did not know about the
overdeductions. Plaintiffs have not met that burden. The
district court’s reasoning—and Plaintiffs’ arguments—do
not show otherwise.
A. Plaintiffs must prove that JITB overdeducted
while fully aware of the circumstances and did not
miscalculate unintentionally.
In Oregon employment law, “[a]n employer . . . willfully
fails to pay wages owed at termination only if it is ‘fully
aware of [its] obligation to do so’ but nonetheless
consciously and voluntarily decides not to fulfill that
obligation.” Wilson v. Smurfit Newsprint Corp., 197 Or.
App. 648, 660 (2005) (alteration in original) (quoting State
ex rel. Nilsen v. Johnston, 233 Or. 103, 108 (1962) (en
banc)). To be sure, “the word ‘wilful,’ . . . does not
necessarily imply anything blamable, or any malice or
wrong toward the other party, or perverseness or moral
delinquency, but merely that the thing done or omitted to be
done was done or omitted intentionally.” Sabin v.
Willamette-W. Corp., 276 Or. 1083, 1093 (1976) (quoting
Johnston, 233 Or. at 108). Willfulness requires “nothing
more than this: [t]hat the person knows what he is doing,
intends to do what he is doing, and is a free agent.” Id.
(quoting same). But that rule incorporates two limits on
willfulness.
First, “an employer does not act willfully if it . . . acts
based on an innocent miscalculation that is not careless.”
Wilson, 197 Or. App. at 662–63. Oregon courts also label
14 GESSELE V. JACK IN THE BOX INC.
these mistakes “unintentional miscalculations.” See, e.g., id.
at 660; Sabin, 276 Or. at 1094.
Second, “an employer does not act willfully if it acts
without fully knowing that the historical circumstances
triggering the obligation have occurred.” Wilson, 197 Or.
App. at 662. For example, the employer must know whether
“an identified employee has not received the wages he or she
has earned.” Id. at 665. “A reasonable lack of knowledge
of [that] historical fact[] immunizes the employer from
penalties.” Id. “Further, not any quantum of knowledge
exposes the employer to penalties”; only full awareness will
do. Id.
Likewise, Plaintiffs must show JITB willfully
overdeducted. The statute only touches employers who
“willfully fail[] to pay any wages or compensation [owed to]
any employee” by violating certain statutes. Or. Rev. Stat.
§ 652.150(1). It does not reach employers who “reasonably
believe[] that the employee cannot make a prima facie case
that the wages are due and owing.” Wilson, 197 Or. App. at
665. Here, Oregon employers may—indeed, must—deduct
WBF contributions from employee paychecks. Or. Rev.
Stat. §§ 656.506(2), 652.610(3)(a). Plaintiffs only challenge
the deductions made using the old, higher rates. Only that
excess could violate the wage deduction statute, and only
that excess could be due and owing. Thus, we focus on that
excess.
B. A reasonable jury could find JITB did not use the
old employee rate willfully.
A reasonable jury could find JITB did not know it was
making excess WBF deductions. JITB proffered deposition
testimony that it first learned of the error in February 2012.
Plaintiffs proffered no contrary testimony. They protest that
GESSELE V. JACK IN THE BOX INC. 15
JITB’s denial is not credible, and a jury might agree. But
courts cannot decide which witnesses are credible at
summary judgment. See Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986). And if the jury credits JITB’s
testimony, JITB did not know any employee had unpaid
wages upon leaving their jobs at JITB. After September
2011, JITB had no employees. If JITB did not learn about
the mistake until 2012, it lacked the knowledge needed to
willfully fail to pay anyone’s final wages.
A reasonable jury could also find that lack of knowledge
reasonable. At most, JITB overdeducted 0.4 cents per hour.
About half the employees lost less than $2 over eight years.
JITB never overdeducted more than $32 from any employee.
Across all Oregon, and during the whole time JITB
overdeducted, the overdeductions totaled about $22,000.
JITB could have missed these minuscule sums without being
careless.
A reasonable jury could find JITB was also not careless
when it relied on its payroll software to handle these
deductions. JITB used a computer program, called Lawson,
to “figur[e] out . . . how much should be deducted from [each
employee’s] checks.” When Oregon’s WBF rate changed,
JITB had to manually update the employee rate. But JITB
might not have known to do so. A reasonable company
might expect commercial payroll software to automatically
split the WBF contributions after the total rate changed.
Though Plaintiffs must prove willfulness, they presented no
evidence that Lawson told JITB to manually update the
employee rate. For example, they introduced no Lawson
manuals or sales materials. Nor have Plaintiffs pointed out
any reason JITB should not have trusted Lawson to figure
out how much to deduct automatically.
16 GESSELE V. JACK IN THE BOX INC.
Even if JITB knew to manually update the employee rate
at one point, it might have forgotten without being careless.
Rates changed at most once per year between 2004 and
2011—and often less frequently than that. Plaintiffs
presented no evidence that anything would remind JITB to
manually update the employee rate. In the interim, JITB’s
staff could have innocently misremembered how to respond
to rate changes.
C. The district court’s reasoning fails because it does
not establish that JITB had the right type of
knowledge.
The district court concluded that JITB must have
willfully overdeducted because JITB correctly updated the
total rate paid to Oregon. Even if JITB knew to update the
total rate, that does not prove it should have known to
manually update the employee rate. Plaintiffs present no
evidence about how the tax payments were updated. For all
anyone can tell, these rates were updated by different people
at different times, using different computer systems in
different ways. Nothing shows that whatever JITB knew
about updating the total rate extended to the employee rate.
Perhaps a reasonable jury might infer knowledge about the
employee rate from the total. But absent more evidence, it
would not have to. Because Plaintiffs sought summary
judgment, the district court erred by drawing their inference
while a reasonable alternative remained.
The district court also suggested that JITB could have
reviewed the employee withholding rate. But this does not
show JITB should have known about its mistake. Oregon
law does not impose penalty wages on unintentional
miscalculations. An employer could prevent almost any
innocent miscalculation by checking for it. If an employer
GESSELE V. JACK IN THE BOX INC. 17
is willful simply because it could have double-checked, no
miscalculation would be unintentional. Nor did the district
court—or Plaintiffs—identify any special reason to check
this deduction. At this stage, and without more, saying JITB
could have checked the deductions does not justify
pummeling it with penalty wages.
Finally, the district court noted that “a defendant
generally must ‘know the facts that make his conduct fit the
definition of the offense,’ even if he does not know that those
facts give rise to [an offense].” Elonis v. United States, 575
U.S. 723, 735 (2015) (internal citation omitted) (quoting
Staples v. United States, 511 U.S. 600, 607 n.3 (1994)).
Elonis governs federal criminal statutes, not Oregon
employment statutes. But more importantly, the maxim that
“ignorance of the law is no excuse” does not help Plaintiffs.
JITB’s ignorance was factual, not legal. The parties dispute
whether JITB should have known that it was using the
outdated rate or that it needed to manually update the
employee rate. These are not points of law. By applying
Elonis to JITB’s ignorance of the facts, the district court
erred.
D. Plaintiffs’ other arguments fail because they
ignore the burden of proof.
Plaintiffs add that they have proven willfulness because
JITB cannot explain why it overdeducted. But this inverts
the burden of proof. Plaintiffs must show why JITB
overdeducted: they must show it acted out of willfulness.
See Wilson, 197 Or. App. at 660. They did not meet their
burden.
Nor can they rely on Oregon’s statutory presumptions to
close the gap. Oregon law presumes that a “person intends
the ordinary consequences of a voluntary act,” “takes
18 GESSELE V. JACK IN THE BOX INC.
ordinary care of the person’s own concerns,” and “follow[s]”
“[t]he ordinary course of business.” Or. Rev. Stat.
§ 40.135(1)(a), (b), (m). Plaintiffs reason that, because JITB
overdeducted, it must have done so willfully. This argument
fails for two reasons.
First, Oregon’s presumptions establish a prima facie case
for the presumed fact. See Or. Rev. Stat. § 40.135(2) (“A
statute providing that a fact . . . is prima facie evidence of
another fact establishes a presumption within the meaning of
this section.”). Plaintiffs could survive JITB’s motion for
summary judgment with a prima facie case, but they must do
more to obtain summary judgment for themselves. After all,
“[w]hether [a] presumption has been overcome . . . is
normally a question for the jury[.]” Lynd v. Rockwell Mfg.
Co., 276 Or. 341, 346 (1976) (en banc). Only “if the [other]
evidence is sufficiently conclusive . . . that reasonable minds
could not differ” can a court take a presumption’s effect from
the jury. Id.
Second, even if these presumptions were absolute, they
do not prove what Plaintiffs need them to. JITB deducted
from its employees’ paychecks. Even if JITB intended the
ordinary consequences of that deduction, a jury would not
have to agree that overdeducting is an ordinary consequence
of deducting. Plaintiffs also argue that JITB exercised
ordinary care and followed the ordinary course of business.
But that only helps Plaintiffs if the jury assumes what
Plaintiffs have yet to prove: an employer exercising ordinary
care and following the ordinary course of business must have
known it was using the outdated rate.
Lastly, Plaintiffs rely on Sabin, but that plaintiff did not
try to prove willfulness at summary judgment. There, the
employer promised vacation pay but reneged. 276 Or. at
GESSELE V. JACK IN THE BOX INC. 19
1094. The employee demanded his pay, but the employer
refused. Id. After a bench trial, the trial court found the
refusal willful. Id. at 1085. Though it was “a close
question,” the Oregon Supreme Court found enough
evidence to affirm. Id. at 1093–94. Unlike in Sabin, we can
only affirm if a reasonable trier of fact would have to, not
just be able to, find willfulness. Moreover, Sabin was close
even though the employee demanded the missing pay. Here,
no employee told JITB about the missing pay, so Plaintiffs’
claim is even weaker. Sabin underscores the district court’s
error in finding willfulness at this point.
* * *
Even so, we remand so a jury can decide whether JITB
was willful rather than granting summary judgment to JITB.
JITB argues that no reasonable juror could find its
overdeductions willful. But the jury would not have to take
JITB’s side. JITB admits that it received each new year’s
rate from Oregon. JITB correctly updated the total rate paid
to Oregon; it could have updated the employee rate too. A
jury could reasonably ask why JITB did not do so. And it
could reasonably find that the answer was carelessness.
Plaintiffs’ best argument is that the record is too sparse to
show exactly what happened here. That argument flounders
when offered to defend the district court’s analysis, but it has
force against JITB’s request for summary judgment.
II. The district court did not abuse its discretion in
ruling that Plaintiffs could present a Late Final Pay 1
theory.
The district court found Plaintiffs waived the Late Final
Pay 1 theory, then reconsidered, and rightly so. We first
unravel the procedural history and then address JITB’s three
challenges to the district court’s reconsideration.
20 GESSELE V. JACK IN THE BOX INC.
A. Plaintiffs did not forswear Late Final Pay 1
damages, and the district court read Plaintiffs’
briefing wrong before getting it right.
When an Oregon employer pays less than it owes in an
employee’s final paycheck, the employer owes penalty
wages. See Or. Rev. Stat. § 652.150. Some employees here
claim penalty wages for WBF overdeductions but not
minimum wage or overtime violations. Those employees
employ a theory the parties call “Late Final Pay 1.”
At summary judgment, Plaintiffs told the district court
that their “case [was] not one that s[ought] a derivative final-
paycheck penalty solely for nonpayment of wages during
employment.” They “ha[d] a final-paycheck class that
s[ought] penalty wages for the straightforward late payment
of the final paycheck upon franchization,” which they do not
raise here. Unlike Plaintiffs’ other claims, “[t]hat violation
applies to the final paycheck only and does not rely on any
previous violation of any statute during employment.”
Plaintiffs did not disclaim the Late Final Pay 1 theory.
Late Final Pay 1 damages trace back to amounts unpaid
because of WBF overdeductions. Thus, they come from a
previous violation of a statute during the claimant’s
employment. By the same token, these damages are not
based solely on nonpayment of wages.
At first, the district court found that Plaintiffs had
disavowed these damages. Judge Brown noted that “[t]he
parties agree Plaintiffs’ final-paycheck claim relates only to
the Franchise Transfer Class and is ‘not derivative or
duplicative of Plaintiffs’ other claims.’” She surmised that
“[t]he final-paycheck claim, therefore is ‘excluded from
[Defendant’s] arguments about prohibiting multiple
penalties.’”
GESSELE V. JACK IN THE BOX INC. 21
Later, Judge Brown took senior status, and Judge
Hernández took over the case. Judge Hernández was
presiding when, at trial, Plaintiffs requested Late Final Pay
1 damages.
In response, he changed the previous decision about Late
Final Pay 1. He acknowledged that Judge Brown
“conclude[d] that [Plaintiffs] had surrendered that claim.”
But he found it “clear that in some of the documents that
were submitted by plaintiffs, that they intended to continue
with pursuing the claim[.]” He also found that JITB would
not be prejudiced if Plaintiffs could present the Late Final
Pay 1 theory. After taking “into consideration what [he]
believe[d] was simply a mistake in Judge Brown’s
understanding,” he found “justice . . . require[d] that [he]
allow the plaintiffs to proceed on this particular issue.” JITB
raises three challenges to that ruling and each one fails.
B. The district court did not sit as an appellate court.
“[O]ne judge of a district court [may not] rule directly on
the legality of another district judge’s judicial acts or . . .
deny another district judge his or her lawful jurisdiction.” In
re McBryde, 117 F.3d 208, 225 n.11 (5th Cir. 1997) (quoting
Dhalluin v. McKibben, 682 F. Supp. 1096, 1097 (D. Nev.
1988)). So “a chief judge” cannot “reassign[] . . . a pending
case . . . without the consent of the presiding judge.” Id. at
225. But “interlocutory orders and rulings made pre-trial by
a district judge are subject to modification by the district
judge at any time prior to final judgment, and may be
modified to the same extent if the case is reassigned to
another judge.” Amarel v. Connell, 102 F.3d 1494, 1515
(9th Cir. 1996), as amended (Jan. 15, 1997) (quoting In re
United States, 733 F.2d 10, 13 (2d Cir. 1984)).
22 GESSELE V. JACK IN THE BOX INC.
That is what happened here. Judge Brown oversaw this
case before taking senior status. Judge Hernández had the
authority to modify Judge Brown’s rulings without
performing appellate review after the case was reassigned to
him.
C. The district court did not abuse its discretion in
reconsidering the prior ruling that Plaintiffs
disavowed the Late Final Pay 1 theory.
A district court may reconsider a prior decision if, among
other things, it “committed clear error or the initial decision
was manifestly unjust.” Sch. Dist. No. 1J, Multnomah Cnty.
v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993).
Here, the district court did not abuse its discretion in
finding clear error. Judge Hernández did not just find Judge
Brown erred. He found it “clear” that the Plaintiffs
“intended to continue with pursuing the claim” here. This
was correct: Plaintiffs did not disclaim this theory. See
supra Section II.A. JITB responds that Judge Hernández
“underst[ood] why [the previous judge] reached [the
opposite] conclusion.” But understanding why an error was
made does not mean the error was not clear.
Because clear error is sufficient to justify
reconsideration, we need not decide whether reconsideration
also avoided manifest injustice.
D. Judicial estoppel does not change the analysis.
JITB forfeited its judicial-estoppel argument. Their
previous briefing on the Late Final Pay 1 damages does not
mention judicial estoppel. JITB cannot blame the district
court for failing to consider a doctrine it never invoked.
GESSELE V. JACK IN THE BOX INC. 23
Also, “the application of judicial estoppel is
discretionary.” United States v. Paulson, 68 F.4th 528, 547
(9th Cir. 2023), cert. denied, 144 S. Ct. 1029 (2024), and
cert. denied sub nom. Pickens v. United States, 144 S. Ct.
1030 (2024). JITB’s argument ticks through judicial
estoppel’s elements. Yet it does not identify any abuse of
discretion. Even if JITB had preserved its argument, it
would fail.
III. The district court erred in analyzing the statutory
penalty wages.
“[A]ggregated statutory damages awards are, in certain
extreme circumstances, subject to constitutional due process
limitations.” Wakefield v. ViSalus, Inc., 51 F.4th 1109, 1121
(9th Cir. 2022). But “damages awarded pursuant to a statute
violate due process only if the award is ‘so severe and
oppressive as to be wholly disproportioned to the offense
and obviously unreasonable.’” Id. at 1120 (quoting St.
Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63, 67 (1919)).
Courts consider several sets of factors in applying this
standard. For one thing, “a court must evaluate an award of
statutory damages ‘with due regard for the interests of the
public, the numberless opportunities for committing the
offense, and the need for securing uniform adherence’ to the
statute.” Id. (quoting same). Also, the following “factors
. . . help assess proportionality and reasonableness”: “1) the
amount of award to each plaintiff, 2) the total award, 3) the
nature and persistence of the violations, 4) the extent of the
defendant’s culpability, 5) damage awards in similar cases,
6) the substantive or technical nature of the violations, and
7) the circumstances of each case.” Id. at 1123 (quoting Six
(6) Mexican Workers v. Ariz. Citrus Growers, 904 F.2d
1301, 1309 (9th Cir. 1990)).
24 GESSELE V. JACK IN THE BOX INC.
After retrial, if a jury finds JITB willfully overdeducted,
the district court will have to reassess the constitutional
limits on any penalty-wage award. Because the record is in
flux, we will not specify the outer limit on such an award.
But the record is developed enough for us to note two errors
in the district court’s prior analysis.
A. The district court erred by failing to consider that
penalty wages penalize defendants, not
compensate plaintiffs.
“Where a statute’s compensation and deterrence goals
are . . . greatly overshadowed by punitive elements,
constitutional due process limitations are more likely to
apply.” Wakefield, 51 F.4th at 1122. “Legislatures are
empowered to prescribe purely punitive penalties for
violations of statutes.” Id. at 1123. So “just because an
aggregate award becomes predominantly punitive does not
render it constitutionally unsound.” Id. at 1124. But “a
district court must consider the magnitude of the aggregated
award in relation to the statute’s goals of compensation,
deterrence, and punishment and to the proscribed conduct.”
Id. at 1123.
Here, the district court ignored that Oregon’s penalty
wages are penal. “Penalty wages are designed ‘to spur an
employer to the payment of wages when they are due’ and
are punitive, not compensatory, in nature.” N. Marion Sch.
Dist. No. 15 v. Acstar Ins. Co., 343 Or. 305, 316 (2007) (en
banc) (quoting Nordling v. Johnston, 205 Or. 315, 326
(1955)). “Compensation to the employee is merely
GESSELE V. JACK IN THE BOX INC. 25
incidental.” 3 Nordling, 205 Or. at 326 (calling penalty
wages “penal in character”). JITB pointed that out to the
district court. But the district court never touched on this
factor.
On remand, if penalty wages are awarded, the district
court must consider this factor, and it must analyze the
public interest and uniform adherence factors consistent with
what Oregon has said about the purpose of penalty wages.
B. The district court erred by refusing to consider
the ratio between statutory and actual damages.
The ratio between statutory and actual damages matters.
“Although we [have] decline[d] to apply the Supreme
Court’s tests developed” for punitive damages to statutory
damages, those tests still “teach” “by analogy” how to
analyze “statutory damages [that] no longer serve purely
compensatory or deterrence goals.” Wakefield, 51 F.4th at
1122–23. For example, Wakefield relied on the Supreme
Court’s discussion of “the ‘ratio’ between a punitive
damages award and the ‘actual harm inflicted on the
plaintiff’ as measured through compensatory damages.” Id.
at 1123 (citation omitted). Wakefield did not hold that ratio
has the same meaning in the statutory damages context. But
it cited that ratio while describing how punitive and statutory
damages were analogous. That would be jarring unless the
ratio between the award and the injury affected statutory
damages too.
The rest of Wakefield confirms this intuition. It
repeatedly instructed district courts to consider the “award’s
3
Plaintiffs cite State ex rel. Nilsen v. Or. State Motor Ass’n, 248 Or. 133,
138 (1967), but it does not say whether penalty wages punish. Plaintiffs
cite no Oregon court saying penalty wages deter rather than punish.
26 GESSELE V. JACK IN THE BOX INC.
. . . proportionality to the violation and injury[.]” See, e.g.,
id. One cannot tell whether two things are proportional
without evaluating the proportion, or ratio, between them. In
some cases, the actual damages may not be available or may
not be a good proxy of the injury. But when a district court
knows the actual damages, and that amount measures the
injury well, it cannot blind itself to the ratio between that
amount and the award.
The district court did exactly that here. The parties
presented evidence on actual damages. Because Plaintiffs
claim unpaid wages, their injuries are purely economic. The
amount of the overdeductions mirrors the extent of the
injury. Even so, the district court found “that the
constitutionality of a statutorily prescribed penalty is
generally not to be evaluated by its ratio to the damages
suffered by the plaintiff.” On these facts, it erred.
That ratio, if considered, should have raised eyebrows.
The award was based on overdeductions of $13,468.37. 4
But the penalty wages were $5,307,589.60. The penalty was
nearly 400 times greater than the injury.
Because the district court ignored that disparity, it
improperly evaluated the class members’ award, total award,
and the awards in similar cases. None of these factors can
be assessed in isolation. A given sum may be proportionate
to one injury but disproportionate to another. Thus, the class
members’ award and total award may cut differently
depending on the injury suffered. Likewise, two cases are
not similar unless the injuries at issue are comparable. On
4
The WBF overdeductions totaled $21,945.29. But many deductions
fell outside the statute of limitations, so the district court computed
penalty wages for $13,468.37 in overdeductions.
GESSELE V. JACK IN THE BOX INC. 27
remand, if penalty wages are awarded, the district court must
evaluate these factors with an eye to Plaintiffs’ actual
damages.
IV. The district court did not abuse its discretion in
declining to exclude the class members whose
mailed notices were undeliverable.
“For any class certified under Rule 23(b)(3) . . . the court
must direct to class members the best notice that is
practicable under the circumstances, including individual
notice to all members who can be identified through
reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B).
JITB argues that the class members did not receive the
best notice practicable because “no other efforts to reach
class members were employed when [17%] of them received
no notice.” JITB wants to exclude those whose notices were
undeliverable.
JITB has not shown that the district court provided
inadequate notice. Neither JITB’s appellate briefing nor its
trial briefing identifies any other step the district court could
have taken to contact class members.
For that reason, JITB cannot rely on Roes, 1-2 v. SFBSC
Mgmt., LLC, 944 F.3d 1035 (9th Cir. 2019). Roes found
“there were numerous other reasonable options that could
have been pursued to improve the notice process[.]” 944
F.3d at 1047. For example, e-mail notice might work. Id.
Even if that was infeasible, “electronic[] disseminat[ion]
through social media or postings on any relevant online
message boards” could work. Id. In Roes, the class
members were exotic dancers that congregated on sites like
StripperWeb.com and on social media, where they could be
reached by posts and targeted ads. Id. at 1039, 1047. Here,
28 GESSELE V. JACK IN THE BOX INC.
JITB has not argued that it has the class members’ e-mails,
identified online fora where they gather, or proposed any
strategy for reaching them on social media. Also, we were
troubled in Roes “that it might be difficult to reach the class
members because of their ‘transient’ nature.” Id. at 1046.
But nothing shows former JITB employees wander
nomadically. Roes does not show the district court gave
inadequate notice.
Nor did the district court abuse its discretion by
including those whose notices were undeliverable.
“[N]either Rule 23 nor the Due Process Clause requires
actual notice to each individual class member.” Briseno v.
ConAgra Foods, Inc., 844 F.3d 1121, 1128 (9th Cir. 2017).
Even more so when the district court’s risk of “deny[ing] an
absent class member the opportunity to opt out and pursue
individual litigation” is “virtually nonexistent[.]” Id. at
1129. At least once, we have affirmed when a district court
included class members whose notices were undeliverable
and never remailed. See Rannis v. Recchia, 380 F. App’x
646, 650 (9th Cir. 2010). At least here, where nothing
suggests class members want to pursue individual litigation,
and the parties offered no ready way to reach more class
members, it did not abuse its discretion by including those
unreached by mail.
Including these class members did not prejudice JITB
either. JITB argues that it will have to pay a jury award
calculated based on the entire class, even though the
administrator notified only 83% of the class. But JITB never
cites record evidence that the money it owes to the 17%
whose mailings were undeliverable will be paid to the 83%
whose mailings were deliverable. Besides, JITB never aired
this possible windfall while moving for decertification. The
GESSELE V. JACK IN THE BOX INC. 29
district court could not consider prejudice that JITB did not
raise.
V. The district court did not err in refusing to reduce the
prejudgment interest for Plaintiffs’ alleged delays.
Plaintiffs requested prejudgment interest on the jury’s
award. JITB responded that the prejudgment interest should
be reduced because Plaintiffs delayed the case. It blames
Plaintiffs for filibustering two periods of the case and argues
Plaintiffs should get no interest for those times. The district
court found that it had no authority to reduce prejudgment
interest, even for delays caused by Plaintiffs. Both parties
agree that no Oregon court has decided whether that
authority exists. We find that the district court was correct.
For starters, the relevant statute’s text creates no
discretion to reduce prejudgment interest for delays. That
statute mandates prejudgment interest on “[a]ll moneys after
they become due[.]” Or. Rev. Stat. § 82.010(1)(a). As a
result, “prejudgment interest . . . is not a matter of judicial
discretion, but is required by” the statute. Wilson v. Smurfit
Newsprint Corp., 197 Or. App. 648, 673 (2005) (quoting
State Highway Comm’n v. DeLong Corp., 275 Or. 351, 357
n.2 (1976) (en banc)). At least by November 1, 2011,
Plaintiffs’ unpaid wages were due. If the district court had
reduced the prejudgment interest after that, Plaintiffs would
not have received interest on all their money for all the time
it was due. This result cannot be squared with the statute’s
text.
To be sure, “[t]hat uncompromising language . . . has
long been subject to a judicial gloss.” Id. But that gloss does
not support JITB either. As Oregon courts interpret the
statute, “a party can receive prejudgment interest only when
the exact pecuniary amount was either ascertained, or
30 GESSELE V. JACK IN THE BOX INC.
ascertainable by simple computation, or by reference to
generally recognized standards such as market price, and
where the time from which interest must run can be
ascertained.” Id. (cleaned up) (quoting Pub. Mkt. Co. v. City
of Portland, 171 Or. 522, 625 (1943)). Here, Plaintiffs argue
that JITB overdeducted from their paychecks. They claimed
damages for the excess, so the damages were ascertainable
by simple computation. The penalty wages were fixed by
statute and just as easily calculated. See Or. Rev. Stat.
§ 652.150(1). The time from which interest runs is equally
clear: the parties stipulated to October 31, 2011. Though
Wilson’s gloss halts unascertainable prejudgment interest,
that gloss changes nothing here.
Though prejudgment interest depends on
ascertainability, JITB’s position would make prejudgment
interest less ascertainable. A court can easily administer
Plaintiffs’ proposed rule: it finds the first date the damages
can be ascertained and applies prejudgment interest from
there. But JITB urged the district court to divvy the case into
periods that were delayed by Plaintiffs and periods that were
not. To do so, JITB asked the district court to find two of
Plaintiffs’ arguments unreasonable—its joint employer
theory and efforts to certify an unpaid break class. In other
cases, defendants would not have to stop where JITB did.
District courts—and our court—could be called upon to
parse future plaintiffs’ litigation choices at a microscopic
level. If parties can rehash each stage of the case, they may
drown the courts in extra work.
JITB’s rule also clashes with the statute’s purpose. “In
general, such interest is awarded to fully compensate a
judgment creditor for a prejudgment loss of the use of money
or property that otherwise would go unremedied.” Chase v.
Chase, 354 Or. 776, 784 (2014) (en banc). Even if Plaintiffs’
GESSELE V. JACK IN THE BOX INC. 31
counsel should have prosecuted the case more quickly, JITB
still held Plaintiffs’ money during that delay. Plaintiffs
could not have used their money, and JITB could have used,
earned interest on, or invested that money. Plaintiffs will not
be fully compensated unless they receive interest for the
entire time JITB kept their money.
JITB’s best response is that other states have held that,
though prejudgment interest is not discretionary, it may still
be tolled for delays caused by the plaintiff. That rule holds
in at least Florida, Delaware, and Washington. See
Moskowitz v. Mayor & Council of Wilmington, 391 A.2d
209, 210–11 (Del. 1978) (holding that “[i]nterest is awarded
in Delaware as a matter of right and not of judicial
discretion” but that “[a] . . . factor affecting the computation
of interest is whether the plaintiff has been guilty of delay in
pursuing his claim”); Colonial Imports v. Carlton Nw., Inc.,
83 Wash. App. 229, 245 (1996) (noting that “prejudgment
interest [i]s a matter of right where the claim is liquidated,”
but “find[ing] nothing . . . which would cause us to conclude
that the right is necessarily absolute, regardless of delay
attributable to the claimant”); Argonaut Ins. Co. v. May
Plumbing Co., 474 So. 2d 212, 215 (Fla. 1985) (finding that
Florida courts “do[] not have discretion” in applying
prejudgment interest); State v. Fam. Bank of Hallandale, 623
So. 2d 474, 480 (Fla. 1993) (“denying an award of
prejudgment interest” because the interest awarded would
“include[] interest for periods of delay caused by” the
plaintiff).
But at least two states have rejected this logic. In New
York, “prejudgment interest only compensates the judgment
creditor for the loss of use of money he or she was owed and
is not a penalty,” so “the ‘responsibility for the delay [in
bringing suit] should not be the controlling factor in deciding
32 GESSELE V. JACK IN THE BOX INC.
whether interest is to be computed.’” O’Keefe v. Barra, 186
N.Y.S.3d 717, 720–21 (App. Div. 2023) (alteration in
original) (quoting Love v. New York, 78 N.Y.2d 540, 544
(1991)). “Rather, what is dispositive on this point is when
the plaintiff’s right to be compensated for the damages he or
she sustained becomes fixed in law.” Love, 78 N.Y.2d at
544. Likewise, in Ohio, “a prejudgment interest award
begins to run on the date the cause of action accrued” and “a
trial court may not adjust the date the award begins to run for
equitable reasons.” Musisca v. Massillon Cmty. Hosp., 635
N.E.2d 358, 360 (Ohio 1994).
We hold that the reasoning of the decisions of the states
favoring Plaintiffs is more persuasive. Like Oregon, New
York focuses on fully compensating plaintiffs who lost use
of their money and awards prejudgment interest whenever
damages can be fixed. Although Florida, Delaware, and
Washington take after Oregon in that prejudgment interest is
not discretionary, none of these states spoke to the other two
points that persuaded New York.
We therefore affirm the district court’s analysis.
However, the district court will have to recalculate the
prejudgment interest in light of our holding on willfulness.
We remand for that reason.
ANALYSIS OF PLAINTIFFS’ CROSS-APPEAL
This cross-appeal begins with a jurisdictional challenge.
Because the cross-appeal was timely, we reach the merits.
The merits split into two parts.
First, Plaintiffs contest how the district court handled the
unpaid break claims. The district court did not certify an
unpaid break class because Plaintiffs could not prove their
claims class wide. We agree with Plaintiffs that this
GESSELE V. JACK IN THE BOX INC. 33
reasoning breaks down. But later, the district court offered
another reason the class claim could not proceed. That was
correct, so we ultimately affirm. Next, Plaintiffs claim the
district court erred in granting JITB’s renewed motion for
JMOL on their individual claims. They argue that, even if
the class claims fail, they could prevail individually by
proving JITB breached its On-Duty Meal Policy Agreements
with the Plaintiffs. Because Plaintiffs waived this theory,
they cannot rely on it now. We affirm here too.
But we reverse on the shoe claims. JITB could only
deduct from its employees’ wages for the shoes if permitted
by statute. The provision they cite only applies if the shoes
benefited the employees. The district court decided that
JITB had established that fact at summary judgment, but it
erred. A reasonable jury would not have to find that the
shoes benefited Plaintiffs. Next, the district court decertified
the shoe class. It did so because it thought JITB had
established the shoes were for the employees’ benefit and the
remaining issues required individual proof. Because the
district court erred at summary judgment, we remand so the
district court can reconsider. Finally, after trial, the district
court held that, because the shoes were for the employees’
benefit, JITB could count the shoes’ cost towards the
minimum wage and overtime. It reduced the jury’s award
accordingly. Oregon law does not allow that. In sum, we
reverse JITB’s victory on the shoe claims. On remand, the
district court should (1) reconsider whether to certify a shoe
class given our decision; (2) retry the shoe claims (on a class
or individual basis) to see if the shoes were for the
employees’ benefit; and (3) resolve any other issues
consistent with our decision.
34 GESSELE V. JACK IN THE BOX INC.
VI. We have jurisdiction over Plaintiffs’ cross-appeal.
JITB attacks the cross-appeal as untimely. After the
district court entered judgment, JITB moved under Fed. R.
Civ. P. 50(b) on the unpaid break claims. On August 8,
2023, the district court granted that motion. It entered an
amended judgment on September 2. Plaintiffs appealed on
October 1, less than 30 days after the amended judgment but
more than 30 days after the order granting JITB’s motion.
Thus, this cross-appeal is timely only if the 30-day appeal
deadline runs from the amended judgment, not the order.
Generally, “[i]n a civil case . . . the notice of appeal . . .
must be filed . . . within 30 days after entry of the judgment
or order appealed from.” Fed. R. App. P. 4(a)(1)(A). “If a
party files,” among other things, a motion “for judgment
under Rule 50(b)” or a motion “to alter or amend the
judgment under Rule 59,” “the time to file an appeal runs for
all parties from the entry of the order disposing of the last
such remaining motion.” Fed. R. App. P. 4(a)(4)(A). “A
party intending to challenge an order disposing of [those
motions], or a judgment’s alteration or amendment upon
such a motion, must file a notice of appeal . . . within the
time prescribed by this Rule measured from the entry of the
order disposing of the last such remaining motion.” Fed. R.
App. P. 4(a)(4)(B)(ii).
“Read literally, the rule applies” so that “[t]he appeal . . .
expire[s]” 30 days after an order ruling on a Rule 50 or 59
motion. S. Union Co. v. Sw. Gas Corp., 415 F.3d 1001, 1004
(9th Cir. 2005), opinion amended on denial of reh’g, 423
F.3d 1117 (9th Cir. 2005). But we have declined to “read
[this] rule to mean Appeal first, Judgment afterwards.” Id.
Thus, when a district court grants a Rule 50 or 59 motion,
and later amends the judgment, the appeal deadline runs
GESSELE V. JACK IN THE BOX INC. 35
from the amended judgment. 5 See id.; accord Resol. Tr.
Corp. v. Keating, 186 F.3d 1110, 1114 (9th Cir. 1999).
Not so when the Rule 50 or 59 motion is denied.
“[W]hen a district court properly enters an order . . . denying
a party’s Rule 59 motion for a new trial, it is not required to
enter a separate document labeled ‘judgment’ to start the 30–
day period for the filing of a notice of appeal.” Webb v. Ada
County, 285 F.3d 829, 836 (9th Cir. 2002) (distinguishing
Hollywood v. City of Santa Maria, 886 F.2d 1228, 1231–32
(9th Cir. 1989)). As such, “the 30–day period begins to run
when the district court enters a final order denying a Rule 59
motion.” Id.
But here, as in Webb, “the district court did not simply
deny” the post-trial motion. 285 F.3d at 836. Instead, in
both cases, “the district court [granted the motion and]
ordered the parties to submit a final judgment for the court’s
approval” a few days later. Id. So, like the appellant in
Webb, Plaintiffs “timely filed [their] appeal because the 30–
day period began to run when the court filed its amended
judgment[.]” Id.
JITB tries to distinguish those cases because the post-
trial motions were filed pursuant to Fed. R. Civ. P. 59, not
50(b). But that makes no difference. Fed. R. App. P. 4 treats
both motions the same. It creates special rules for the listed
post-trial motions, and Rule 50(b) and 59 motions are on the
same list. Fed. R. App. P. 4(a)(4)(A). To JITB, Rule 59(e)
motions stand apart because they seek an amended
5
JITB argues S. Union differs because that appellant did not have
anything to appeal before the amended judgment. But that is not true. If
JITB were right, the appellant could have appealed the order ruling on
the motion for a new trial—which issued before the amended judgment.
See 415 F.3d at 1003–04.
36 GESSELE V. JACK IN THE BOX INC.
judgment. Yet a Rule 50(b) motion is the same. When, as
here, that motion was filed post-judgment, it seeks an
amended judgment.
Because the district court granted JITB’s Rule 50(b)
motion, the 30-day deadline ran from the amended
judgment, and the cross-appeal is timely. 6
VII. The district court did not abuse its discretion in
refusing to certify the unpaid break class.
The parties’ dispute turns on two separate questions:
whether an employer is always liable when it cuts meal
breaks short, and if liable, whether the remedy is wages for
the length of the shortened break.
Today, courts answer both questions yes, but JITB says
that changed. While at JITB, Plaintiffs received shortened
meal breaks. They left JITB before June 2010. In that
month, Oregon amended its meal break regulation, adding
that employers must pay for shortened breaks. Plaintiffs
sued, claiming JITB should have paid for the shortened
breaks no matter what. The district court declined to certify
an unpaid break class: it did not decide whether Plaintiffs
could claim unpaid wages, but it ruled the class’s claims
turned on the reasons each meal break was shortened. In
2019, in Maza v. Waterford Operations, LLC, 300 Or. App.
471 (2019), the Oregon Court of Appeals held that those
reasons did not matter, and it held that Oregon employers
had to pay for shortened meal breaks. See id. at 480. The
district court held that Maza did not apply before 2019 or at
least not before June 2010. At that time, it decided the issue
6
We deny the motion to supplement the record. The materials in the
motion do not help resolve whether the cross-appeal is timely.
GESSELE V. JACK IN THE BOX INC. 37
ignored before: it held that Plaintiffs could not claim unpaid
wages for shortened breaks before June 2010.
We must decide two points. First, whether the reason for
each shortened break matters. Maza held it did not, and that
part applied before 2010. Second, whether Plaintiffs can
claim unpaid wages. Maza held they could, but that part
applies only after June 2010. We affirm for that reason.
A. The district court’s original reason for refusing to
certify the class contravenes Maza.
At all relevant times, Oregon required that “every
employer shall provide to each employee, for each work
period of not less than six or more than eight hours, a meal
period of not less than 30 continuous minutes during which
the employee is relieved of all duties.” 7 Or. Admin. R. 839-
020-0050(2)(a) (2009).
Plaintiffs claim JITB violated this regulation by calling
employees back to work during their 30-minute meal
periods. Though JITB did not have to pay employees for full
meal breaks, Plaintiffs claim JITB should have paid for these
shortened meal breaks.
The district court refused to certify a class to bring these
claims because the claims required an “individualized
inquiry [that] exceed[ed] the common class questions [so
that] resolution of the unpaid break claims [was] not
amenable to efficient classwide resolution.” “[T]here were
various reasons why [the plaintiffs] may have taken breaks
7
Or. Admin. R. 839-020-0050 underwent several changes over the last
couple decades. Though JITB argues that the rule changed substantially
in June 2010, neither party argues that any other change mattered.
Accordingly, we rely on the 2009 version for the period before June 2010
and the 2011 version for the period thereafter.
38 GESSELE V. JACK IN THE BOX INC.
between 20 and 30 minutes.” And “for each break between
20 and 30 minutes the fact-finder must examine the reason
the employee clocked back in between 20 and 30 minutes to
determine whether the break at issue was a shortened meal
break[.]” Some shortened breaks occurred because
employees “would occasionally return voluntarily . . .
because the restaurant was ‘swamped,’” but others occurred
because “occasionally [some] manager[s] asked
[employees] to return . . . before 30 minutes.” Throughout,
the district court focused on each shortened break’s reason.
Later, the Oregon Court of Appeals forbade courts from
considering those reasons. “[I]f, for whatever reason, an
employee takes a shorter meal period, then . . . wages must
be paid for the entire meal period.” 8 Maza, 300 Or. App. at
476. This resembles “strict liability.” Id. Put differently,
the regulation “requires employees to actually take a 30-
minute meal period, and . . . it is the employer’s
responsibility to enforce that requirement[.]” Id. at 477.
Because employers must enforce meal breaks, whether the
employees voluntarily returned or were ordered to return
does not matter. To the extent Maza applies here, the district
court abused its discretion by relying on that distinction.
The district court—and JITB—attempt to duck Maza for
three reasons, but only the last persuades. 9
8
This quote, and the two that follow, describe the plaintiffs’ position in
Maza. See 300 Or. App. at 476–77. They also reflect Maza’s holding
because Maza closed this discussion by saying, “We agree with
plaintiffs[.]” Id. at 477.
9
In their reply brief, Plaintiffs advance another theory: that JITB also
violated the regulation because Plaintiffs were “‘on call’ during their
meal periods” because they were “subject to being called back to duty[.]”
We do not reach that issue because Plaintiffs waived it twice over. As
GESSELE V. JACK IN THE BOX INC. 39
B. Maza governs meal breaks that occurred before
Maza was decided.
JITB argues—and the district court found—that Maza
applies only prospectively. That is, they contend Maza
applies only to meal breaks after 2019. Because JITB had
no employees after that date, the district court stood by its
refusal to certify this class. But Maza cannot run purely
prospectively because it interpreted a regulation.
When the Oregon Supreme Court adopts “a rule of its
own making,” it sometimes gives “only prospective effect”
to that rule. Halperin v. Pitts, 352 Or. 482, 497 (2012). But
it has not issued purely prospective decisions outside that
context. And it has specifically denied that it has “discretion
to give such limited effect to its interpretation of a legislative
enactment.” Id.; see Kaiser v. Cascade Cap., LLC, 989 F.3d
1127, 1132 n.5 (9th Cir. 2021) (“When Oregon courts
interpret statutes, they apply a newly announced
interpretation of a statute retrospectively to the dispute that
prompted it.”). It lacks that discretion because “[t]he
exercise of judicial discretion to apply interpretations of
statutes only prospectively may raise significant
constitutional issues concerning justiciability, equal
treatment, and separation of powers.” Halperin, 352 Or. at
497 n.4.
No case deals with purely prospective regulatory
interpretation, but the outcome is the same. Such
interpretations raise the concerns from Halperin. When a
court interprets a regulation or statute purely prospectively,
the district court noted, Plaintiffs never argued below “that Plaintiffs
worked continuously or were on call during their meal periods.” Even if
we excused that waiver, Plaintiffs should have raised this theory in their
opening brief. They did not.
40 GESSELE V. JACK IN THE BOX INC.
it cannot affect the parties before it, whose claims arose
before its interpretation. In both cases, the parties are not
truly adversaries, and the court arguably issues an advisory
opinion. And like interpreting statutes prospectively,
interpreting regulations prospectively treats parties
unequally. Those violating the regulation after the
interpretation must contend with—or may exploit—the
interpretation, but those who violate it before may not. This
is true even though no agency changed the regulation (or no
legislature amended the statute). For that reason, separation
of powers cuts against pure prospectivity: construing
regulations prospectively interferes with the executive as
much as construing statutes prospectively interferes with the
legislature.
JITB argues that Oregon courts do have discretion to
interpret “a statute or regulation prospectively to prevent
detriment to those who justifiably relied on overruled
precedent.” But the case it cites does not support that.
There, an Oregon intermediate appellate court “assume[d]”
without deciding that “courts can refuse to apply a decision
retroactively that changes a previous construction of a
statute.” U.S. Nat. Bank v. Wagoner, 71 Or. App. 266, 269
(1984) (emphasis omitted). Even if Wagoner had construed
a statute purely prospectively, it would be trumped by
Halperin, a higher court’s later decision.
JITB also argues that “[t]he substantive rights and
liabilities of persons affected by an event are defined by the
law in effect at the time of the event.” Antonnaci v. Davis,
108 Or. App. 693, 695 (1991). But interpreting the
regulation purely prospectively would undercut, not uphold,
this principle. The substantive law here is the Oregon meal
break regulation. Maza did not change that regulation; it
simply interpreted it. The regulation operated both before
GESSELE V. JACK IN THE BOX INC. 41
and after Maza. JITB’s liability should align before and after
Maza. But if JITB were right, only meal breaks after Maza
would be subject to its holding. Maza must therefore run
retroactively.
C. Maza’s holding that Oregon employers must
enforce meal breaks applies before June 2010.
The district court found that “even if Maza applies
retroactively to the post-June 1, 2010 version of O.A.R. 839-
020-0050, [it] does not apply to the named Plaintiffs”
because they left JITB’s employ before June 2010. Maza
had two holdings: employers must enforce 30-minute meal
breaks (no matter whether and why employees want to return
early), and they must pay for shortened meal breaks. See
300 Or. App. at 476–77. These two holdings have different
bases, so we analyze them separately. The first part of Maza
applies before June 2010.
At that time, the relevant regulatory text was not
changed. Maza held that employers had to enforce meal
breaks because the regulation “states that every employer
shall provide a meal period of not less than 30 minutes
during which the employee is relieved of all duties.” Id. at
477 (cleaned up) (quoting Or. Admin. R. 839-020-
0050(2)(a)). “In ordinary usage, ‘shall’ connotes a
mandatory duty.” Id. Even before June 2010, the regulation
said employers “shall provide” breaks. See Or. Admin. R.
839-020-0050(2)(a) (2009). Thus, it always mandated
breaks.
Maza also relied on four pieces of regulatory context, but
only one of those context clues was changed in 2010.
First, “OAR 839-020-0050(1) states that it ‘prescribes’
minimum meal periods.” 300 Or. App. at 478. The word
42 GESSELE V. JACK IN THE BOX INC.
“prescribe” suggests the regulation mandates breaks because
“[t]o ‘prescribe’ means . . . ‘to lay down a rule : give
directions : DICTATE.’” Id. (quoting Webster’s Third New
Int’l Dictionary 1792 (unabridged ed. 2002)). Even before
June 2010, the regulation used “prescribe” in this way. See
Or. Admin. R. 839-020-0050(1) (2009).
Second, “OAR 839-020-0050(2)(b) states that, if an
employee is not relieved of all duties during ‘the meal
period,’ the employer must pay for the entire 30-minute
period.” 300 Or. App. at 478. Maza reasoned that “[i]f . . .
taking a minimum meal period were voluntary, then the
obligation to pay wages . . . would apply only when the
employer forces the employee to return to work,” “[b]ut the
rule on its face does not include that limitation.” Id. This
provision, however, was added in June 2010. See Or.
Admin. R. 839-020-0050 (2009).
Third, the regulation permits some employees to waive
their meal breaks in writing. 300 Or. App. at 479. “If . . . a
30-minute meal period must only be made available but may
be voluntarily skipped by the employee without
consequence for the employer, then there was no need . . . to
also require a written waiver of a meal period[.]” Id. Even
before 2010, the regulation had this provision. See Or.
Admin. R. 839-020-0050(8) (2009). So even before 2010, it
mandated breaks.
Finally, Maza thought regulators “intended that meal
periods be mandatory” because they are “necessary for the
preservation of the health of employees,” and “permitting
employees to skip [them] . . . would defeat that objective.”
300 Or. App. at 479. Even before 2010, the regulation said
that meal periods were prescribed for health reasons. See Or.
Admin. R. 839-020-0050(1) (2009).
GESSELE V. JACK IN THE BOX INC. 43
Of these four clues, all but the second apply before June
2010. On balance, the pre-2010 regulatory context suggests
that meal breaks are mandatory.
Finally, although Maza did not need to defer to the
Oregon Bureau of Labor and Industries, it found its holding
“consistent with BOLI’s interpretation of the rule since at
least 2008.” 300 Or. App. at 478 n.6. In 2008, BOLI said it
was “not the employee’s choice whether or not to take the
required breaks.” Id. Rather, “[t]o be in compliance,
[employers] must require [their] employee[s] to take all
mandated breaks.” Id. BOLI’s view confirms that this part
of Maza applies before June 2010.
D. Even so, Plaintiffs’ claims stall because Maza’s
holding that employers must pay for shortened
meal breaks does not apply before June 2010.
In June 2010, BOLI amended its meal break regulation,
adding that “if an employee is not relieved of all duties for
30 continuous minutes during the meal period, the employer
must pay the employee for the entire 30-minute meal
period.” Or. Admin. R. 839-020-0050(2)(b) (2011). This
was not included before. See also Or. Admin. R. 839-020-
0050 (2009). Unless this new provision is superfluous, the
old regulation did not require employers to pay for shortened
meal breaks.
Though Maza required pay for those shortened breaks,
that part of Maza relied on regulatory text added after
Plaintiffs left JITB. Maza held that, “if an employee is not
relieved of all duties for the prescribed minimum 30-minute
meal period, OAR 839-020-0050(2)(b) requires that the
employer pay the employee’s wages for that period of time.”
44 GESSELE V. JACK IN THE BOX INC.
300 Or. App. at 478. But that is the subsection added in
2010. 10
Other cases confirm that employers did not have to pay
for shortened breaks before June 2010. The Oregon Court
of Appeals held that the pre-2010 regulation “requires meal
breaks but not paid meal breaks.” Gafur v. Legacy Good
Samaritan Hosp. & Med. Ctr., 213 Or. App. 343, 348 (2007)
(Gafur I), rev’d in part on other grounds, 344 Or. 525 (2008)
(Gafur II). Here, Plaintiffs conceded that “they were paid
for all of the time they worked when they were called back
to work early[.]” They were only unpaid during their
(shortened) meal breaks. They can only prevail by obtaining
pay for meal breaks, which Gafur I precludes. Indeed,
Plaintiffs never try to distinguish Gafur I.
At least one Oregon trial court reached the same
conclusion. It denied that “the remedy for failing to provide
an uninterrupted 30 minute meal period is to convert an
unpaid meal break into a paid 30 minute meal break.”
Liborio v. Del Monte Fresh Produce N.A., Inc., No. 0710-
11657, 2010 WL 6001799 (Or. Cir. Ct. Sept. 23, 2010).
Instead, “the remedy . . . is recovery of actual time spent”
serving the employer “during the meal period.” Id.
Plaintiffs request the damages Liborio forbids: wages for
time spent on an interrupted meal break. Gafur I and Liborio
both suggest that Oregon courts did not apply § 839-020-
0050(2)(b) before June 2010.
10
Plaintiffs also cite Rother v. Lupenko for the proposition that “Oregon
law . . . entitles employees to receive compensation for breaks of less
than thirty minutes[.]” 515 F. App’x 672, 675 (9th Cir. 2013). But like
Maza, Rother relied on the new part of the regulation.
GESSELE V. JACK IN THE BOX INC. 45
Plaintiffs argue that, even if Oregon courts did not apply
that new rule before 2010, they can exploit the rule because
it applies retroactively. We disagree.
“Statutes or regulations which say nothing about
retroactive application are not applied retroactively if [doing
so] will impair existing rights, create new obligations or
impose additional duties with respect to past transactions.”
Derenco, Inc. v. Benj. Franklin Fed. Sav. & Loan Ass’n, 281
Or. 533, 539 n.7 (1978). But Oregon courts apply
regulations retroactively when “[t]he explanation of the
amended rule . . . shows that the [agency] plainly intended
its clarification of the regulation to apply retroactively.” City
of Salem v. Noble, 45 Or. App. 453, 457 (1980). In Noble,
for example, the agency said that the prior rule “is and has at
all times been unnecessary” and that the rule “needs to be
eliminated in order that a serious prejudice to the public
interest not result[.]” Id.
Here, BOLI never said the new rule would
run retroactively. Plaintiffs do not argue otherwise.
BOLI did say that the new rule “[c]larif[ies] that, for
30 continuous minutes during the meal period must
be paid for the entire 30-minute meal period [sic].”
See 49 Or. Bull. 35 (July 1, 2010),
https://records.sos.state.or.us/ORSOSWebDrawer/RecordV
iew/1201036. Plaintiffs argue BOLI would not have called
this change clarifying unless it was retroactive. We disagree.
Unlike the agency in Noble, BOLI did not say the prior rule
had always been inappropriate, nor did it say the old rule
would prejudice anyone. BOLI’s explanation falls short of
the clear statement Derenco and Noble demand.
Such a statement was necessary. When an agency says
nothing about retroactivity, its rules do not apply
46 GESSELE V. JACK IN THE BOX INC.
retroactively when they create new obligations. See
Derenco, 281 Or. at 539 n.7. This rule created a new
obligation because, before 2010, employers did not have to
pay employees for shortened breaks. Applying this rule
retroactively would subject JITB to new liability for past
events.
Finally, even if the new rule was not retroactive,
Plaintiffs argue that Buero v. Amazon.com Servs., Inc., 61
F.4th 1031 (9th Cir. 2023), supports their claim. Buero held
that “[t]he Oregon legislature derived the definition of
‘employ’ from federal law,” and that “both jurisdictions
define ‘employ’ in terms of ‘work.’” Id. at 1046–47. “[T]he
parallel definitions of ‘employ’ support[ed] a narrower
construction of ‘work time’ that mirrors the federal
understanding of compensable time.” Id. at 1047. Here,
Plaintiffs assert that federal regulations require employers to
pay for shortened meal breaks and conclude that Oregon’s
regulations must do the same.
That argument fails for two reasons. First, Plaintiffs
summarize federal law inaccurately. They cite federal
regulations distinguishing “bona fide meal periods” from
“rest periods.” 29 C.F.R. § 785.19(a). Those regulations
require pay for “rest periods.” Id. § 785.18. But the rest
periods that “must be counted as hours worked” “run[] from
5 minutes to about 20 minutes.” Id. Even if Oregon’s meal
break regulation imported that test, JITB paid employees for
all breaks 20 minutes or less. As a result, Plaintiffs could
not claim unpaid wages. Second, Buero does not suggest
that Oregon’s meal break regulation tracks its federal
analogue. Oregon’s regulation does not define “meal
period” at all, so it did not define that term to match federal
law. Nor does Oregon’s regulation use the same term as the
federal regulation: the former refers to “meal periods” but
GESSELE V. JACK IN THE BOX INC. 47
the latter covers “bona fide meal periods.” Oregon’s “meal
periods” may reach more than those “bona fide meal
periods.” The two regulations do not align enough for
Buero’s logic to work here.
Because JITB did not have to pay for shortened meal
breaks before June 2010, Plaintiffs are caught in a dilemma.
If the proposed class only targets pre-June 2010 violations,
its claims fail. Declining to certify that class was harmless
error at worst. If the proposed class seeks unpaid wages for
post-June 2010 violations, some members might have
claims. But because no named Plaintiff worked for JITB
after June 2010, their “claims . . . [would not be] typical of
the claims . . . of the class,” and they could not represent it.
Fed. R. Civ. P. 23(a)(3). Plaintiffs also cannot represent the
class because, for standing reasons, a plaintiff that “has no
. . . claim . . . cannot represent others who may have such a
claim, and [their] bid to serve as a class representative must
fail.” Lierboe v. State Farm Mut. Auto. Ins. Co., 350 F.3d
1018, 1022 (9th Cir. 2003). Either way, we affirm.
VIII. The district court did not err in granting JITB’s
renewed motion for JMOL on the named
Plaintiffs’ unpaid break claims.
The named Plaintiffs’ individual claims fail for the same
reasons as the pre-June 2010 class claims. The district court
correctly concluded that “before June 1, 2010, Oregon law
did not require employers to pay employees for a 30-minute
meal period when employees were called back to work
before 30 minutes.” JITB employed no named Plaintiff after
June 2010.
Plaintiffs respond that, even if JITB did not violate
Oregon’s meal break regulation, JITB breached its contracts
with them. According to Plaintiffs, the district court erred
48 GESSELE V. JACK IN THE BOX INC.
because it “did not take into account the On-Duty Meal
Policy Agreements that [P]laintiffs entered into as part of
their employment.”
The district court did not err by granting JITB’s motion
for JMOL without considering the On-Duty Meal Policy
Agreements. When opposing JITB’s oral motion, Plaintiffs
never cited those agreements. Even when opposing JITB’s
written, renewed motion, Plaintiffs never cited the
agreements. “It is well established that an appellate court
will not reverse a district court on the basis of a theory that
was not raised below.” Alaska Airlines, Inc. v. United
Airlines, Inc., 948 F.2d 536, 546 n.15 (9th Cir. 1991).
Plaintiffs cannot fault the district court for not analyzing a
theory they never brought up.
In fact, Plaintiffs expressly disclaimed that theory.
Shortly before trial, Plaintiffs told the district court that they
were “not asserting a breach of contract claim for Jack in the
Box’s failure to comply with its own On-Duty Meal Policy
Agreements.” The district court had no reason to address,
and did not err by ignoring, an expressly disclaimed theory.
Plaintiffs respond that they introduced several On-Duty
Meal Policy Agreements at trial. But Plaintiffs told the
district court they would offer the agreements to prove that
JITB knew it had to pay for shortened meal breaks and thus
acted willfully. Because Plaintiffs admitted the agreements
for that limited purpose, the district court had no reason to
construe the agreements to aid another theory.
Plaintiffs also suggest that their breach of contract theory
went to the jury. The district court told the jury that “[i]f a
Plaintiff came back to work voluntarily, including through a
mistaken belief that they had received a full 30 minutes,
there is no violation.” Plaintiffs contend this instruction
GESSELE V. JACK IN THE BOX INC. 49
“exactly matches” the On-Duty Meal Policy Agreements.
Even so, the jury instruction never mentioned the
agreements. The parties tried the unpaid break claims based
on the meal break regulation. Thus, the jury instruction did
not put the jury—or the district court—on notice of a theory
based on the On-Duty Meal Policy Agreements.
Even if Plaintiffs had not said why they were admitting
the agreements, and even if they had a jury instruction on the
breach of contract theory, it would change nothing.
Plaintiffs still failed to raise that theory in their JMOL
oppositions, and they still disclaimed that theory before trial.
We affirm.
IX. The district court erred in granting partial
summary judgment to JITB on its affirmative
defense that the shoe deductions were for its
employees’ benefit.
JITB could only deduct the cost of an employee’s shoes
from their wages if “[t]he deductions [we]re . . . for the
employee’s benefit[.]” Or. Rev. Stat. § 652.610(3)(b). At
summary judgment, the district court “conclude[d] [JITB’s]
shoe deduction” met this test. Plaintiffs raise a few
challenges. Only the last persuades.
Plaintiffs’ first challenge lacks merit: deductions may
benefit employees without being “traditional employee
benefit plans such as health insurance.” Plaintiffs cite no
authority. Instead, they flout their page limits, incorporating
by reference seven pages of briefing given to the district
court. That briefing, however, is not convincing. It relies on
legislative history describing a previous version of what
became § 652.610. In that prior statute, employers could
deduct “for medical, surgical or hospital care or service,” so
50 GESSELE V. JACK IN THE BOX INC.
the legislative history focused on health insurance. The
present statute dropped that limit and became broader.
The district court was also right that employers may
make deductions that do not benefit employees alone.
Another part of the statute let employers deduct wages for
certain loans “made solely for the employee’s benefit.” Or.
Rev. Stat. § 652.610(3)(f)(C) (emphasis added). And a
related statute allowed employers to deduct for certain items
“furnished . . . for the private benefit of the employee.” Or.
Rev. Stat. § 653.035(1) (emphasis added). Because those
limits do not appear here, § 652.610(3)(b) permits some
deductions that benefit both employer and employee.
But § 652.610(3)(b) only shields deductions “for the
ultimate benefit of the employee.” Taylor v. Werner Enters.,
Inc., 329 Or. 461, 470 (1999) (emphasis added). The
“ultimate” benefit is the benefit that “ha[s] more importance
or more influence over what happens than all others.”
Ultimate, Cambridge English Dictionary,
https://dictionary.cambridge.org/us/dictionary/english/ultim
ate (last visited Nov. 16, 2025); see Ultimate,
Dictionary.com, https://www.dictionary.com/browse/ultima
te (last visited Nov. 16, 2025) (“highest; not subsidiary”).
In Taylor, for example, the employer deducted wages for
a “bond,” which it would refund if the employee returned
their ID card and there were no claims against the bond. 329
Or. at 463–64. The trial court found the bond was for the
employee’s benefit, though Taylor did not record what the
benefit was. Id. at 465. Whatever it was, it was not enough.
The Oregon Supreme Court reversed, finding the bond was
not “for the ultimate benefit of the employee” because
“[p]otential liability of an employee to the employer” is “not
a reason that supports a lawful deduction.” Id. at 470. Thus,
GESSELE V. JACK IN THE BOX INC. 51
whether a deduction is “for the benefit” of an employee turns
on the deduction’s ultimate reason.
A reasonable jury could find the reason for the shoe
deduction was not to benefit Plaintiffs. 11 JITB made
employees buy shoes from Shoes for Crews. By choosing
Shoes for Crews, JITB made employees pay $2 more per
shoe—and got $2 per shoe kicked back from Shoes for
Crews. Shoes for Crews also indemnified JITB for the cost
of slip-and-fall accidents. A reasonable jury could find that
Plaintiffs overpaid for shoes so JITB could collect rebates
and indemnities. If so, it could decide the shoe requirement
did not ultimately benefit Plaintiffs.
The district court stretched § 652.610(3)(b) to cover that
requirement, relying on two facts. At summary judgment,
and because JITB bears the burden of proof, 12 those facts did
not justify taking this issue from the jury.
First, Plaintiffs could wear their shoes outside work and
after their employment ended. Perhaps they got some value
for their money. But they might not ultimately benefit. On
the shoes’ value, all the record reveals is that one other
vendor sold non-slip shoes, and it charged $2 less. Nothing
suggests the other shoes were lower quality. 13 One could
reasonably conclude that Plaintiffs did not benefit because
their shoes were worth less than Plaintiffs paid.
11
The district court found JITB had to prove requiring employees to
purchase non-slip shoes benefited them, not just that allowing employees
to pay by wage deduction benefited them. JITB does not challenge this
conclusion, so we assume the district court was right.
12
The district court found this statute creates an affirmative defense, not
an element for Plaintiffs to prove, and no party challenges that.
13
When JITB compared the shoes, it noted no difference in quality.
52 GESSELE V. JACK IN THE BOX INC.
Second, the district court found that the employees got
some kind of discount on the shoes. The district court cited
JITB’s summary-judgment brief, but neither the district
court nor the brief cited record evidence reflecting any
discount. At summary judgment, JITB’s say-so does not
show that Plaintiffs received a discount. Even if Plaintiffs
got a discount, JITB must prove that Plaintiffs benefited
from it, and it cites no evidence about the discount. Without
more, a jury need not infer that the discount was significant.
Also, even if Shoes for Crews charged Plaintiffs less than
others, Plaintiffs presented evidence that Shoes for Crews
overcharged them. If so, Shoes for Crews overcharged
others more, but it still overcharged Plaintiffs.
A reasonable jury could find these two “benefits” were
not the ultimate reasons for the shoe deductions. We reverse
and remand so a jury can decide whether the shoe
requirement was for the employees’ benefit.
X. We remand so the district court can reconsider
whether to certify the shoe class in light of our
decision.
The shoe class, if certified, would have brought two
claims. The result is the same for both claims, but the
reasoning varies somewhat.
A. We remand the § 652.615 shoe class claim because
the district court relied on its erroneous finding
that JITB had proven the shoe deductions
benefitted Plaintiffs.
This claim offers damages if “[a]n employer . . .
withhold[s], deduct[s] or divert[s] any portion of an
employee’s wages[.]” Or. Rev. Stat. § 652.610(3); see Or.
Rev. Stat. § 652.615. However, the employer has a defense
GESSELE V. JACK IN THE BOX INC. 53
if “[t]he deductions are . . . authorized in writing by the
employee” and “are for the employee’s benefit,” among
other things. Or. Rev. Stat. § 652.610(3)(b).
At first, the district court certified a § 652.615 shoe class,
finding that “the interpretation of ‘for the employee’s
benefit’ is one that is common among all class members and
typical of the Shoe Class.” Later, it settled that issue at
summary judgment. Once that issue vanished, the remaining
issue was whether the workers authorized the deduction in
writing. JITB did not keep the written authorizations.
Deciding who authorized the deductions would require
witness testimony. Some people would remember giving
authorization. With that in mind, the district court
decertified the class.
Decertification was proper if the shoe claim requires
enough individual proof. A district court may maintain a
class action only if “the questions of law or fact common to
class members predominate over any questions affecting
only individual members[.]” Fed. R. Civ. P. 23(b)(3).
Because we reverse on the benefit issue, we remand so
the district court may reconsider whether to try this claim
class wide. When the district court certified the class, it
faced both a common issue (whether the deductions were for
the employees’ benefit) and an individual issue (whether the
employees authorized the deductions in writing). When it
decertified the class, only that individual issue remained.
Now that the common issue has returned, the district court
may certify the class again.
But we do not, as Plaintiffs request, order the class
certified.
54 GESSELE V. JACK IN THE BOX INC.
B. We remand the § 653.055 shoe class claim because
the district court erred in holding that written
authorization was a defense to this claim.
This statute penalizes “[a]ny employer who pays an
employee less than the wages to which the employee is
entitled under ORS 653.010 to 653.261[.]” Or. Rev. Stat.
§ 653.055(1). Those statutes require employers to pay
“wages computed at a rate [no] lower than” those specified
by the state. Id. § 653.025(1). They also require employers
to pay overtime at no higher than time and a half. Id.
§ 653.261(1)(a). And they define minimum “wages” so
employers can deduct certain items from them. Id.
§ 653.010(10). As relevant here, “[e]mployers may deduct
from the minimum wage to be paid employees under [the
minimum wage and overtime statutes], the fair market value
of lodging, meals or other facilities or services furnished by
the employer for the private benefit of the employee.” Id.
§ 653.035(1). That defense says nothing about written
authorization. See id.
Elsewhere, Oregon law permits employers to make more
deductions, including some “authorized in writing by the
employee.” Id. § 652.610(3)(b). But that statute says
nothing about the minimum wage or overtime.
Here, the district court “decertifie[d] . . . the shoe class
for employees who had shoe deductions taken that brought
them below minimum wage or required overtime because
. . . whether employees provided written authorization for
shoe deductions requires an individualized inquiry for each
employee[.]” This was error. Whether the deductions were
authorized in writing affects the § 652.615 claim, but not this
one.
GESSELE V. JACK IN THE BOX INC. 55
JITB counters that its § 652.610(3)(b) written
authorization defense applies here. But the language from
that statute does not appear in Or. Rev. Stat. § 653.055,
which governs this claim. JITB responds that the two
statutes expressly cross-reference each other. Not so. Or.
Rev. Stat. § 653.055(1)(b) does permit employees to seek
“civil penalties provided in ORS 652.150.” But § 653.055
never cites Or. Rev. Stat. § 652.610 or § 652.615, which
spawned Plaintiffs’ wrongful deduction claim. The statute
it does cite merely provides penalty wages for willful
violations. Namely, with certain exceptions, “as a penalty
for the nonpayment, the wages or compensation of the
employee shall continue from the due date thereof at the
same hourly rate for eight hours per day until paid or until”
the employee sues. Or. Rev. Stat. § 652.150(1). That statute
does not teleport the (3)(b) defense to wrongful deduction
liability into the minimum wage context.
As a result, Plaintiffs want us to certify a class for this
claim. We decline that request and remand. The district
court can decide whether, after our rulings, this claim should
proceed individually.
XI. The district court erred in overriding the jury
verdict on Plaintiffs’ individual shoe claims.
The last issue controls this one. The jury found the
named Plaintiffs authorized their shoe deductions in writing
but awarded them penalty wages pursuant to Or. Rev. Stat.
§ 653.055 on their shoe claims. The district court found that
“an improper shoe deduction is one that was not authorized
in writing” and that the jury “could award penalty wages to
named Plaintiffs for minimum wage [or] overtime . . .
violations only if they were caused by a . . . improper shoe
deduction.” But for this claim, written authorization is no
56 GESSELE V. JACK IN THE BOX INC.
defense. See supra Section X.B. Even if JITB could deduct
Plaintiffs’ wages for the shoes, it could not count the shoes’
cost towards the minimum wage and overtime, and Plaintiffs
could win their § 653.055 shoe claim.
CONCLUSION
Beginning with the WBF claims, we reverse the partial
summary judgment against JITB and remand for a trial on
willfulness. We affirm on the non-penalty wage WBF issues
but remand so the district court may recalculate prejudgment
interest.
We affirm on the unpaid break claims.
We reverse JITB’s victory on the shoe claims. On
remand, the district court should (1) reconsider whether to
certify a shoe class; (2) retry the shoe claims (on a class or
individual basis) to see if the shoes were for the employees’
benefit; and (3) retry any other issues consistent with our
decision.
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED.
Each side shall bear its own costs on appeal.
Plain English Summary
FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT JESSICA GESSELE; ASHLEY No.
Key Points
01FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT JESSICA GESSELE; ASHLEY No.
02TRICIA TETRAULT; CHRISTINA 3:14-cv-01092- MAULDIN, on behalf of themselves HZ and all others similarly situated, Plaintiffs - Appellees, OPINION v.
03JACK IN THE BOX INC., a Delaware Corporation, Defendant - Appellant.
04TRICIA TETRAULT; CHRISTINA 3:14-cv-01092- MAULDIN, HZ Plaintiffs - Appellants, v.
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FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT JESSICA GESSELE; ASHLEY No.
FlawCheck shows no negative treatment for Gessele v. Jack in the Box Inc. in the current circuit citation data.
This case was decided on November 25, 2025.
Use the citation No. 10742047 and verify it against the official reporter before filing.