IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

JESSICA GESSELE, ASHLEY

ORTIZ, NICOLE GESSELE, TRICIA

TETRAULT, CHRISTINA MAULDIN,

and JASON DIAZ on behalf of

themselves and all others

similarly situated,

Plaintiffs,

v.

JACK IN THE BOX, INC., a

Corporation of Delaware,

Defendant.

3:14-CV-1092-BR

 

OPINION AND ORDER 

JON M. EGAN

240 Sixth Street

Lake Oswego, OR 97034-2931

(503) 697-3427 

Attorney for Plaintiffs

DOUGLAS S. PARKER

JENNIFER NETH WARBERG 

DON STAIT

Littler Mendelson, P.C.

121 S.W. Morrison Street

Suite 900

Portland, OR 97204

(503) 221-0309 

Attorneys for Defendant

1 - OPINION AND ORDER

Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 1 of 57
BROWN, Judge.

This matter comes before the Court on Defendant Jack in the

Box, Inc.’s Motion (#95) for Partial Summary Judgment. For the

reasons that follow, the Court GRANTS in part and DENIES in part

Defendant’s Motion.

BACKGROUND

Plaintiffs were employed by Defendant Jack in the Box, Inc.,

in its Oregon restaurants at various times. Plaintiffs received

their final paychecks from Defendant on the following dates:

Tricia Tetrault: July 11, 2008

Ashley Ortiz: December 26, 2008

Nicole Gessele: March 20, 2009

Jessica Gessele: November 23, 2009

Christina Mauldin: March 30, 2010

Jason Diaz: March 30, 2010

On March 29, 2010, Jack in the Box “franchised” several

corporate-owned Jack in the Box restaurants (including the

restaurant at which Mauldin and Diaz were employed) to franchisee

Northwest Group, Inc. (NWG).

On August 13, 2010, Jessica Gessele, Ashley Ortiz, Nicole

Gessele, and Tricia Tetrault, on behalf of all those similarly

situated, filed a putative class-action Complaint (Gessele I)1

 in

this Court against Jack in the Box for violation of the minimumwage and overtime provisions of the Fair Labor Standards Act

1

 In Gessele I Ashley Ortiz proceeded as Ashley Gessele and

Christina Mauldin proceeded as Christina Luchau.

2 - OPINION AND ORDER

Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 2 of 57
(FLSA), 29 U.S.C. § 201, et seq., and various Oregon wage-andhour laws. Gessele I was assigned to Magistrate Judge Janice M.

Stewart. 

On January 4, 2011, Jason Diaz filed a Complaint in this

Court against Jack in the Box and three of its franchisees: NWG;

PSNW Enterprises, LLC; and VR, Inc. (Diaz I) in which he alleged

claims for violation of the minimum-wage and overtime provisions

of the FLSA and Oregon wage-and-hour statutes, unpaid wages on

termination in violation of Oregon statutes, wrongful deductions

in violation of Oregon Revised Statute § 652.610, wrongful method

of payment in violation of Oregon Revised Statute § 652.110, and

use of an unregistered business name in violation of Oregon

Revised Statute § 648.007. Diaz I was assigned to Senior

District Judge Robert E. Jones.

On May 5, 2011, Judge Jones issued an opinion and order in

Diaz I in which he granted the franchise defendants’ motion to

compel arbitration of Diaz’s claims on the ground that Diaz’s

claims against those defendants were encompassed by an

arbitration agreement that Diaz entered into on March 29, 2010,

when his employment transferred to franchisee NWG.

On May 16, 2011, Jessica Gessele, Ashley Ortiz, Nicole

Gessele, and Tricia Tetrault filed a First Amended Complaint in

Gessele I in which they added Christina Mauldin as a named

Plaintiff.

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On May 30, 2011, Diaz filed an Amended Complaint in Diaz I

in which he alleged claims only against Jack in the Box for

violation of the minimum-wage and overtime provisions of the FLSA

and Oregon wage-and-hour statutes, unpaid wages on termination in

violation of Oregon statutes, wrongful deductions in violation of

Oregon Revised Statute § 652.610, and wrongful method of payment

in violation of Oregon Revised Statute § 652.110.

On July 6, 2011, Diaz filed in Diaz I an unopposed Motion to

Dismiss his claims without prejudice. On July 8, 2011, Judge

Jones entered an Order granting the Motion to Dismiss and a

Judgment dismissing Diaz I without prejudice.

On March 20, 2012, Jessica Gessele, Ashley Ortiz, Nicole

Gessele, Tricia Tetrault, and Christina Mauldin filed a Second

Amended Complaint in Gessele I in which they alleged Defendant

(1) failed to pay minimum wages in violation of the FLSA, 

(2) failed to pay overtime wages in violation of the FLSA, 

(3) failed to pay minimum wages in violation of Oregon Revised

Statute § 653.025, (4) failed to pay overtime wages in violation

of Oregon Revised Statute § 653.261, (5) failed to pay all wages

due after termination of Plaintiffs' employment in violation of

Oregon Revised Statute § 652.140, (6) deducted unauthorized

amounts from Plaintiffs' paychecks in violation of Oregon Revised

Statute § 652.610, and (7) failed to pay all wages when due as

required by Oregon Revised Statute § 652.120. 

4 - OPINION AND ORDER

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On December 13, 2012, Jessica Gessele, Ashley Ortiz, Nicole

Gessele, Tricia Tetrault, and Christina Mauldin filed a Motion

for Leave to File Third Amended Complaint in Gessele I. On

January 7, 2013, Magistrate Judge Stewart denied the Motion on

the grounds of undue delay and prejudice.

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

On November 5, 2013, Jason Diaz filed a Consent to Join Law

Suit in Gessele I. Diaz, however, did not become a named

Plaintiff in Gessele I.

On March 19, 2014, this Court issued an Opinion and Order in

Gessele I in which it granted Defendant’s Motion for Summary

Judgment on the ground that Jessica Gessele, Ashley Ortiz, Nicole

Gessele, Tricia Tetrault, and Christina Mauldin were required to

file written consents with the Court to commence their FLSA

collective action, but they failed to file those written consent

forms timely.2 The Court, therefore, concluded it never acquired

jurisdiction over the FLSA claims of Jessica Gessele, Ashley

Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin,

and, as a result, the Court could not exercise supplemental

jurisdiction over their state-law claims. The Court also

concluded Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia

Tetrault, and Christina Mauldin did not file written consents

2 Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia

Tetrault, and Christina Mauldin did not file purported FLSA

consent forms until September 27, 2013.

5 - OPINION AND ORDER

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within the applicable limitations period; neither equitable

tolling nor equitable estoppel applied; and, therefore, their

FLSA claims were barred by the applicable statute of limitations. 

The Court dismissed the FLSA claims of Jessica Gessele, Ashley

Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin

with prejudice and dismissed their state-law claims without

prejudice.

On April 16, 2014, Jessica Gessele, Ashley Ortiz, Nicole

Gessele, Tricia Tetrault, and Christina Mauldin filed in Gessele

I an unopposed Motion to Amend/Correct in which they moved the

Court to amend its March 19, 2014, Opinion and Order to dismiss

their FLSA claims without prejudice on the ground that the Court

lacked jurisdiction over those claims.

On May 15, 2014, the Court granted the Motion to

Amend/Correct in Gessele I and issued an Amended Opinion and

Order in which it granted Defendant’s Motion for Summary Judgment

on the ground that Jessica Gessele, Ashley Ortiz, Nicole Gessele,

Tricia Tetrault, and Christina Mauldin failed to timely file

written consent forms as required by the FLSA. The Court,

therefore, never acquired jurisdiction over Jessica Gessele,

Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina

Mauldin’s FLSA claims, and, as a result, the Court could not

exercise supplemental jurisdiction over their state-law claims. 

Accordingly, on May 15, 2014, the Court entered a Judgment

6 - OPINION AND ORDER

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dismissing the entire matter without prejudice.

On June 10, 2014, Jessica Gessele, Ashley Ortiz, Nicole

Gessele, Tricia Tetrault, Christina Mauldin, and Jason Diaz filed

a putative class action against Jack in the Box in Multnomah

County Circuit Court (Gessele II) in which they alleged claims

for violation of Oregon’s wage-and-hour laws, violation of the

FLSA, breach of fiduciary duty, and equitable and quasicontractual claims for return of money.

On July 9, 2014, Defendant removed Gessele II to this Court

on the grounds of federal-question jurisdiction based on

Plaintiffs’ FLSA claims and/or jurisdiction under the Class

Action Fairness Act (CAFA), 28 U.S.C. § 1332(d)(2).

On August 8, 2014, Plaintiffs filed a Motion to Remand Case

to State Court on the grounds that (1) issue preclusion/

collateral estoppel barred litigation of Gessele II in this

Court; (2) if issue preclusion did not bar litigation, the “law

of the case” barred litigation in this Court; and (3) judicial

estoppel barred litigation of Gessele II in this Court even if

neither issue preclusion nor law of the case barred such

litigation. 

On October 17, 2014, the Court entered an Opinion and Order

in Gessele II in which it granted in part and denied in part

Plaintiffs’ Motion to Remand. The Court concluded (1) although

issue preclusion barred relitigation as to whether the Court had

7 - OPINION AND ORDER

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jurisdiction to hear the FLSA claims of Jessica Gessele, Ashley

Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin, it

did not bar litigation of Diaz’s FLSA claims against Defendant

brought for the first time in Gessele II; (2) relitigation of

this Court’s jurisdiction was not barred by the law of the case;

(3) because Diaz was never a named Plaintiff in Gessele I, the

Court’s decision regarding its jurisdiction over that matter did

not apply to Diaz, and, therefore, judicial estoppel did not

apply nor require remand of Diaz’s FLSA claims; (4) judicial

estoppel applied to and estopped Defendant from relitigating the

issue of this Court’s lack of jurisdiction over the FLSA claims

of Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia

Tetrault, and Christina Mauldin; and (5) Defendant did not waive

its right to remove Gessele II by pursuing dismissal in Gessele I

on jurisdictional grounds.

On October 29, 2014, Defendant moved for a stay of Gessele

II pending the outcome of Defendant’s appeal of the Court’s

October 17, 2014, Opinion and Order, which Defendant intended to

file in the Ninth Circuit.

On November 6, 2014, the Court granted Defendant’s Motion

for Stay.

On June 11, 2015, the Ninth Circuit issued a Mandate in

which it reversed in part and remanded the matter to this Court

for further proceedings. Specifically, the Ninth Circuit held 

8 - OPINION AND ORDER

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(1) Defendant is precluded from relitigating “the jurisdictional

issues” in Gessele I by the doctrine of issue preclusion; 

(2) because Gessele I did not address the timeliness of the new

FLSA claims asserted in Gessele II nor jurisdiction under CAFA,

Defendant “is not precluded from invoking federal jurisdiction”

in Gessele II; (3) Defendant’s position in Gessele I that the

Court lacked jurisdiction over the FLSA claims asserted in that

matter “is not inconsistent with [Defendant’s] . . . [assertion

in Gessele II that] there is no time bar to the newly asserted

FLSA claims, or that the district court has CAFA jurisdiction

over the state-law claims”; and (4) Defendant did not waive its

right to remove Gessele II “through its filings in the state

court or its prior conduct in this litigation.”

On August 31, 2015, Defendant filed in Gessele II a Motion

for Partial Summary Judgment; Plaintiffs filed a Motion for

Partial Summary Judgment (Statute of Limitations) and to

Establish Tolling for FLSA Collective Members; and Plaintiffs

filed a Motion for Partial Summary Judgment on Jack in the Box's

8th (Private Right Of Action), 9th (Due Process) and 12th

(Preemption) Affirmative Defenses. The Court took the Motions

under advisement on October 5, 2015. 

On December 22, 2015, the Court issued an Order in which it

denied as premature (1) those portions of Defendant's Motion for

Partial Summary Judgment and Plaintiffs’ Motion for Partial

9 - OPINION AND ORDER

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Summary Judgment (Statute of Limitations) relating to whether the

California putative class members are subject to binding

settlements in two California state cases; (2) those portions of

Defendant's Motion for Partial Summary Judgment and Plaintiffs’

Motion for Partial Summary Judgment (Statute of Limitations)

relating to Defendant's status as a joint employer; and 

(3) Plaintiffs' Motion for Partial Summary Judgment on Jack in

the Box's 8th (Private Right Of Action), 9th (Due Process) and 12th

(Preemption) Affirmative Defenses as to Defendant's Ninth

Affirmative Defense. The Court granted the parties leave to

renew those Motions after limited discovery and after the Court

issued its Opinion and Order on the remaining portions of the

pending Motions.

On February 16, 2016, the Court heard oral argument on those

portions of the pending Motions for Partial Summary Judgment that

it did not address in its December 22, 2015, Opinion and Order.

On March 10, 2016, the Court issued an Opinion and Order in

which it granted Defendant’s Motion for Partial Summary Judgment;

denied Plaintiffs’ Motion for Partial Summary Judgment (Statute

of Limitations) and to Establish Tolling; and granted in part and

denied in part Plaintiff's Motion for Partial Summary Judgment on

Jack in the Box's 8th (Private Right Of Action), 9th (Due Process)

and 12th (Preemption) Affirmative Defenses. Specifically, the

Court (1) granted Plaintiffs’ Motion for Partial Summary Judgment

10 - OPINION AND ORDER

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as to Defendant’s Eighth Affirmative Defense and dismissed that

Defense with prejudice; (2) granted Plaintiffs’ Motion for

Partial Summary Judgment as to Defendant’s Twelfth Affirmative

Defense as to those portions of Plaintiffs’ Seventh and Eighth

Claims that are preempted by the FLSA or Oregon’s wage-and-hour

laws as set out in the March 10, 2016, Opinion and Order; and 

(3) denied in part Plaintiffs’ Motion for Partial Summary

Judgment as to Defendant’s Twelfth Affirmative Defense as to

those portions of Plaintiff’s Seventh and Eighth Claims that are

not preempted by the FLSA or Oregon’s wage-and-hour laws as set

out in the March 10, 2016, Opinion and Order. In summary, the

Court’s rulings had the following effect:

(1) This matter would go forward as to named Plaintiffs'

state wage-and-hour claims; Jason Diaz's FLSA claims;

and named Plaintiffs' FLSA claims from March 29, 2010,

to the present.

(2) There were not any motions pending for certification of

a class or collective action or any motions pending as

to Defendant's status as a joint employer, as to the

effect of the California settlement, or as to whether

Diaz's FLSA claims are subject to mandatory

arbitration. 

On March 24, 2016, the parties filed a Joint Statement in

which they agreed the following claims remain in this matter:

11 - OPINION AND ORDER

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(1) Plaintiffs' state wage-and-hour claims; (2) Plaintiffs'

Seventh and Eighth Claims to the extent that they do not overlap

with state or federal statutory claims; (3) Diaz's FLSA claims;

and (4) Plaintiffs' FLSA claims from March 29, 2010, to the

present.

On July 7, 2016, the Court issued an Order in which it

granted Defendant leave to file dispositive motions as to:

(1) All FLSA claims from March 29, 2010, to the present on

the ground that Defendant is not a joint employer of

franchisee employees;

(2) All FLSA claims asserted by Jason Diaz on the

ground that Diaz failed to file a written consent under

the FLSA; 

(3) All of Diaz's state and federal claims on the grounds

that (a) he is required to arbitrate those claims and

(b) Diaz failed to pursue his claims in arbitration

after his individual lawsuit (3:11-cv-0006-JO) was

dismissed; and

(4) All FLSA claims of any California putative class

members subject to the class settlements in the

Frederick and Olvera cases.

On September 1, 2016, Defendant filed a Motion for Partial

Summary Judgment permitted by the Court in its July 7, 2016,

Order. The Court took Defendant’s Motion under advisement on

12 - OPINION AND ORDER

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October 12, 2016.

STANDARDS

Summary judgment is appropriate when “there is no genuine

dispute as to any material fact and the movant is entitled to

judgment as a matter of law.” Washington Mut. Ins. v. United

States, 636 F.3d 1207, 1216 (9th Cir. 2011). See also Fed. R.

Civ. P. 56(a). The moving party must show the absence of a

dispute as to a material fact. Rivera v. Philip Morris, Inc.,

395 F.3d 1142, 1146 (9th Cir. 2005). In response to a properly

supported motion for summary judgment, the nonmoving party must

go beyond the pleadings and show there is a genuine dispute as to

a material fact for trial. Id. "This burden is not a light one

. . . . The non-moving party must do more than show there is

some 'metaphysical doubt' as to the material facts at issue." In

re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010)

(citation omitted). 

A dispute as to a material fact is genuine "if the evidence

is such that a reasonable jury could return a verdict for the

nonmoving party." Villiarimo v. Aloha Island Air, Inc., 281 F.3d

1054, 1061 (9th Cir. 2002)(quoting Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986)). The court must draw all

reasonable inferences in favor of the nonmoving party. Sluimer

v. Verity, Inc., 606 F.3d 584, 587 (9th Cir. 2010). "Summary

13 - OPINION AND ORDER

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judgment cannot be granted where contrary inferences may be drawn

from the evidence as to material issues." Easter v. Am. W. Fin.,

381 F.3d 948, 957 (9th Cir. 2004)(citation omitted). A “mere

disagreement or bald assertion” that a genuine dispute as to a

material fact exists “will not preclude the grant of summary

judgment.” Deering v. Lassen Cmty. Coll. Dist., No. 2:07-CV1521-JAM-DAD, 2011 WL 202797, at *2 (E.D. Cal., Jan. 20, 2011)

(citing Harper v. Wallingford, 877 F.2d 728, 731 (9th Cir.

1989)). When the nonmoving party's claims are factually

implausible, that party must "come forward with more persuasive

evidence than otherwise would be necessary." LVRC Holdings LLC

v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009)(citation omitted). 

The substantive law governing a claim or a defense

determines whether a fact is material. Miller v. Glenn Miller

Prod., Inc., 454 F.3d 975, 987 (9th Cir. 2006). If the

resolution of a factual dispute would not affect the outcome of

the claim, the court may grant summary judgment. Id.

DISCUSSION

Defendant moves for partial summary judgment as to (1) all

of Plaintiffs’ FLSA claims from March 29, 2010, to the present on

the ground that Defendant was not Plaintiffs’ joint employer

during that period; (2) all of Plaintiff Jason Diaz's state and

federal claims on the ground that he is required to arbitrate

14 - OPINION AND ORDER

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those claims; (3) in the alternative, Diaz’s FLSA claims on the

ground that Diaz failed to file a timely written consent as

required by the FLSA; and (4) all FLSA claims of any California

putative collective-action members because they are subject to

the settlements in the cases of Frederick v. Jack-In-The-Box,

Inc., No. RIC50144, and Olvera v. Jack In The Box, Inc.,

No. 37-2013-00072707.

Plaintiffs, in turn, assert Defendant was Plaintiffs’ joint

employer after March 29, 2010; Diaz is not required to arbitrate

his state or federal claims; Diaz filed a timely written consent

as required by the FLSA; and the FLSA claims of any California

putative collective-action members are not subject to the

settlements in the Frederick and Olvera cases.

I. Defendant was not Plaintiffs’ joint employer on or after

March 29, 2010.

As noted, Defendant moves for summary judgment as to all of

Plaintiffs’ FLSA claims from March 29, 2010, to the present on

the ground that Defendant was not Plaintiffs’ joint employer on

or after March 29, 2010, at which time Defendant “franchised”

several corporate-owned Jack in the Box restaurants (including

the restaurant at which Jessica Gessele, Mauldin, and Diaz were

employed) to franchisee Northwest Group, Inc. (NWG).3

3 Defendant asserts and Plaintiffs do not dispute “[n]o

named plaintiff has worked at a restaurant operated by any . . .

franchisee” other than NWG.

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Plaintiffs assert the FLSA defines the employment

relationship in expansive terms that should lead the Court to

conclude Defendant was Plaintiffs’ employer during the relevant

period.

A. Joint-Employer Test

The FLSA defines an “employer” to include “any person

acting directly or indirectly in the interest of an employer in

relation to an employee and includes a public agency.” 29 U.S.C.

§ 203(d). The Ninth Circuit has held “two or more employers may

jointly employ someone for purposes of the FLSA.” Bonnette v.

Cal. Health and Welfare Agency, 704 F.2d 1465, 1469 (9th Cir.

1983). See also E.E.O.C. v. Pac. Mar. Ass’n, 351 F.3d 1270, 1275

(9th Cir. 2003)(same). All joint employers are individually

liable for FLSA violations. 29 C.F.R. § 791.2(a).

“Whether an entity is a ‘joint employer’ under the FLSA

is a question of law.” Torres-Lopez v. May, 111 F.3d 633, 638

(9th Cir. 1997)(citing Bonnette, 704 F.2d at 1469).

 “[B]efore a person or entity can be a joint employer,

it must possess the attributes of an employer to some degree.” 

Courtland v. GCEP-Surprise, LLC, No. CV-12-00349-PHX-GMS, 2013 WL

3894981, at *2 (D. Ariz. July 29, 2013)(quotation omitted). The

Ninth Circuit applies an “economic reality” test to determine the

existence of a joint employment relationship. Courtland, 2013 WL

3894981, at *2 (citing Torres-Lopez, 111 F.3d at 639). The Ninth

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Circuit has made clear that the Court must consider “[a]ll

factors relevant to the particular situation” (Moreau v. Air Fr.,

356 F.3d 942, 947 (9th Cir. 2004)), and base its ultimate

determination on “the circumstances of the whole activity.” 

Bonnette, 704 F.2d at 1470. 

In Bonnette the Ninth Circuit held the test focuses

primarily on four factors: “whether the alleged employer (1) had

the power to hire and fire the employees; (2) supervised and

controlled employee work schedules or conditions of employment;

(3) determined the rate and method of payment; and (4) maintained

employment records.” 704 F.2d at 1470. Later in Torres-Lopez

the Ninth Circuit identified five “regulatory factors” similar to

those set out in Bonnette that courts should consider:

(A) The nature and degree of control of the

workers;

(B) The degree of supervision, direct or indirect,

of the work;

(C) The power to determine the pay rates or the

methods of payment of the workers;

(D) The right, directly or indirectly, to hire,

fire, or modify the employment conditions of the

workers; [and]

(E) Preparation of payroll and payment of wages.

111 F.3d at 646 (citing 29 C.F.R. § 500.20(h)(4)(ii)). The Ninth

Circuit also identified a number of “nonregulatory” factors for

courts to consider when they are applicable:

(1) The degree of the alleged employer's right to

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control the manner in which the work is to be

performed;

(2) The alleged employee's opportunity for profit

or loss depending upon the alleged employee's

managerial skill;

(3) The alleged employee's investment in equipment

or materials required for the alleged employee's

task, or the employee's employment of helpers;

(4) Whether the service rendered requires a

special skill;

(5) The degree of permanence of the working

relationship;

(6) Whether the service rendered is an integral

part of the alleged employer's business;

(7) Ownership of property or facilities where work

occurred; and

(8) Whether responsibility under the contracts

between a labor contractor and an employer passes

from one labor contractor to another without

material changes.

Id. (citations omitted). Courts have made clear that not all of

the nonregulatory factors set out in Torres-Lopez are applicable

to the joint-employer analysis in every case, and courts need

consider only those factors that are relevant. See, e.g., Zhao

v. Bebe Stores, Inc., 247 F. Supp. 2d 1154, 1159-60 (C.D. Cal.

2003)(considering only those Torres-Lopez nonregulatory factors

relevant to the case).

B. Parties’ Positions as to the Bonnette Factors

As noted, under Bonnette the Court should consider

whether Defendant (1) had the power to hire and to fire the

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employees, (2) supervised and controlled employee work schedules

or conditions of employment, (3) determined the rate and method

of payment, or (4) maintained employment records. 

1. Power to Hire and to Fire Franchise Employees

Defendant asserts it does not have the power to

hire or to fire franchise employees pursuant to the terms of the

Franchise Agreement it entered into with NWG and under

Defendant’s actual business practices. The Franchise Agreement

specifically provides:

Franchisee is an independent contractor and shall

not be deemed an agent partner joint venture or

employee of [Defendant]; and no fiduciary

relationship between the parties exists. 

Franchisee shall have no right to bind or obligate

[Defendant] in any way, and shall in no way

represent any right to do so. [Defendant] shall

have no control over the terms and conditions of

employment of Franchisee’s employees.

Decl. (#30) of Connie Rand, Ex. A at ¶ 3(F)(emphasis added). In

addition, Connie Rand, Vice President of Defendant’s Legal

Department, testifies in her Declaration that when Defendant

franchises a restaurant 

6. [It] does not control the terms and

conditions of employment of the franchisee

employees. The franchise is exclusively

responsible for the terms of employment,

compensation, and all aspects of the

employment relationship.

7. The franchisee handles all aspects of daily

operations, including assignment of duties,

supervision, training, coaching and

discipline of employees.

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8. The franchisee determines who to hire into

what position at the restaurant. The

franchisee decides which employees to

schedule to work, what days and times to

schedule them, when the employees will take

breaks, and the total number of hours the

employees will be scheduled to work each

week. Jack in the Box has no input, control

or direction over schedules, hours, or hiring

decisions.

* * *

12. Jack in the Box does not provide any employee

benefits to franchisee employees. 

13. The franchisee is solely responsible for

payments associated with workers’

compensation benefits and unemployment.

Rand Decl. at ¶¶ 6-8, 12-13. Raymund Baluyut, the designated

“franchise operator” for NWG from March 2010 through November

2011, testified at deposition that when NWG purchased the Oregon

franchise restaurants from Defendant, Baluyut made the decisions

about who to hire, who not to offer employment to, and which

positions at Defendant’s corporate restaurants that NWG would not

fill at its franchise restaurants. Decl. of Jennifer N. Warberg,

Ex. F at 8-9, 35. After the initial hiring period, NWG

restaurant managers made hiring and promotion decisions. Id. at

16-17. Plaintiffs concede Defendant “did not directly decide who

to hire and fire,” but Plaintiffs assert Defendant imposed “very

specific requirements on who the . . . franchisees were allowed

to hire and how.” For example, although the Franchise Agreement

provides the franchisees “shall hire all employees of the

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Franchised Restaurant, and be fully responsible for the terms of

their employment,” it also requires franchisees to have at least

one Certified Franchise Restaurant Manager at each restaurant. 

Decl. of Jon Egan, Ex. 3 at 13. Plaintiffs also point out that

the Franchise Agreement prohibits franchisees from inducing

employees at other franchise locations “to leave such employment”

and from hiring an individual who was employed at another

franchise location within six months of the termination of his

employment at that location. Egan Decl., Ex. 3 at 15. 

According to Plaintiffs, franchisees were required to

follow Defendant’s “Hiring the Right People” process and

Defendant’s handbook that includes Consistent Hiring Process

Guidelines. Plaintiffs, however, do not point to any evidence in

the record that supports their assertion. Defendant, in

contrast, points to Baluyut’s deposition in which he testified

franchisees were not required to use Defendant’s “Hiring the

Right People” process or Defendant’s Consistent Hiring Process

Guidelines and that Defendant only provided these materials to

franchisees as tools to which they could refer. Warberg Decl.,

Ex. F at 31-32.

2. Supervision and Control of Franchise Employee Work

Schedules and/or Conditions of Employment

Defendant asserts it does not supervise and

control franchisee employee work schedules or conditions of

employment. Defendant notes under the terms of the Franchise

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 21 of 57
Agreement and in practice, franchisees are exclusively

responsible for their terms of employment, compensation and

training. For example, as noted, the Franchise Agreement

provides:

The franchisee determines who to hire into what

position at the restaurant. The franchisee

decides which employees to schedule to work, what

days and times to schedule them, when the

employees will take breaks, and the total number

of hours the employees will be scheduled to work

each week. Jack in the Box has no input, control

or direction over schedules, hours, or hiring

decisions.

* * *

Franchisee shall hire all employees of the

Franchised Restaurant, be exclusively responsible

for the terms of their employment, compensation

and training.

Rand Decl., Ex. A at 8, 12. Rand testifies in her Declaration

that “[t]he franchisee handles all aspects of daily operations,

including assignment of duties, supervision, training, coaching

and discipline of employees”; Defendant “does not control or

direct employee handbooks or employment related policies for

franchise operators[; and Defendant] does not provide employee

handbooks to franchise operators.” Rand Decl. at ¶¶ 7, 10. In

addition, franchisees 

decide[] which employees to schedule to work, what

days and times to schedule them when the employees

will take breaks, and the total number of hours

the employees will be scheduled to work each week.

Jack in the Box has no input, control or direction

over schedules, hours, or hiring decisions.

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 22 of 57
[Defendant] does not maintain personnel records of

franchise employees.

Rand Decl. ¶¶ 8-9. Defendant notes its labor-scheduling software

is an option for franchisees to use, but they are not required to

do so and, in fact, some franchisees choose to hand-write work

schedules. Warberg Decl., Ex. F at 19-20.

Mauldin testified at deposition that when she was

a team leader at the restaurant after it had been franchised to

NWG, she was responsible for supervising crew members, ensuring

they took breaks, assigning tasks, making sure employees counted

their tills, and “making sure the store ran smoothly.” Warberg

Decl., Ex. G at 2-3. Similarly, Diaz testified at deposition

that after the restaurant at which he worked was franchised to

NWG, he was “responsible for the employees on the shift,”

including scheduling, when he was the person in charge. Warberg

Decl., Ex. I at 14, 19. Jessica Gessele testified at deposition

that after the restaurant she worked at was franchised to NWG,

the shift leader at her restaurant assigned her tasks and set

work and break schedules and a manager was in charge of

scheduling employees. Warberg Decl., Ex. H at 6-8.

Baluyut testified at deposition that after NWG

purchased Defendant’s franchise restaurants, its Human Resources

Manager independently developed personnel policies and hiring

forms to be used in the franchised restaurants. Warberg Decl.,

Ex. F at 39-40. Defendant provides training on new products and

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 23 of 57
equipment to franchise operators, who, in turn, determine how

their franchise employees will be trained. Warberg Decl., Ex. E

at 4-5. Jeffrey Tennant, Defendant’s Franchise Business

Consultant, testified at deposition that Defendant does not track

franchise company training, and Defendant's “only concern” is

that each of the franchisees has a certified restaurant manager

and someone certified in food safety on shift. Warberg Decl.,

Ex. E at 15-18. Tennant testified franchisees may access

Defendant’s training tools, but they are not required to use

those training tools. Id. at 6-8.

Although Plaintiffs concede in their Response that

Defendant did not directly supervise employee work schedules or

conditions of employment, Plaintiffs, nevertheless, assert

Defendant controlled those things by imposing “mandatory

requirements and protocols for franchisee restaurant managers to

follow.” For example, Plaintiffs contend Defendant has a

“mandatory scheduling system,” which includes an algorithm “that

gives warning when labor costs exceed [sic] percentage of sales.” 

In support of their contention Plaintiffs cite Defendant’s 

26-page 20/20 Handbook generally. Plaintiffs also assert the

20/20 Handbook “includes Well-Staffed requirements of workstation

positioning and daily planner tools with requirements for sales

forecasting and scheduling (including how many to schedule for

each period)” even though Plaintiffs do not identify with

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 24 of 57
specificity where in the 26-page Handbook these requirements are

located. 

After reviewing the 20/20 Handbook, the Court

notes it includes “guidelines” for “effective staffing &

planning,” but it does not indicate such guidelines are

mandatory. Moreover, both Baluyut and Tennant testified at

deposition that the scheduling software was optional for

franchisees to use, but Defendant did not track or control

franchise employee staffing. Suppl. Decl. of Jennifer Warberg,

Ex. M at 2-3; Ex. O at 2-3. 

3. Rate and Method of Payment of Franchise Employees 

Defendant asserts it does not determine the rate

or method of payment of franchise employees. Wendy Sanderlin,

Defendant’s Vice President-Assistant Controller-Account

Operations, testifies in her Declaration that Defendant “does not

participate in the determination of franchisee employee hourly

rates, pay periods, or the manner in which a franchisee

operator’s employees are paid.” Decl. of Wendy Sanderlin at ¶ 4. 

In addition, franchisees “decide[] what hourly rate to pay

[their] employees, and when they will be paid,” and they are

“solely responsible for all wage payments, employee withholdings,

and employer taxes.” Id. at ¶¶ 5-6.

Sanderlin testifies in her Declaration that

Defendant “does not control any aspect of franchisee payroll

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 25 of 57
processing.” Sanderlin Decl. at ¶ 2. Similarly, Baluyut

testified at deposition that NWG had a third-party payroll

provider when he was a franchise operator, and NWG also

determined franchisor’s pay period and employees’ rates of pay. 

Warberg Decl., Ex. F at 10, 45-46. Tennant also testified at

deposition that Defendant does not provide a payroll system for

franchisees and that franchisees “use their own separate

payroll.” Warberg Decl., Ex. E at 19-20.

In addition, NWG chose not to provide certain

benefits to franchise employees that they had received when the

restaurants were owned by Defendant. For example, Mauldin

testified at deposition that when she worked for Defendant

directly, she received medical and dental insurance and was

eligible for participation in a 401(k). Warberg Decl., Ex. G at

56. When NWG took over the restaurant, however, employees did

not have the option of medical or dental insurance or

participation in a 401(k). Id. Jessica Gessele and Diaz

testified they had been entitled to “fringe benefits” such as

insurance when the restaurants they worked at were owned by

Defendant, but they were not offered those benefits after NWG

bought the franchise for the restaurants. Warberg Decl., Ex. H

at 34; Ex. I at 72.

Plaintiffs concede Defendant did not directly

determine franchise employees’ rates of pay, but “it did have a

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 26 of 57
hand in determining the amount and method of their pay.” 

Specifically, Plaintiffs contend Defendant required franchisees

to use its time-tracking software and hardware, which calculated

the hours that franchise employees worked and transmitted that

figure to the franchisee for use in payroll. In fact, Plaintiffs

assert it is Defendant’s time-tracking program that caused the

FLSA violations alleged in this matter. Specifically, Plaintiffs

contend the time-tracking software is configured in such a way

that employees who take a break of more than 20 minutes but less

than 30 minutes are not paid for that break, which, Plaintiffs

assert, violates the FLSA.

4. Maintenance of Franchise Employment Records

As to the final Bonnette factor, Defendant asserts

it does not maintain franchisee employment records. Baluyut

testified NWG kept its employees’ personnel records in filing

cabinets in NWG’s corporate office in Tigard, Oregon, when

Baluyut was a franchise operator. Warberg Decl., Ex. F at 25. 

In fact, Defendant points out that NWG, in response to

Plaintiffs’ subpoena, produced the personnel records for the

named Plaintiffs who it employed in its franchise restaurants.

Plaintiffs, however, assert Defendant maintains

franchise employee personnel records because a franchise employee

must enter his or her name, Social Security number, ethnicity,

gender, date of birth, telephone number, address, emergency

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 27 of 57
contact information, and driver’s license information in order to

gain access to Defendant’s time-tracking software.

Defendant, in turn, assets franchise employees

enter basic identifying information into the time-keeping system

when they are hired so that they may access the training modules

and use the time-keeping system. Defendant notes, however, that

“many elements” of the data-entry process are optional and

selected by the franchisee such as ethnicity, gender, etc. 

Defendant also notes it does not review or audit franchise

employee information or time-clock punches. Instead, such

information is exported and stored on a “secure FTP site” for

franchisees or their payroll processors to retrieve and to use in

processing their payrolls.

C. Evaluation of the Bonnette factors

 Courts in the Ninth Circuit have evaluated

franchisor/franchisee relationships similar to the one here and 

have concluded such circumstances do not satisfy either the

Bonnette or Torres-Lopez factors when viewed as a whole. For

example, in Singh v. 7-Eleven, Inc., the defendant owned and

operated retail food stores under the trademark name 7-Eleven. 

No. C-05-04534 RMW, 2007 WL 715488, at *1 (C.D. Cal. Mar. 8,

2007). In 1999 Cindy Duong purchased a 7-Eleven franchise store

pursuant to a written franchise agreement. Pursuant to the

agreement Duong and the defendant shared the profits from the

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 28 of 57
store. Every month the defendant provided Duong with a financial

statement that showed gross sales less the cost of merchandise. 

The defendant paid the lease on the building that housed the

store in addition to the water bill and the electric bill. The

difference between the gross sales and these expenses was split

between the defendant and Duong. Id. “Then the monthly expenses

such as payroll, payroll tax, EDD insurance, trash, telephone,

maintenance, and miscellaneous expenses [were] deducted from

Duong's share of the gross profit.” Id. The remaining net

profit “was applied to Duong's equity account with the defendant,

from which Duong [could] withdraw funds at her discretion.” Id. 

In addition, a field consultant for the defendant, Jennifer

Anistik, would visit Duong’s franchise store. Anistik “provided

Duong with merchandising ideas and recommendations, evaluation of

the condition of the store, and other advice on increasing sales

and profits.” Id. Every pay period Duong sent information about

the hours worked by her employees and their rate of pay to the

defendant’s accounting department. The defendant’s accounting

department deducted the payroll expenses from Duong’s equity

account and sent payroll checks for Duong’s employees to Duong

via courier. Id., at *2. Duong interviewed and hired

individuals to work at the franchise, set employees’ rates of

pay, determined promotions, instructed employees on their

specific job duties, and scheduled employees’ work shifts. Id. 

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 29 of 57
The plaintiffs filed an action against the defendant seeking to

recover unpaid overtime and meal-break compensation under the

FLSA and California’s wage-and-hour laws. The defendant moved

for summary judgment against, inter alia, the plaintiffs’ FLSA

claims on the ground that it was not the plaintiffs’ joint

employer. The court applied the economic reality test,

considered the parties “relationship as a whole,” concluded the

defendant was not the plaintiffs’ joint employer, and granted

summary judgment for the defendant. The court noted the

franchise agreement gave the exclusive right and responsibility

to control hiring and firing to Duong, and the record reflected

Duong did, in fact, solely make hiring and firing decisions. 

Id., at *4. The court found unpersuasive the plaintiffs’

argument that Duong’s ability to control hiring and firing was

illusory because the franchise agreement could be terminated by

the defendant at any time. Id. The court, however, found “the

power to terminate a franchise alone is not sufficient to create

a joint employment relationship.” Id. (citations omitted). The

court also noted the record reflected Duong “exclusively arranged

plaintiffs’ workshifts.” Id, at *5. The court did not find

persuasive the plaintiffs’ argument that the defendant had

supervision and control of franchise employees’ conditions of

employment because the defendant set the store hours, “had total

control over the delivery of service by plaintiffs, and had

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 30 of 57
control over the food service and the uniforms to be worn.” The

court noted “simply setting the standards without actual control

of the day-to-day operations is not sufficient to establish an

employer-employee relationship between [the defendant] and

plaintiffs.” Id. (citing Alberter v. McDonald's Corp., 70 F.

Supp. 2d 1138, 1145 (D. Nev. 1999), and Thomas v. Freeway Foods,

Inc., 406 F. Supp. 2d 610, 617 (M.D.N.C. 2005)). “Such policies

are merely reflective of an inherent interrelation of operations

between the two entities and [the defendant’s] goal of attaining

conformity to certain operational standards and details.” Id.

(citing Scales v. Sonic Indus., Inc., 887 F. Supp. 1435, 1439

(E.D. Okla. 1995)(“Outside of the necessary control over

conformity to standard operational details inherent in many

franchise settings, McDonald's only real control over [the

franchisee] was its power to terminate the franchises.”)). The

plaintiffs also asserted Anistik, Defendant’s field consultant,

inspected the plaintiff’s uniforms and instructed the plaintiffs

to check customers’ identification when selling alcoholic

beverages and cigarettes. The court, however, concluded “such

actions do not raise a material issue of fact regarding [the

defendant’s] control of the workplace or conditions of

employment.” Id. Finally, the plaintiffs asserted the defendant

had control over franchise employees’ payroll functions

“including keeping and generating time records; withholding and

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 31 of 57
paying federal and state taxes, worker's compensation premiums,

and EDD taxes; calculating, generating, and delivering the

employees' paychecks; filing quarterly returns; and providing

employees with annual W2's.” Id., at *6. The court, however,

concluded those “ministerial functions are insufficient to

support plaintiffs' argument that [the defendant] controls labor

relations. Providing a ‘payroll service to a franchisee's

employees does not in any manner create an indicia of control

over labor relations sufficient to demonstrate that the

franchisor is a joint employer.’” Id. (quoting Hatcher v.

Augustus, 956 F. Supp. 387, 392 (E.D.N.Y. 1997)). The court

noted the defendant 

was not responsible for setting plaintiffs' wages,

using its funds to pay plaintiffs, or providing

any employment benefits. The record indicates

[the defendant] has not utilized its own funds to

pay any portion of the compensation to plaintiffs. 

All payroll funds and taxes were directly debited

from Duong's equity account. Although [the

defendant] generates paychecks, this is merely a

convenience for the franchisees. . ., who provided

all relevant wage and tax information. 

Id. As noted, the court concluded, after considering the

relationship as a whole, that the defendant was not the

plaintiffs’ employer under the economic reality test. 

Similarly in Courtland v. GCEP-Surprise, LLC, Buffalo

Wild Wings, Inc. (BWWI) owned and operated over 250 restaurants

as corporate-owned locations and franchised more than 470 Buffalo

Wild Wings restaurants. No. CV–12–00349–PHX–GMS, 2013 WL

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 32 of 57
3894981, at *1 (D. Ariz. Jul. 29, 2013). In October 2007 GCEP

entered into a franchise agreement with BWWI to operate a

franchised restaurant. Pursuant to the franchise agreement GCEP

was responsible for “the hire, training, discipline,

compensation, and termination of all Restaurant employees.” Id. 

The agreement also set out guidelines “regarding plant

maintenance, product presentation and service, insurance, and use

of the BWWI trademark.” Id. BWWI mandated training for the

franchise restaurant's general manager, operational manager, and

assistant manager “directed towards product presentation and

service.” Id. The training, however, did not involve human

resources or franchise employment matters. BWWI performed

periodic evaluations of the Restaurant to ensure compliance with

the agreement’s guidelines, but the “evaluators did not review

employee management and had minimal interaction with

non-managerial staff.” Id. Supplemental materials provided by

BWWI to franchise owners relating to franchise restaurant

employment matters “was merely advisory.” Id. The plaintiff, an

employee of a BWWI franchise restaurant, brought a Title VII

claim against BWWI and GCEP. BWWI moved for summary judgment on

the plaintiff’s claims against it on the ground that it was not

the plaintiff’s joint employer pursuant to the economic realities

test. The court found BWWI was not the plaintiff’s joint

employer and granted BWWI’s motion for summary judgment. The

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court stated: “A franchisor is not a joint employer unless it

has significant control over the employment relationship.” Id.,

at *3. The court noted BWWI did not have the right to hire, to

supervise, or to fire employees nor did BWWI compensate franchise

employees. In addition, GCEP “was responsible for payroll,

scheduling, and employee recordkeeping as well as worker's

compensation claims and unemployment insurance . . . [and]

independently determined how its employees were reviewed,

promoted and disciplined.” Id., at *4. BWWI also did not train

nonmanagerial staff nor did it “provide assistance with respect

to HR issues, mandate HR training, or monitor the Restaurant's HR

policies.” Id. Although BWWI set out in the agreement

“guidelines regarding plant maintenance, products and operations,

liability insurance, indemnification, periodic inspection, and

use of the BWWI logo,” it did so only “to maintain and develop

the good will behind its franchise,” which “does not equate [to]

joint employment [because BWWI did so] for a . . . purpose . . .

different than [that of] the employer.” Id., at *3-4. Although

BWWI had the power to terminate the franchise, “that supervision

alone is not sufficient to create a joint employment

relationship.” Id. (quotation omitted).

Courts outside of the Ninth Circuit have also concluded

franchisors were not franchise employees’ joint employers under

circumstances similar to those here. For example in Evans v.

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 34 of 57
McDonald’s Corporation the court concluded the defendant

franchisor was not the plaintiff’s joint employer:

Control is, we agree, an important factor in any

determination of this issue. See Wheeler, 825

F.2d at 270 (control over details and results of

worker's performance is the most important factor

in determining employer/employee relationship)

. . . . McDonald's did not exert the type of

control that would make it liable as an employer

under Title VII. McDonald's may have stringently

controlled the manner of its franchisee's

operations, conducted frequent inspections, and

provided training for franchise employees. The

record also indicates, however, that McDonald's

did not have control over Everett Allen's labor

relations with his franchise employees. See

Armbruster, 711 F.2d at 1337–38 (control over

elements of labor relations is a central concern);

Carter, 470 F. Supp. at 1161 (without control over

labor relations, stringent control over details of

independent operators did not make defendant an

employer of operator's employees). McDonald's did

not have financial control over Everett Allen's

franchises. Outside of the necessary control over

conformity to standard operational details

inherent in many franchise settings, McDonald's

only real control over Everett Allen was its power

to terminate his franchises.

936 F.2d 1087, 1090 (10th Cir. 1991). In Scales v. Sonic

Industries, Inc., the court held the defendant franchisor was not

the plaintiff’s joint employer:

[The] provisions [of Sonic's Operation Manual]

cited by Scales are insufficient to support her

argument that Sonic controls the labor relations

with respect to the Idabel restaurant's employees

. . . . Sonic's policy statement and appeal

process fall woefully short of establishing the

necessary control to impose Title VII liability on

Sonic. In contrast to the almost total lack of

control over employment decisions and the Idabel

restaurant's day-to-day operations established by

[the record], Sonic's policy statement and appeal

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 35 of 57
process are merely reflective of an inherent

interrelation of operations between the two

entities and Sonic's goal of attaining conformity

to certain operational standards and details

. . . . Sonic's Operation Manual does not vest

ultimate control over labor relations in Sonic,

but rather, that authority remains with the

franchisee who is merely guided in its employment

decisions by the content of the license/franchisee

agreement with Sonic.

87 F. Supp. 1435, 1439-40 (E.D. Okla. 1995). 

Here, as in Singh, Courtland, Evans, and Scales,

Defendant has established it does not have the power to hire or

to fire franchise employees and it is not responsible for or

involved in franchise employee work schedules, hours of

employment, salaries, insurance, fringe benefits, or hours of

work. Although Defendant provides some training to the

individuals in the person-in-charge position, it is not involved

in nonmanagerial employee training. Even though franchises are

required to use Defendant’s payroll system and Defendant’s system

aggregates the data and sends it to franchisees’ payroll

providers, the Singh court noted such “ministerial functions are

insufficient to support plaintiffs’ argument that [defendant]

controls labor relations. Providing a ‘payroll service to a

franchisee's employees does not in any manner create an indicia

of control over labor relations sufficient to demonstrate that

the franchisor is a joint employer.’” 2007 WL 715488, at *6

(quoting Hatcher, 956 F. Supp. at 392). In addition, Defendant’s

provision of nonmandatory advisory materials relating to Human

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 36 of 57
Resources and the training of franchise employees does not

establish Defendant has control over the franchise employees.

Taking the circumstances of Defendant’s relationship

with NWG as a whole and applying the Bonnette factors, the Court

concludes Plaintiffs have not established as a matter of law that

Defendant was their joint employer. 

D. Tores-Lopez Factors

The regulatory factors set out in Torres-Lopez overlap

the Bonnette factors. Specifically, in this case the Court has

already addressed the nature and degree of Defendant’s control

over NWG workers; Defendant’s degree of supervision of franchise

employees’ work; Defendant’s power to determine the pay rates or

the methods of payment of NWG’s workers; Defendant’s right to

hire, to fire, or to modify the employment conditions of NWG

workers; and Defendant’s preparation of payroll and the payment

of wages to NWG workers. In addition, the Court has concluded an

evaluation of these factors based on the circumstances of this

case does not establish Defendant was Plaintiffs’ joint employer. 

With respect to the nonregulatory factors, the Court concludes

most of them do not apply to this matter because they relate to

whether individuals are independent contractors or employees, a

question that is not at issue here. With respect to the

nonregulatory factors, the Court, however, notes Defendant owns

the equipment and premises of the NWG restaurants.

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Viewing the evidence in the light most favorable to

Plaintiffs, the Court concludes on this record that Plaintiffs

have not established as a matter of law that Defendant was their

joint employer. Accordingly, the Court grants Defendant’s Motion

for Summary Judgment on Plaintiffs’ FLSA claims. 

II. Diaz’s claims are subject to mandatory arbitration.

Defendant moves for summary judgment as to all of Diaz’s

claims on the ground that they are subject to mandatory

arbitration. Specifically, Defendant notes Diaz signed an

enforceable arbitration agreement with Defendant on July 29,

2008, which requires Diaz to arbitrate the claims he has brought

in this action.

Plaintiffs assert the arbitration agreement on which

Defendant relies is not enforceable because Defendant has not

established Diaz signed the agreement; if he did sign the

agreement, Diaz was a minor when he did so; Defendant waived the

arbitration agreement; and/or the agreement is illegal under the

NLRA and the FLSA.

A. Diaz signed the arbitration agreement.

As noted, Plaintiffs assert Defendant has not

established Diaz signed the arbitration agreement. Defendant,

however, points out that Diaz electronically signed the

arbitration agreement using a “Jack in the Box CBT terminal.” 

Specifically, as part of the new-hire process at Jack in the Box,

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 38 of 57
Diaz affirmatively accepted the arbitration agreement by logging

onto a CBT terminal, reviewing the agreement, clicking “yes” that

he agreed to the terms, and entering his confidential password to

record his agreement. In addition, James Stubblefield,

Defendant’s former attorney, testified in his Declaration that

Diaz electronically signed the agreement on July 29, 2008. 

See Decl. of James Stubblefield at ¶ 2, Gessele I (#242). 

Stubblefield testified he is one of Defendant’s custodians of

records, and, as such, he reviewed the electronic-acknowledgment

record maintained by Defendant’s Human Resources Department. 

Defendant also filed a document that describes the electronicagreement process used at the time tat Diaz electronically signed

the arbitration agreement. See Decl. of Susan Pettijohn at ¶¶ 2-

3, Ex. AA. Oregon law specifically permits electronic signatures

to bind individuals to agreements. See, e.g., Oregon Revised

Statute § 84.004(8)(“Electronic signature” means an electronic

sound, symbol or process attached to or logically associated with

a record and executed or adopted by a person with the intent to

sign the record.”); Oregon Revised Statute § 84.019(1)(“A record

or signature may not be denied legal effect or enforceability

solely because it is in electronic form.”). 

On this record the Court concludes Defendant has

established Diaz signed the arbitration agreement in a legally

binding and acceptable manner.

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B. Diaz is bound by the arbitration agreement.

Plaintiffs also assert Diaz is not bound by the

agreement because he signed it when he was a minor and repudiated

it on January 4, 2011, when he filed his individual action

against Defendant and NWG. Defendant, however, contends Diaz did

not repudiate the contract within a reasonable time after

attaining majority and/or Diaz should be estopped from asserting

that he repudiated the contract because Diaz retained the benefit

of the bargain (i.e., employment) after he attained majority.

It is undisputed that Diaz was born on January 7, 1992,

and that he was 16 years old when he signed the arbitration

agreement and began working in a restaurant owned by Defendant at

the time. It is also undisputed that Diaz attained the age of

majority (18 years old) on January 7, 2010, and continued to work

in the restaurant owned by Defendant and subsequently by NWG. 

Oregon law permits minors age 16 and older to work with

certain limitations on hours and days per week. See Or. Rev.

Stat. § 653.315. Oregon law, however, also provides individuals

do not attain majority until they are 18 years of age and, as a

result, may not (with certain specific exceptions) enter into

binding contracts until age 18. Or. Rev. Stat. § 109.510.

Nevertheless, Oregon courts have held 

a former minor may disaffirm a contract within a

“reasonable time” after reaching the age of

majority, see Highland v. Tollisen, 75 Or. 578,

587 (1915), or, conversely, may ratify a contract

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after reaching the age of majority by manifesting

an intent to let the contract stand, see Haldeman

v. Weeks, 90 Or. 201, 205 (1918); see also Richard

A. Lord, 5 Williston on Contracts § 9:17, 166–70

(4th ed. 2009)(“[I]f an infant after reaching the

age of majority engages in any conduct that

objectively manifests an intent to regard the

bargain as binding, the former minor will be held

as a matter of law to have ratified the

contract.”). Further, . . . although what

constitutes a reasonable period of time after

reaching the age of majority varies widely

depending on the circumstances, it is well

established that ratification of a voidable

contract abolishes a party's power to later

disaffirm it. See Brown et ux. v. Hassenstab et

ux., 212 Or. 246, 256 (1957)(“The two courses of

action are inconsistent and the taking of one will

preclude the other.”); Snyder v. Rhoads, 47 Or.

App. 545, 553–54, 615 P.2d 1058, rev. den., 290

Or. 157 (1980)(similar).

Bagley v. Mt. Bachelor, Inc., 258 Or. App. 390, 398-99 (2013),

overruled on other grounds by Bagley v. Mt. Bachelor, 356 Or. 543

(2014). 

Here Diaz continued to work in the restaurant owned by

Defendant and subsequently by NWG after he reached age 18. The

Court finds continuing to work under the terms of the contract

after attaining the age of majority constitutes “conduct that

objectively manifests an intent to regard the bargain as

binding.” Thus, Diaz ratified the terms of his employment

contract, including the arbitration agreement, after attaining

majority and, therefore, “abolish[ed] [his] power to later

disaffirm it.” Accordingly, the Court concludes Diaz is bound by

the arbitration agreement. 

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C. Defendant did not waive its right to enforce the

arbitration agreement.

Plaintiffs assert even if Diaz signed and ratified the

agreement, Defendant waived the right to enforce the arbitration

agreement because it failed to assert the right to arbitrate in

Diaz’s individual action against Defendant and NWG. Defendant

does not address Plaintiffs’ waiver argument in its Reply.

Specifically, Plaintiffs assert NWG and other

franchisee defendants moved to compel arbitration in Diaz’s

individual case, but Defendant did not file its own motion to

compel arbitration or move to join the other defendants’ motions. 

Plaintiffs further assert Defendant “filed two different answers

in that case, four months apart, each asserting many affirmative

defenses, and never once raised the issue of arbitration at any

time in the six months of litigation before the case was

dismissed.” Plaintiffs contend Defendant’s conduct constitutes

waiver.

In its initial answer filed in Diaz’s individual case

Defendant asserted, among other things, an affirmative defense of

waiver and/or estoppel as follows: “Plaintiff, by his action

and/or omission, has waived and/or is otherwise estopped from

asserting claims against Defendant Jack in the Box, Inc.” Diaz

v. Jack in the Box, Inc., No. 3:11-CV-0006-JO, Answer (#3) at 

¶ 57. One month after Defendant filed its initial answer, NWG

filed a motion to compel arbitration and to stay the matter

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pending arbitration relying on the arbitration agreement between

Diaz and NWG that was signed by Diaz on March 29, 2010, after NWG

purchased from Defendant the franchise for the restaurant at

which Diaz worked. Defendant did not file a motion to compel

arbitration pursuant to the arbitration agreement that Diaz

signed with Defendant in July 2008. On May 30, 2011, Diaz filed

an amended complaint in his individual matter. On June 16, 2011,

Defendant filed an answer to Diaz’s amended complaint in which it

again asserted an affirmative defense of estoppel. Less than a

month later on July 6, 2011, Diaz filed an unopposed motion to

dismiss his claims against Defendant without prejudice.

Under Oregon law “a waiver is the ‘intentional

relinquishment of a known right.’” Wood Park Terrace Apartments

Ltd. P'ship v. Tri–Vest, LLC, 254 Or. App. 690, 695 (2013)

(quoting Guardian Mgmt. LLC v. Zamiello, 194 Or. App. 524, 529

(2004)). With respect to waiver, Oregon courts have held:

“[I]n the absence of an express agreement a waiver

will not be presumed or implied contrary to the

intention of the party whose rights would be

injuriously affected thereby, unless by his

conduct the opposite party has been misled, to his

prejudice, into the honest belief that such waiver

was intended or consented to. To make out a case

of waiver of a legal right there must be a clear,

unequivocal, and decisive act of the party showing

such a purpose or acts amounting to an estoppel on

his part.

Baumgarner v. Cmty. Svcs., Inc., 992 F. Supp. 2d 1081, 1088 (D.

Or. 2014)(quoting Brown v. Portland Sch. Dist. No. 1, 291 Or. 77,

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 43 of 57
84 (1981)). The Ninth Circuit has made clear that “[w]aiver of a

contractual right to arbitration is not favored,” and, therefore,

any party arguing waiver of arbitration bears a heavy burden of

proof.” Richards v. Ernst & Young, LLP, 744 F.3d 1072, 1074 (9th

Cir. 2013)(quotation omitted). When “the concern is whether the

undisputed facts of defendant's pretrial participation in the

litigation satisfy the standard for waiver, the question of

waiver of arbitration is one of law.” Id.

Plaintiffs do not cite any cases in which a defendant

was held to have waived an affirmative defense when the defendant

timely asserted the defense in its answer but did not file a

motion as to the affirmative defense at the time the other

defendants did so. In fact, courts have held even untimely

assertions of an affirmative defense are insufficient to

establish prejudice or waiver. See, e.g., Owens v. Kaiser Found.

Health Plan, Inc., 244 F.3d 708, 713 (2001)(“We conclude,

however, that Kaiser's knowledge that Appellants' previous action

had been dismissed is insufficient to demonstrate waiver of the

affirmative defense of res judicata in the absence of any

representation by Kaiser that it did not intend to assert that

defense before trial.”); Baumgarner, 992 F. Supp. 2d at 1088-89

(“[M]ere untimely assertion of an affirmative defense is

insufficient to establish prejudice. In the absence of any

factual basis showing Defendant voluntarily relinquished its

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 44 of 57
right to rely on the Tort–Claim Notice requirements of the OTCA,

the Court declines to conclude that Defendant waived its

Affirmative Defense of Plaintiff's failure to provide Defendant

with OTCA notice.”). Similarly in Richards the Ninth Circuit

reversed the district court’s decision that the defendant “had

waived its right to arbitration by failing to assert that right

as a defense in an action brought by two other former employees,

David Ho and Sarah Fernandez, whose action had been consolidated

with that of Ms. Richards.” 744 F.3d at 1074. 

Defendant asserted the affirmative defense of estoppel

in both of its answers filed in Diaz’s individual case. Other

than not filing a motion to compel arbitration during the short

duration of Diaz’s individual case, Plaintiffs do not identify

any actions by Defendant nor does the record reflect any actions

by Defendant that constitute “a clear, unequivocal, and decisive

act . . . showing such a purpose or acts amounting to an estoppel

on [its] part” sufficient to establish waiver as a matter of law. 

The Court, therefore, concludes Defendant did not waive its right

to assert arbitration.

D. The arbitration agreement is illegal under the National

Labor Relations Act (NLRA), 29 U.S.C. § 151, et seq.4

Finally, Plaintiffs assert the arbitration agreement is

4 Like the Ninth Circuit in Morris, this Court concludes

“because the contract's conflict with the NLRA is determinative,

we need not—and do not—reach [Plaintiffs’] alternative arguments

regarding the . . . the FLSA.” 834 F.3d at 990.

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 45 of 57
illegal under the NLRA and/or the FLSA. Specifically, Plaintiffs

assert the provision of the arbitration agreement that states

“[n]either Employee nor Company shall be entitled to join or

consolidate in arbitration claims . . . or arbitrate a

representative action or a claim as a representative or member of

a class” violates the mutual aid and protection clause of the

NLRA, 29 U.S.C. § 157, and the collective action provision of the

FLSA, 29 U.S.C. § 216. Plaintiffs rely on the Ninth Circuit’s

recent decision in Morris v. Ernst & Young, LLP, 834 F.3d 975

(9th Cir, 2016), to support their assertion.

In Morris the plaintiffs brought putative class and

collective action against the defendant for allegedly

misclassifying them and similarly-situated employees as exempt

employees in violation of the FLSA and California labor laws. 

The defendant moved to compel arbitration pursuant to a

“concerted action waiver,” which employees were required to sign

as a condition of employment. 834 F.3d at 979. The concertedaction waiver 

required employees to (1) pursue legal claims

against [the defendant] exclusively through

arbitration and (2) arbitrate only as individuals

and in “separate proceedings.” The effect of the

two provisions [was] that employees could not

initiate concerted legal claims against the

company in any forum — in court, in arbitration

proceedings, or elsewhere.

Id. The district court granted the motion to compel arbitration

on the basis of the concerted-action waiver, and the plaintiffs

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appealed. The Ninth Circuit reversed the district court and held

the concerted-action waiver violated §§ 7 and 8 of the NLRA

because it prohibited employees from bringing a concerted action

in any forum:

Applied to the [defendant’s] contract, § 7 and § 8

[of the NLRA] make the terms of the concerted

action waiver unenforceable. The “separate

proceedings” clause prevents concerted activity by

employees in arbitration proceedings, and the

requirement that employees only use arbitration

prevents the initiation of concerted legal action

anywhere else. The result: interference with a

protected § 7 right in violation of § 8. Thus,

the “separate proceedings” terms in the

[defendant’s] contracts cannot be enforced.

Id. at 984-85. The Ninth Circuit also found the concerted-action

waiver was not enforceable under the FAA:

The contract defense in this case does not “derive

[its] meaning from the fact that an agreement to

arbitrate is at issue.” Concepcion, 563 U.S. at

339. An agreement to arbitrate work-related

disputes does not conflict with the NLRA. Indeed,

federal labor policy favors and promotes

arbitration.

The illegality of the “separate proceedings” term

here has nothing to do with arbitration as a

forum. It would equally violate the NLRA for

Ernst & Young to require its employees to sign a

contract requiring the resolution of all workrelated disputes in court and in “separate

proceedings.” The same infirmity would exist if

the contract required disputes to be resolved

through casting lots, coin toss, duel, trial by

ordeal, or any other dispute resolution mechanism,

if the contract (1) limited resolution to that

mechanism and (2) required separate individual

proceedings. The problem with the contract at

issue is not that it requires arbitration; it is

that the contract term defeats a substantive

federal right to pursue concerted work-related

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legal claims.

Id. 984-85 (emphasis added)(citations omitted).

The Ninth Circuit’s holding in Morris is clear: A

provision in an employment contract that prohibits employees from

pursuing concerted work-related legal claims (such as collective

actions under the FLSA or class actions under state law), whether

in arbitration or in court, violates the NLRA’s substantive right

and cannot be enforced under the FAA or otherwise.

As noted, here the arbitration agreement provides

“[n]either Employee nor Company shall be entitled to join or

consolidate in arbitration claims . . . or arbitrate a

representative action or a claim as a representative or member of

a class.” That provision seeks to prohibit employees from

pursuing concerted work-related claims. The Court, therefore,

concludes the clause of the arbitration agreement prohibiting

consolidated action violates the NLRA and is unenforceable.

In its Reply Defendant asserts the arbitration

agreement does not violate the NLRA because it contains a

severability clause permitting the Court to sever the concernedaction prohibition of the agreement. Specifically, the

arbitration agreement provides:

Severability

The provisions of this Agreement are severable and

independent, and the invalidity, illegality or

unenforceability of any provision herein shall not

affect the validity, legality or enforceability of

the remaining provisions of this Agreement.

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 48 of 57
Stubblefield Decl,, Ex. 1, at 5-6 (Gessele I, #242). In Morris

the Ninth Circuit specifically acknowledged the possibility of a

court severing an unenforceable prohibition on concerted action

from an arbitration agreement and enforcing the remainder of the

agreement if possible:

Stolt-Nielsen S.A. v. AnimalFeeds International

Corp., 559 U.S. 662 (2010), is not to the

contrary. Under Stolt, an arbitrator may not add

to the terms of an arbitration agreement, and

therefore may not order class arbitration unless

the contract provides for it. Id. at 684. This

does not require a court to enforce an illegal

term. Nor would Stolt prevent the district court,

on remand, from severing the “separate

proceedings” clause to bring the arbitration

provision into compliance with the NLRA.

834 F.3d at 998, n.8. In fact, in Morris the Ninth Circuit

concluded:

Because the district court's order compelling

arbitration was based, at least in part, on the

separate proceedings provision, we must vacate the

order and remand to the district court to

determine whether the “separate proceedings”

clause is severable from the contract. We take no

position on whether arbitration may ultimately be

required in this case.

Id. at 990. 

The Ninth Circuit has held when an arbitration

agreement includes a severability clause such as the one at issue

here, “the offending clause waiving representative claims may be

severed from the rest of the agreement.” Hopkins v. BCI

Coca-Cola Bottling Co. of Los Angeles, 640 F. App’x 672, 673 (9th

Cir. 2016)(court severed the offending clause pursuant to a

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 49 of 57
severability provision that stated “[t]he invalidity or

unenforceability of any provision shall not affect the

application of any other provision.”). 

Accordingly, the Court severs the provision of the

arbitration agreement at issue in this case that prohibits

employees from concerted action. The Court concludes the

remainder of the arbitration agreement is valid and enforceable

and, therefore, grants Defendant’s Motion for Summary Judgment as

to Diaz’s claims on the ground that those claims are subject to

mandatory arbitration under the terms of the modified arbitration

agreement. 

III. Whether the FLSA claims of any California putative

collective-action members are subject to the settlements in

the Frederick and Olvera cases is not ripe.

Defendant also moves for partial summary judgment on the

ground that the FLSA claims of any California putative

collective-action members are subject to the settlements in the

Frederick and Olvera cases. Specifically, Defendant asserts two

court-approved settlements of California wage-and-hour class

actions “bar[] the relitigation of the FLSA claims of those

California class members [in Gessele II] who did not opt-out of

the Frederick and Olvera settlements.”

Plaintiffs assert even in cases in which courts have held

plaintiffs may waive in settlement their right to bring a future

collective action, no court has reached that conclusion with

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respect to “class waivers.” Plaintiffs point out that the cases

relied on by Defendant involved an individual release signed by

an individual plaintiff in exchange for a severance package

rather than a class release. According to Plaintiffs, this

distinction is critical because the FLSA requires each plaintiff

to opt in to a collective action in order to be bound by the

result of the collective action. See, e.g., Allen v. Bedolla,

787 F.3d 1218, 1221 (9th Cir. 2015)(“The settlement releases or

forecloses all of the claims that [the plaintiff] asserted, or

could have asserted, against [the employer], including meal and

rest break claims that he did not make, except that class members

who do not make a claim will not release any claims under FLSA,

and class members who opt out will not be held to release any

claims made in the lawsuit for individual relief.”); Dickerson v.

Cable Commc’ns, Inc., No. 3:12-CV-00012-PK, 2013 WL 6178460, at

*3 n.6 (D. Or. Nov. 25, 2013)(“The Court notes that under the

Settlement Agreement, all class members release relevant state

law causes of action, whereas only Qualified Claimants who

opted-in to the settlement release the relevant FLSA causes of

action.”). In addition, Plaintiffs note courts have disapproved

otherwise valid global state-law class-action releases when they

include a global release of FLSA claims. For example, in

Apparicio v. Radioshack Corporation the court held the release

violated federal law:

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The release covers ‘[a]ll claims, demands, rights,

liabilities, and causes of action of every nature

and description . . . for violation of any state

or federal statute, rule or regulation, including

state or federal wage and hour laws’ arising out

of or related to the allegations in the First

Amended Complaint. However, under the federal

Fair Labor Standards Act, no member of the class

is either bound by the class action adjudication

or barred from filing an individual claim within

the limitations period unless he opts to become a

party. Thus, a class member can only release her

federal FLSA claims if she opts in, giving her

consent in writing to become a party. As the

settlement agreement and proposed class notice is

currently drafted, putative class members who do

not respond to the notice by either filing a claim

form or a timely request for exclusion are deemed

covered by the claims release. The FLSA will not

allow this. Thus, if the parties wish to include

FLSA claims within the scope of the release, they

must modify the terms such that those class

members who do not respond do not release any FLSA

claims they may have.”

CV 08-1145 GAF AJWX, 2009 WL 1490560, at *2 (C.D. Cal. May 21,

2009)(emphasis in original).

Plaintiffs note Frederick and Olvera did not involve 

FLSA collective-action claims, which require plaintiffs to

affirmatively opt in if they wish to be bound by the result of

the collective action. Instead they included only state wageand-hour class-action claims, which require putative plaintiffs

to opt out if they do not wish to be bound by the result of the

class action. Plaintiffs assert the “class members in Frederick

and Olvera may not even have received notice of those actions,

let alone opted in,” and “neither of the class notices informed

class members that they would be waiving FLSA rights unless they

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 52 of 57
opted out or objected.” Plaintiffs note Defendant “has not cited

any cases, and plaintiffs’ counsel’s research has not revealed

any, holding that a non-named class member in a state-law class

is barred from bringing an FLSA claim by an earlier class

settlement’s general release.” According to Plaintiffs,

therefore, putative California collective-action plaintiffs in

this matter are not prohibited from bringing FLSA claims by the

settlements in Frederick and Olvera.

On October 19, 2016, Defendant submitted the case of

Richardson v. Wells Fargo Bank, N.A., 839 F.3d 442 (5th Cir.

2016), as a supplemental authority to support its assertion that

putative California collective-action plaintiffs in this matter

are barred by the settlements in Frederick and Olvera from

bringing FLSA claims. In Richardson the plaintiffs filed an

action against the defendant employer alleging it improperly

classified them as exempt employees and failed to pay appropriate

overtime in violation of the FLSA. Separate from the Richardson

action, numerous California employees of the defendant filed a

class action against the defendant in California state court

alleging violations of the FLSA and California’s wage-and-hour

laws (the Lofton action). Ultimately the plaintiff and defendant

reached a settlement in the Lofton action and, as part of the

settlement process, Lofton class members were sent notice of the

proposed settlement, a claim form, and an exclusion form. In

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 53 of 57
order to receive a portion of the settlement, class members had

to fill out and return the claim form. To opt out of the

settlement, class members had to fill out and return the

exclusion form. 839 F.3d at 445. The Lofton settlement included

a release, “which the notice sent to class members recounted.” 

Id. In particular, the Lofton release included a release of “any

and all applicable state and federal law wage-and-hour claims,

rights, demands, liabilities, and causes of action of every

nature and description, whether known or unknown, arising during

the Class Members' Released Period . . . including any existing

under the Fair Labor Standards Act.” Id. at 445-46. The court

approved the Lofton settlement. In the Richardson action,

“[a]fter the district court conditionally certified two

collective actions, the majority of those who had opted in

settled their claims in an agreement approved by the district

court. Th[e] settlement, however, excluded 1,516 plaintiffs who

had opted into the [Richardson] but were members of [the Lofton

action](‘California Plaintiffs’).” Id. at 444-45. The defendant

moved for summary judgment in Richardson asserting the California

plaintiffs who were not included in the settlement were precluded

from asserting their claims by the Lofton settlement because none

of the California plaintiffs had opted out of Lofton. The

district court granted the defendant’s motion ane found, among

other things, that “the waiver of FLSA claims as part of the

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 54 of 57
Lofton settlement ha[d] res judicata effect even though it was

accomplished through an opt out class action” Id. at 448. The

plaintiffs appealed. The Fifth Circuit affirmed.

As noted, Defendant asserts Richardson supports its argument

that putative California plaintiffs in this matter are barred

from bringing claims against Defendant under the terms of the

Frederick and Olvera settlements. The procedural posture of

Richardson, however, differs from this action in that the

Richardson court had already conditionally certified two

collective actions, and the members of those classes, therefore,

had been definitively identified. Here the Court has not

certified any class or collective action, conditionally or

otherwise. Further, it is not certain that a class or collective

action will be certified in this matter or whether such a class

or collective would include any California plaintiffs who were

also members of the Frederick or Olvera settlements. The Court,

therefore, concludes the question of the res judicata effect of

the Frederick and Olvera settlements to potential collectiveaction Plaintiffs in this matter is not ripe, and any decision by

this Court on that issue would be an impermissible advisory

opinion at this stage of the litigation. See, e.g., Maldonado v.

Morales, 556 F.3d 1037, 1044 (9th Cir. 2009)(The role of the

courts is “neither to issue advisory opinions nor to declare

rights in hypothetical cases, but to adjudicate live cases or

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 55 of 57
controversies.”).

Accordingly, the Court denies as premature Defendant’s

Motion for Partial Summary Judgment as to the res judicata effect

of the Frederick and Olvera settlements to potential collectiveaction Plaintiffs in this matter. 

CONCLUSION

For these reasons, the Court GRANTS in part and DENIES in

part Defendant’s Motion (#95) for Partial Summary Judgment as

follows:

1. GRANTS Defendant’s Motion as to Plaintiffs’ FLSA claims

from March 29, 2010, on the ground that Defendant was not

Plaintiffs’ joint employer during that period; 

2. GRANTS Defendant’s Motion as to Plaintiff Jason Diaz's

state and federal claims on the ground that he is required to

arbitrate those claims under the terms of the arbitration

agreement as amended by the Court; and

3. DENIES Defendant’s Motion as premature as to the FLSA

claims of California putative class members subject to the class

settlements in the Frederick and Olvera cases.

The Court DIRECTS the parties to confer and to file no later

than January 17, 2017, a Joint Status Report identifying the

claims and Plaintiffs that remain in this matter and specifying a

jointly proposed case-management schedule to advance this case to

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Case 3:14-cv-01092-BR Document 108 Filed 12/13/16 Page 56 of 57
ultimate resolution. The Court will set a status conference with

the parties after receiving and reviewing the Joint Status

Report.

IT IS SO ORDERED.

DATED this 13th day of December, 2016.

/s/ Anna J. Brown

 

ANNA J. BROWN

United States District Judge

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