IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

JESSICA GESSELE, ASHLEY

ORTIZ, NICOLE GESSELE, TRICIA

TETRAULT, and CHRISTINA

MAULDIN, on behalf of

themselves and all others

similarly situated,

Plaintiffs,

v.

JACK IN THE BOX, INC., a

corporation of Delaware,

Defendant.

3:14-CV-01092-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
DEFENDANT’S MOTION (#161) FOR SUMMARY JUDGMENT NO. 1 -

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

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

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

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

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

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

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

II. The WBF assessments are not a tax pursuant to Oregon

Revised Statutes § 316.197. . . . . . . . . . . . . 37

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

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

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

III. Plaintiffs’ WBF claims are not barred by federal tax

law.. . . . . . . . . . . . . . . . . . . . . . . . 46

PLAINTIFF’S MOTION (#172) FOR PARTIAL SUMMARY JUDGMENT ON THE 

ISSUE OF PRIMA FACIE LIABILITY ON THEIR WORKERS' BENEFIT FUND

CLAIMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

I. Defendant improperly over-withheld Plaintiffs’ WBF

contributions.. . . . . . . . . . . . . . . . . . . 51

II. Penalty Wages under Oregon Revised Statutes 

§ 652.150.. . . . . . . . . . . . . . . . . . . . . 52

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

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

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

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

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

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

I. Deductions from Employees’ Wages Permitted under 

Oregon Law. . . . . . . . . . . . . . . . . . . . . 63

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

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

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

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

A. Exception under Oregon Revised Statutes 

§ 653.035(1).. . . . . . . . . . . . . . . . . 71

B. Exceptions under Oregon Revised Statutes 

§ 652.610(3)(b). . . . . . . . . . . . . . . . 72

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

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

DEFENDANT’S MOTION (#163) FOR SUMMARY JUDGMENT NO. 3 - REMEDIES 

RELATED TO ALLEGED WRONGFUL DEDUCTIONS ARE LIMITED. . . . . . 94

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

II. Penalties Pursuant to Oregon Revised Statutes 

2 - OPINION AND ORDER
§§ 652.615 and 652.150. . . . . . . . . . . . . . . 96

III. Plaintiffs may recover penalties under §§ 652.615 and 

652.150 for improper WBF or shoe deductions that

reduced their pay below minimum wage or resulted in

them receiving insufficient overtime. . . . . . . . 98

IV. Plaintiffs are limited to a single $200 sum or actual

damages for improper WBF deductions and/or a single

$200 sum or actual damages for improper shoe 

deductions. . . . . . . . . . . . . . . . . . . . . 102

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

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

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

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

DEFENDANT’S MOTION (#164) FOR SUMMARY JUDGMENT NO. 4 - BREACH OF 

FIDUCIARY DUTY TORT CLAIMS IS TIME-BARRED.. . . . . . . . . . 107

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

II. Parties’ Arguments. . . . . . . . . . . . . . . . . 115

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

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

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

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

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

PLAINTIFFS’ MOTION (#174) FOR PARTIAL SUMMARY JUDGMENT ON THE 

ISSUE OF PRIMA FACIE LIABILITY ON THEIR FRANCHISE TRANSFER CLAIMS

AND PLAINTIFFS’ MOTION (#178) FOR PARTIAL SUMMARY 

JUDGMENT ON THE ISSUE OF DAMAGES UNDER O.R.S. 652.140.. . . . 128

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

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

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

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

PLAINTIFFS’ MOTION (#175) FOR PARTIAL SUMMARY JUDGMENT ON THE 

ISSUE OF DAMAGES UNDER O.R.S. 652.615.. . . . . . . . . . . . 138

PLAINTIFFS’ MOTION (#176) FOR PARTIAL SUMMARY JUDGMENT ON THE 

ISSUE OF DAMAGES UNDER O.R.S. 653.025 and PLAINTIFFS’ MOTION

(#177) FOR PARTIAL SUMMARY JUDGMENT ON THE ISSUE OF DAMAGES 

UNDER O.R.S. 653.261. . . . . . . . . . . . . . . . . . . . . 139

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

3 - OPINION AND ORDER
BROWN, Senior Judge.

This matter comes before the Court on the following Motions

by Defendant Jack in the Box, Inc.:

1. Motion (#161) for Summary Judgment No. 1 - Arbitration

of Claim

2. Motion (#162) for Summary Judgment No. 2 - WBF

Deduction Claims Barred by Tax Laws

3. Motion (#163) for Summary Judgment No. 3 - Remedies

Related to Alleged Wrongful Deductions Are Limited

4. Motion (#164) for Summary Judgment No. 4 - Breach of

Fiduciary Duty Tort Claims is Time-Barred

5. Motion (#165) for Summary Judgment No. 5 - QuasiContract/Unjust Enrichment Claim Fails as a Matter of

Law

and on the following Motions by Plaintiffs Jessica Gessele,

Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina

Mauldin:

1. Motion (#172) for Partial Summary Judgment on the Issue

of Prima Facie Liability on Their Workers' Benefit Fund

Claims

2. Motion (#173) for Partial Summary Judgment on the Issue

of Prima Facie Liability on Their Shoe Claims

3. Motion (#174) for Partial Summary Judgment on the Issue

of Prima Facie Liability on Their Franchise Transfer

Claims

4. Motion (#175) for Partial Summary Judgment on the Issue

of Damages under O.R.S. 652.615

5. Motion (#176) for Partial Summary Judgment on the Issue

of Damages under O.R.S. 653.025

6. Motion (#177) for Partial Summary Judgment on the Issue

of Damages under O.R.S. 653.261

4 - OPINION AND ORDER
7. Motion (#178) for Partial Summary Judgment on the Issue

of Damages under O.R.S. 652.140

8. Motion (#179) for Partial Summary Judgment on Jack in

the Box’s Third Affirmative Defense (Authorized

Deductions)

9. Motion (#180) for Partial Summary Judgment on Jack in

the Box’s Fourth Affirmative Defense (Benefit to

Employees)

10. Motion (#181) for Partial Summary Judgment on Jack in

the Box’s Fifth Affirmative Defense (Valid Deduction).

The Court concludes the record for each of these Motions is

sufficiently developed, and, particularly in light of the many

interrelated issues raised in these several motions, oral

argument would not be helpful to resolve them. See United States

v. Delgado, 640 F. App’x 620, 621 (9th Cir. 2016)(“Whether [a] 

. . . hearing is appropriate rests in the reasoned discretion of

the district court.”)(quotation omitted)); L.R. 7-1(d)(“The Court

will determine whether oral argument would help it resolve the

matter.”). 

For the following reasons the Court:

1. DENIES Defendant’s Motion (#161) for Summary Judgment

No. 1 - Arbitration of Claim;

2. DENIES Defendant’s Motion (#162) for Summary Judgment

No. 2 - WBF Deduction Claims Barred by Tax Laws;

3. GRANTS in part and DENIES in part Defendant’s Motion

(#163) for Summary Judgment No. 3 - Remedies Related to

Alleged Wrongful Deductions Are Limited;

4. GRANTS Defendant’s Motion (#164) for Summary Judgment

No. 4 - Breach of Fiduciary Duty Tort Claims is

Time-Barred;

5 - OPINION AND ORDER
5. DENIES Defendant’s Motion (#165) for Summary Judgment

No. 5 - Quasi- Contract/Unjust Enrichment Claim Fails

as a Matter of Law;

6. GRANTS Plaintiffs’ Motion (#172) for Partial Summary

Judgment on the Issue of Prima Facie Liability on Their

Workers' Benefit Fund Claims

7. DENIES Plaintiffs’ Motion (#173) for Partial Summary

Judgment on the Issue of Prima Facie Liability on Their

Shoe Claims

8. GRANTS Plaintiffs’ Motion (#174) for Partial Summary

Judgment on the Issue of Prima Facie Liability on Their

Franchise Transfer Claims

9. DENIES Plaintiffs’ Motion (#175) for Partial Summary

Judgment on the Issue of Damages under O.R.S. 652.615

10. DENIES Plaintiffs’ Motion (#176) for Partial Summary

Judgment on the Issue of Damages under O.R.S. 653.025

11. DENIES Plaintiffs’ Motion (#177) for Partial Summary

Judgment on the Issue of Damages under O.R.S. 653.261

12. GRANTS in part and DENIES in part Plaintiffs’ Motion

(#178) for Partial Summary Judgment on the Issue of

Damages under O.R.S. 652.140

13. GRANTS in part and DENIES in part Plaintiffs’ Motion

(#179) for Partial Summary Judgment on Jack in the

Box’s Third Affirmative Defense (Authorized Deductions)

14. GRANTS in part and DENIES in part Plaintiffs’ Motion

(#180) for Partial Summary Judgment on Jack in the

Box’s Fourth Affirmative Defense (Benefit to Employees)

15. GRANTS in part and DENIES in part Plaintiffs’ Motion

(#181) for Partial Summary Judgment on Jack in the

Box’s Fifth Affirmative Defense (Valid Deduction).

BACKGROUND

Until September 30, 2011, Defendant Jack in the Box, Inc.,

owned and operated several restaurants in Oregon. From May 2006

6 - OPINION AND ORDER
through September 2011 Defendant sold its Oregon restaurants to

various franchise operators as follows:

May 1, 2006: 6 restaurants

March 29, 2010: 21 restaurants

March 7, 2011: 13 restaurants

September 30, 2011: 3 restaurants

After September 30, 2011, Defendant did not own or operate any

restaurants in Oregon and did not have any Oregon employees. The

last Jack in the Box restaurant in Oregon owned by Defendant at

which any of the named Plaintiffs worked was sold to Northwest

Group, Inc. (NWG) on March 29, 2010.

Plaintiffs were employed by Defendant in its Oregon

restaurants at various times. Plaintiffs received their final

paychecks from Defendant on the following dates:

Tricia Tetrault: July 11, 2008

Ashley Ortiz: December 26, 2008

Nicole Gessele: March 20, 2009

Jessica Gessele: November 23, 2009

Christina Mauldin: March 30, 2010.

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

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

situated, filed a putative class-action Complaint in this Court

against Defendant Jack in the Box (Gessele I, Case No. 3:10-

CV-00960-ST)1 for violation of the minimum-wage and overtime

provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. 

§ 201, et seq., and various Oregon wage-and-hour laws. Gessele I

1 In Gessele I Ashley Ortiz proceeded as Ashley Gessele and

Christina Mauldin proceeded as Christina Luchau.

7 - OPINION AND ORDER
was assigned to Magistrate Judge Janice M. Stewart. 

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

Gessele, and Tricia Tetrault filed a First Amended Complaint in

Gessele I in which they added Christina Mauldin as a named

Plaintiff.

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

Gessele, Tricia Tetrault, and Christina Mauldin filed a Second

Amended Complaint in Gessele I in which they alleged Defendant

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

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

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

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

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

due following termination of Plaintiffs' employment in violation

of Oregon Revised Statutes § 652.140, (6) deducted unauthorized

amounts from Plaintiffs' paychecks in violation of Oregon Revised

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

required by Oregon Revised Statutes § 652.120. 

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

Gessele, Tricia Tetrault, and Christina Mauldin filed a Motion to

Certify Oregon Rule 23(b)(3) Classes and Alternative Motions to

Either Certify Hybrid FLSA Classes or Certify FLSA 216(b)

Collectives in Gessele I.

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

8 - OPINION AND ORDER
Gessele, Tricia Tetrault, and Christina Mauldin filed a Motion

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

January 7, 2013, Magistrate Judge Janice M. Stewart denied the

Motion on the grounds of undue delay and prejudice.

On January 28, 2013, Magistrate Judge Stewart issued

Findings and Recommendation in which she recommended granting in

part and denying in part Plaintiffs’ Motion to Certify. 

Specifically, Magistrate Judge Stewart recommended conditional

certification of the proposed FLSA Workers Benefit Fund and Shoe

Collectives and Subcollectives under § 216(b) and certification

of the proposed Rule 23(b)(3) Oregon Workers Benefit Fund and

Shoe Classes and Subclasses. Magistrate Judge Stewart also

recommended denying certification of the proposed FLSA Break

Collective and the Rule 23(b)(3) Break Classes and Subclasses.

On April 1, 2013, District Judge Ancer L. Haggerty entered

an Order adopting the January 28, 2013, Findings and

Recommendation; conditionally certifying Plaintiffs' proposed

FLSA Workers' Benefit Fund and Shoe Collectives and

Subcollectives under § 216(b); certifying Plaintiffs' proposed

Rule 23(b)(3) Oregon Workers Benefit Fund and Shoe Classes and

Subclasses; and denying certification of the FLSA Break

Collective and the Rule 23(b)(3) Break Classes and Subclasses.

From May 31, 2011, to June 18, 2013, Defendant filed four

Answers in Gessele I in which it asserted between eight and

9 - OPINION AND ORDER
twelve affirmative defenses. Defendant, however, did not assert

arbitration as a defense in any of its Answers in Gessele I.

On May 7, 2013, Defendant filed a Motion for Summary

Judgment in Gessele I as to all of the claims of Jessica Gessele,

Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina

Mauldin on the grounds that their FLSA claims were barred by the

statute of limitations and that the court may not exercise

supplemental jurisdiction over Plaintiffs' state-law claims.

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

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

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

Plaintiff in Gessele I.

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

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

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

Gessele, Tricia Tetrault, and Christina Mauldin were required to

file written consents with the Court to commence their FLSA

collective action, but they failed to file those written consent

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

jurisdiction over the FLSA claims of Jessica Gessele, Ashley

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

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

jurisdiction over their state-law claims. The Court also

concluded Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia

10 - OPINION AND ORDER
Tetrault, and Christina Mauldin did not file written consents

within the applicable limitations period; neither equitable

tolling nor equitable estoppel applied; and, therefore, their

FLSA claims were barred by the applicable statute of limitations. 

Accordingly, the Court dismissed the FLSA claims of Jessica

Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and

Christina Mauldin with prejudice and dismissed their state-law

claims without prejudice.

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

Gessele, Tricia Tetrault, and Christina Mauldin filed in Gessele

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

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

their FLSA claims without prejudice on the ground that the Court

lacked jurisdiction over those claims.

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

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

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

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

Tricia Tetrault, and Christina Mauldin failed to file written

consent forms within the time required by the FLSA. The Court,

therefore, never acquired jurisdiction over the FLSA claims of

Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault,

and Christina Mauldin, and, as a result, the Court could not

exercise supplemental jurisdiction over their state-law claims. 

11 - OPINION AND ORDER
Accordingly, on May 15, 2014, the Court entered a Judgment

dismissing Gessele I without prejudice.

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

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

a putative class action against Jack in the Box in Multnomah

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

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

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

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

on the ground of federal-question jurisdiction based on

Plaintiffs’ FLSA claims and/or jurisdiction under the Class

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

On July 16, 2014, Defendant filed an Answer to Plaintiffs’

Complaint in which it asserted sixteen Affirmative Defenses

including one for arbitration in which Defendant stated

“[c]ertain named Plaintiffs and putative collective and class

action members’ claims are barred from litigation in this Court

pursuant to arbitration agreements with Defendant.” Def.’s

Answer at ¶ 90.

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

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

collateral estoppel barred litigation of Gessele II in this

Court; (2) the “law of the case” barred litigation in this Court

12 - OPINION AND ORDER
if issue preclusion did not bar litigation; and (3) judicial

estoppel barred litigation of Gessele II in this Court if neither

issue preclusion nor law of the case barred such litigation. 

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

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

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

issue preclusion barred relitigation as to whether the Court had

jurisdiction to hear the FLSA claims of Jessica Gessele, Ashley

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

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

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

did not bar relitigation as to whether this Court had

jurisdiction; (3) the Court’s decision regarding its lack of

jurisdiction over Gessele I did not apply to Diaz because he was

never a named plaintiff in Gessele I, and, therefore, judicial

estoppel did not apply nor require remand of Diaz’s FLSA claims;

(4) judicial estoppel applied to and estopped Defendant from

relitigating the issue of this Court’s lack of jurisdiction over

the FLSA claims of Jessica Gessele, Ashley Ortiz, Nicole Gessele,

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

waive its right to remove Gessele II by seeking dismissal of

Gessele I on jurisdictional grounds.

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

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

13 - OPINION AND ORDER
Court’s October 17, 2014, Opinion and Order to the Ninth Circuit.

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

for Stay.

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

which it reversed in part the Court’s October 17, 2014, Opinion

and Order and remanded the matter to this Court for further

proceedings. Specifically, the Ninth Circuit held (1) the

doctrine of issue preclusion precluded Defendant from

relitigating “the jurisdictional issues” in Gessele I;

(2) Defendant “[was] not precluded from invoking federal

jurisdiction” in Gessele II because Gessele I did not address

jurisdiction under CAFA nor the timeliness of the new FLSA claims

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

that the Court lacked jurisdiction over the FLSA claims asserted

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

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

asserted FLSA claims, or that the district court has CAFA

jurisdiction over the state-law claims”; and (4) Defendant did

not waive its right to remove Gessele II “through its filings in

the state court or its prior conduct in this litigation.”

On August 31, 2015, Defendant filed a Motion for Partial

Summary Judgment in Gessele II in which it asserted Diaz’s claims

were subject to an arbitration agreement. On the same day

Plaintiffs filed a Motion for Partial Summary Judgment (Statute

14 - OPINION AND ORDER
of Limitations) and to Establish Tolling for FLSA Collective

Members and a Motion for Partial Summary Judgment on Jack in the

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

(Preemption) Affirmative Defenses. 

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

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

Partial Summary Judgment and Plaintiffs’ Motion for Partial

Summary Judgment (Statute of Limitations) as to whether the

California putative class members are subject to binding

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

Defendant's Motion for Partial Summary Judgment and Plaintiffs’

Motion for Partial Summary Judgment (Statute of Limitations)

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

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

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

(Preemption) Affirmative Defenses as to Defendant's Ninth

Affirmative Defense. The Court granted the parties leave to readdress those issues after limited discovery and after the Court

issued its Opinion and Order on the remaining portions of the

pending Motions.

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

issues in the pending Motions for Partial Summary Judgment that

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

At oral argument the parties agreed the issue as to

15 - OPINION AND ORDER
whether Diaz’s claims were subject to mandatory arbitration

required more extensive briefing by both parties, and Defendant,

therefore, withdrew that portion of its Motion for Partial

Summary Judgment.

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

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

denied Plaintiffs’ Motion for Partial Summary Judgment (Statute

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

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

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

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

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

as to Defendant’s Eighth Affirmative Defense and dismissed that

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

Partial Summary Judgment as to Defendant’s Twelfth Affirmative

Defense as to those portions of Plaintiffs’ Seventh and Eighth

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

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

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

Judgment as to Defendant’s Twelfth Affirmative Defense as to

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

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

out in the Court’s March 10, 2016, Opinion and Order. In

summary, the Court noted this matter would go forward as to named

16 - OPINION AND ORDER
Plaintiffs' state-law wage-and-hour claims; Jason Diaz's FLSA

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

the present.

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

which they agreed the following claims remained in this matter:

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

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

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

and (4) Plaintiffs' FLSA claims for the period from March 29,

2010, to the present. Defendant also advised the Court that it

intended to move for summary judgment against Diaz’s claims based

in part on his arbitration agreement with Defendant.

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

granted Defendant leave to file dispositive motions as to the

following issues:

(1) all FLSA claims asserted by Plaintiffs for the period

beginning March 29, 2010, to the present on the ground

that Defendant is not a joint employer of franchisee

employees;

(2) all FLSA claims asserted by Diaz on the ground that he

failed to file a written consent under the FLSA; 

(3) all state and federal claims asserted by Diaz on the

grounds that (a) he was required to arbitrate those

claims and (b) he failed to pursue his claims in

17 - OPINION AND ORDER
arbitration after his individual lawsuit (3:11-cv0006-JO) was dismissed; and

(4) all FLSA claims of any California putative class

members subject to the class settlements in the cases

of Frederick v. Jack-In-The-Box, Inc., No. RIC50144,

and Olvera v. Jack In The Box, Inc., No. 37-2013-

00072707.

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

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

Order. 

On December 13, 2016, the Court issued an Opinion and Order

in which it granted in part and denied in part Defendant’s Motion

as follows:

1. granted Defendant’s Motion as to Plaintiffs’ FLSA

claims for the period beginning March 29, 2010, to the

present on the ground that Defendant was not

Plaintiffs’ joint employer during that period; 

2. granted Defendant’s Motion as to Diaz's state and

federal claims on the ground that Diaz is required to

arbitrate his claims under the terms of the arbitration

agreement; and

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

claims of California putative class members subject to 

18 - OPINION AND ORDER
the class settlements in the Frederick and Olvera cases. 

On February 2, 2017, the Court held a status conference and

directed Plaintiffs to file their Motion to Certify Rule 23(b)(3)

Classes by March 3, 2017.

On March 2, 2017, Plaintiffs filed a Motion for Rule

23(b)(3) Class Certification. 

On June 12, 2017, the Court issued an Opinion and Order in

which it granted in part and denied in part Plaintiffs’ Motion as

follows:

1. granted Plaintiff’s Motion to Certify the Workers

Benefit Fund (WBF) Class, 

2. granted Plaintiff’s Motion to Certify the Shoe Class,

3. granted Plaintiff’s Motion to Certify the Franchise

Transfer Class, and

4. denied Plaintiffs’ Motion to Certify the Unpaid Break

Class.

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

Judgment:

1. Motion (#161) for Summary Judgment No. 1 - Arbitration

of Claim

2. Motion (#162) for Summary Judgment No. 2 - WBF

Deduction Claims Barred by Tax Laws

3. Motion (#163) for Summary Judgment No. 3 - Remedies

Related to Alleged Wrongful Deductions Are Limited

4. Motion (#164) for Summary Judgment No. 4 - Breach of

Fiduciary Duty Tort Claims is Time-Barred

19 - OPINION AND ORDER
5. Motion (#165) for Summary Judgment No. 5 - QuasiContract/Unjust Enrichment Claim Fails as a Matter of

Law.

On May 24, 2019, Plaintiffs filed ten Motions for Partial

Summary Judgment:

1. Motion (#172) for Partial Summary Judgment on the Issue

of Prima Facie Liability on Their Workers' Benefit Fund

Claims

2. Motion (#173) for Partial Summary Judgment on the Issue

of Prima Facie Liability on Their Shoe Claims

3. Motion (#174) for Partial Summary Judgment on the Issue

of Prima Facie Liability on Their Franchise Transfer

Claims

4. Motion (#175) for Partial Summary Judgment on the Issue

of Damages under O.R.S. 652.615

5. Motion (#176) for Partial Summary Judgment on the Issue

of Damages under O.R.S. 653.025

6. Motion (#177) for Partial Summary Judgment on the Issue

of Damages under O.R.S. 653.261

7. Motion (#178) for Partial Summary Judgment on the Issue

of Damages under O.R.S. 652.140

8. Motion (#179) for Partial Summary Judgment on Jack in

the Box’s Third Affirmative Defense (Authorized

Deductions)

9. Motion (#180) for Partial Summary Judgment on Jack in

the Box’s Fourth Affirmative Defense (Benefit to

Employees)

10. Motion (#181) for Partial Summary Judgment on Jack in

the Box’s Fifth Affirmative Defense (Valid Deduction).

STANDARDS

Summary judgment is appropriate when “there is no genuine

20 - OPINION AND ORDER
dispute as to any material fact and the movant is entitled to

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

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

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

genuine dispute as to a material fact. Emeldi v. Univ. of Or.,

673 F.3d 1218, 1223 (9th Cir. 2012). In response to a properly

supported motion for summary judgment, the nonmoving party must

go beyond the pleadings and point to "specific facts

demonstrating the existence of genuine issues for trial." In re

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

"This burden is not a light one. . . . The non-moving party must

do more than show there is some 'metaphysical doubt' as to the

material facts at issue." Id. (citation omitted). 

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

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

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

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

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

reasonable inferences in favor of the nonmoving party. Sluimer

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

judgment cannot be granted where contrary inferences may be drawn

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

381 F.3d 948, 957 (9th Cir. 2004)(citing Sherman Oaks Med. Arts

Ctr., Ltd. v. Carpenters Local Union No. 1936, 680 F.2d 594, 598

21 - OPINION AND ORDER
(9th Cir. 1982)).

"A non-movant's bald assertions or a mere scintilla of

evidence in his favor are both insufficient to withstand summary

judgment." F.T.C. v. Stefanchik, 559 F.3d 924, 929 (9th Cir.

2009)(citation omitted). When the nonmoving party's claims are

factually implausible, that party must "come forward with more

persuasive evidence than otherwise would be necessary." LVRC

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

(citing Blue Ridge Ins. Co. v. Stanewich, 142 F.3d 1145, 1149

(9th Cir. 1998)). 

The substantive law governing a claim or a defense

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

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

resolution of a factual dispute would not affect the outcome of

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

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

ARBITRATION OF CLAIM

For the reasons that follow the Court DENIES Defendant’s

Motion (#161) for Summary Judgment No. 1 - Arbitration of Claim.

Defendant moves for summary judgment as to all of

Plaintiffs’ claims on the ground that those claims are subject to

mandatory arbitration. Plaintiffs, however, assert Defendant has

not established Plaintiffs signed an Arbitration Agreement that

22 - OPINION AND ORDER
requires them to arbitrate their claims, Defendant waited too

long to demand arbitration, and the proper remedy would be to

stay this matter rather than dismiss it even if the Arbitration

Agreement was enforceable.

I. Arbitration Agreement

Defendant relies on the Declaration of Susan Pettijohn to

support its assertion that the named Plaintiffs remaining in this

action signed the same Arbitration Agreement as Diaz, which, as

noted, required Diaz to arbitrate his claims. See Opin. and

Order (#108)(Dec. 13, 2016). Pettijohn testifies she has been a

Human Resources Project Manager for Defendant for 22 years. She

states

[b]etween 2005 and 2014, new employees were

required to log onto a CBT terminal to review

various new-hire documents such as Jack in the

Box’s arbitration agreement. . . . After the new

employee reviewed the agreement, he or she was

presented with an acknowledgement screen. The new

employee would then either click “yes” to accept

the agreement or click “no” if they did not. If

the employee clicked “yes”, he or she was then

required to enter a confidential password which

acted as his or her electronic signature to the

agreement. An electronic record of the new

employee signing the agreement is then stored in

Jack in the Box’s HRIS system and becomes part of

the employee’s personnel record.

Each of the named plaintiffs Jessica Gessele,

Ashley Gessele, Nicole Gessele, Tricia Tetrault,

and Christina Mauldin electronically signed Jack

in the Box’s Dispute Resolution Agreement in the

manner described above. Their agreements and the

dates thereof (“Transaction Date”) are found in

the electronic records stored in Jack in the Box’s

HRIS system in the regular course of business. 

23 - OPINION AND ORDER
Attached Exhibit BB contains true and accurate

copies (excepting the redaction of SSN and Birth

Date) of the named plaintiffs’ electronic

agreements to Jack in the Box’s Dispute Resolution

Agreement.

* * * 

[The] December 2003 version of Jack in the Box’s

Dispute Resolution Agreement was used with all

employees between December 2003 and October 2010.

Decl. of Susan Pettijohn at ¶¶ 4-6. Exhibit BB to Pettijohn’s

Declaration contains electronic printouts of each remaining named

Plaintiff’s acknowledgment of an Arbitration Agreement. 

Defendant’s Arbitration Agreement in place between 2003 and

2010 provided:

In signing the Acknowledgment and Receipt, both

the Company and the Employee agree that all claims

or disputes covered by this Agreement must be

submitted to binding arbitration, and that this

binding arbitration will be the sole and exclusive

remedy for resolving any such claim or dispute. 

This promise to resolve claims by arbitration is

equally binding upon the Company and the Employee.

* * *

This Agreement applies to the following

allegations, disputes, and claims for relief

Employee may presently or in the future have

against the Company . . . and all claims that the

Company may presently or in the future have

against the Employee in any way related to

Employee’s employment or termination: . . .

compensation disputes including wages, overtime,

penalties, bonus payments and benefits; [and]

contractual violations (although no contractual

relationship is hereby created other than this

Agreement).

Pettijohn Decl., Ex. CC at 1.

24 - OPINION AND ORDER
As the Court noted in its December 13, 2016, Opinion and

Order, Oregon law specifically permits electronic signatures to

bind individuals to agreements. See, e.g., Or. Rev. Stat. 

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

symbol or process attached to or logically associated with a

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

sign the record.”); Or. Rev. Stat. § 84.019(1)(“A record or

signature may not be denied legal effect or enforceability solely

because it is in electronic form.”). 

On this record the Court concludes Defendant has established

the remaining named Plaintiffs signed an Arbitration Agreement in

a legally binding and acceptable manner.

II. Terms of the Agreement

According to Plaintiffs, however, even if Defendant has

established Plaintiffs signed the Arbitration Agreement,

Defendant has not established the terms of the Arbitration

Agreement apply because it has “produced no evidence whatsoever

that any of the named plaintiffs’ claims exceed $15,000,” and the

Arbitration Agreement provides: “The following claims or

disputes are not covered by this Agreement: . . . claims seeking

only monetary recovery where the total amount of the claim does

not exceed $15,000.” Pettijohn Decl., Ex. CC at 2. 

Defendant, however, points out that Plaintiffs are asking

the Court to “order an accounting; declare Defendant’s violations

25 - OPINION AND ORDER
as enumerated herein and enjoin Defendant from committing similar

violations in future.” Thus, Defendant contends Plaintiffs do

not seek only “monetary recovery.” Compl. at 34. 

The Court agrees, and, therefore, the Court concludes on

this record that the Arbitration Agreement provision exempting

claims less than $15,000 does not apply to Plaintiffs’ claims.

III. Waiver

Plaintiffs also assert Defendant “has waited too long to

demand arbitration” and, therefore, has either waived its right

to do so and/or the arbitration defense is barred by the statute

of limitations.

According to Defendant, however, it has not waived its right

to arbitrate because it asserted arbitration as an affirmative

defense in Gessele II, it has not acted inconsistently with the

right to arbitrate, and “[t]he passage of time alone is not

sufficient to establish 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)). 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

26 - OPINION AND ORDER
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,

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.

As noted, the remaining named Plaintiffs in this matter

signed the Arbitration Agreement in 2008, but Defendant did not

assert arbitration as an affirmative defense in any of its four

Answers filed in Gessele I, which did not include Diaz as a

Plaintiff. In addition, Gessele I was pending in this Court for

four years during which time Defendant filed, among other things,

a Motion to Dismiss, an Opposition to Plaintiffs’ Motion to

Certify Class, a Motion for Summary Judgment, and a Cross-Motion

for Summary Judgment, but Defendant did not assert in any of

those filings that the named Plaintiffs’ claims were subject to

mandatory arbitration. 

27 - OPINION AND ORDER
In Gessele II, which commenced more than three years after

Gessele I and included Diaz as a named Plaintiff, Defendant first

asserted an Affirmative Defense of arbitration. In particular,

Defendant stated “[c]ertain named Plaintiffs and putative

collective and class action members’ claims are barred from

litigation in this Court pursuant to arbitration agreements with

Defendant.” Def.’s Answer at ¶ 90. Notably, however, Defendant

did not specify which of the named Plaintiffs allegedly had

claims barred by arbitration agreements. When Defendant filed

its August 2015 Motion for Partial Summary Judgment, Defendant

asserted Diaz’s claims were subject to the Arbitration Agreement. 

Defendant, however, did not assert in its Motion that the other

named Plaintiffs’ claims were subject to the Arbitration

Agreement even though Defendant knew at the time that the other

named Plaintiffs had signed the same Arbitration Agreement as

Diaz and Defendant based its argument that Diaz’s claims were

subject to mandatory arbitration on that same Agreement. 

Defendant also did not assert the remaining named Plaintiffs’

claims were subject to mandatory arbitration in its Opposition to

Plaintiffs’ Motion for Rule 23(b)(3) Class Certification. In

fact, it was not until November 2018, which was more than four

years after Plaintiffs filed Gessele II, that Defendant raised

the issue of any Plaintiff other than Diaz being subject to

mandatory arbitration.

28 - OPINION AND ORDER
Defendant asserts some courts have held the passage of time

alone is not sufficient to establish that a party “has been

misled, to his prejudice, into the honest belief that [a] waiver

[of a mandatory arbitration clause] was intended or consented

to.” See, e.g., Call v. Harris Stowe State Univ., No. 4:17-

cv-1548, 2018 WL 1470453, at *5-7 (E.D. Mo. Mar. 26, 2018)

(holding litigation that lasted more than three years and

included extensive discovery did not prejudice the plaintiffs

because the defendants had not litigated “substantial issues on

the merits” and “compelling arbitration would [not] require a

duplication of efforts.”). 

Here, however, Plaintiffs note it is more than the passage

of time that indicates Defendant waived its right to compel

arbitration. Specifically, Plaintiffs emphasize that Defendant

acted inconsistently assert any right to arbitrate for all of the

years that Gessele I and Gessele II were pending before Defendant

first pleaded that defense as to these named Plaintiffs. For

example, Defendant did not assert the Affirmative Defense of

arbitration in Gessele I when Diaz was not a named Plaintiff;

although Defendant engaged in substantial litigation in Gessele I

on the merits of the named Plaintiffs’ claims, it did not include

mandatory arbitration in its assertion of numerous defenses; in

Gessele II Defendant did not assert an Affirmative Defense of

arbitration until Diaz was a named Plaintiff and then stated the

29 - OPINION AND ORDER
Affirmative Defense applied only to “certain named Plaintiffs”;

and, finally, Defendant asserted the Affirmative Defense of

mandatory arbitration only as to Diaz. Thus, for more than eight

years throughout two cases and despite the litigation of several

substantive motions, Defendant did not allege any named Plaintiff

other than Diaz was subject to a mandatory arbitration agreement. 

Defendant concedes it “was aware that all of the named

plaintiffs had signed arbitration agreements, but with the thenprevalent trend among courts to strike class waivers . . . it was

unclear how availing the arbitration defense would be.” Def.’s

Mot. for Summ. J. No. 1 at 5. Rather than controverting

Plaintiffs’ waiver argument, however, this statement suggests

Defendant made a conscious and strategic decision not to raise

arbitration as to the named Plaintiffs other than Diaz. 

Notwithstanding its statement, Defendant, nevertheless, points to

the Supreme Court’s recent decision in Epic Systems v. Lewis, 138

S. Ct. 1612 (2018), to support its assertion that it did not wait

too long to raise the issue of arbitration as to the named

Plaintiffs other than Diaz.

In Epic the Supreme Court resolved a split in the circuits

as to whether arbitration agreements that require employees to

participate in individualized arbitration proceedings violate the

“concerted activity” provision of the National Labor Relations

Act (NLRA) and are, therefore, unenforceable. In resolving the

30 - OPINION AND ORDER
issue the Supreme Court addressed three cases from different

circuits including Morris v. Ernst & Young, 834 F.3d 975, 990

(9th Cir. 2016). 

In Morris the plaintiffs entered into employment agreements

that required them to arbitrate any disputes that might arise

between the plaintiffs and their employer, Ernst & Young. The

agreements “specified individualized arbitration, with claims

‘pertaining to different [e]mployees [to] be heard in separate

proceedings.’” Epic, 138 S. Ct. at 1620. The defendant employer

brought a motion to compel arbitration, which the district court

granted. The Ninth Circuit, however, reversed the district court

and concluded the agreement’s requirement of individualized

arbitration proceedings violated the NLRA because it barred

employees from engaging in the “concerted activity” provision of

the NLRA, 29 U.S.C. § 157. Morris, 834 F.3d at 990. The Supreme

Court reversed the Ninth Circuit’s decision and concluded

provisions in employment contracts that require individualized

arbitration proceedings are enforceable:

Congress has instructed that arbitration

agreements like those before us must be enforced

as written. While Congress is of course always

free to amend this judgment, we see nothing

suggesting it did so in the NLRA-much less that it

manifested a clear intention to displace the

Arbitration Act. Because we can easily read

Congress's statutes to work in harmony, that is

where our duty lies. The judgments in Epic, 

No. 16-285, and Ernst & Young, No. 16-300, are

reversed, and the cases are remanded for further

proceedings consistent with this opinion. 

31 - OPINION AND ORDER
Epic, 138 S. Ct. at 1632.

Although Epic changed the landscape of individualized-action

requirements in arbitration agreements, it did not alter the

enforceability of arbitration agreements generally. In fact,

this Court relied on Morris in its December 2016 Opinion and

Order in which it concluded the mandatory Arbitration Agreement

in Diaz’s employment contract with Defendant was enforceable. 

Although this Court concluded based on Morris that it was

required to sever the provision of the Arbitration Agreement that

prohibited employees from bringing or participating in collective

action, this Court, nevertheless, concluded the arbitration

clause itself was enforceable. Thus, even before the Supreme

Court’s decision in Epic the Ninth Circuit had concluded

employment arbitration agreements such as the one at issue here

were enforceable and mandated arbitration. Moreover, Defendant

was obviously aware of this fact because it moved for summary

judgment as to Diaz’s claims in August 2015 on the ground that

Diaz signed an Arbitration Agreement, and this Court granted

Defendant’s Motion as to that issue in December 2016. The

Supreme Court’s decision in Epic, therefore, does not support

Defendant’s assertion that Plaintiffs have not been “‘misled, to

[their] prejudice, into the honest belief that [a] waiver [of the

Arbitration Agreement] was intended or consented to” by

Defendant.’” Baumgarner, 992 F. Supp. 2d at 1088 (D. Or. 2014)

32 - OPINION AND ORDER
(quoting Brown, 291 Or. at 84). 

In summary, the Court concludes Defendant not only has acted

inconsistently as to its late-asserted right to arbitrate the

remaining named Plaintiffs’ claims, nine years of substantive

litigation has occurred in this Court between the remaining named

Plaintiffs and Defendant without Defendant specifically asserting

its arbitration defense against the named Plaintiffs even though

Defendant was well aware of that defense. On this record the

Court concludes Defendant has waived the right to seek

arbitration of the named Plaintiffs’ claims, and, in any event,

Plaintiffs would be prejudiced if the Court mandated the parties

to arbitrate this matter at this late date.2 

Accordingly, the Court denies Defendant’s Motion (#161) for

Summary Judgment No. 1 - Arbitration of Claims.

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

WBF DEDUCTION CLAIMS BARRED BY TAX LAWS

For the reasons that follow the Court DENIES Defendant’s

Motion (#162) for Summary Judgment No. 2 - WBF Deduction Claims

Barred by Tax Laws.

As noted, on March 2, 2017, Plaintiffs filed a Motion for

Rule 23(b)(3) Class Certification in which they moved to certify

2 In light of this ruling, the Court need not address

Plaintiffs’ alternative argument that Defendant’s arbitration

defense is barred by the statute of limitations.

33 - OPINION AND ORDER
four classes, including the Workers Benefit Fund (WBF) class,

which consists of all Oregon employees of Defendant’s restaurants

who had a WBF assessment deducted from their paychecks between 

August 13, 2004, and February 10, 2012.3 In its Response to

Plaintiffs’ Motion Defendant conceded it “over-withheld”

assessments for the WBF from its Oregon employees from August 13,

2004, through February 10, 2012, and, therefore, it did “not

challenge certification of Plaintiff’s WBF class under Rule

23(a)(2) on substantive grounds.” 

In its Motion for Summary Judgment No. 2 Defendant,

nevertheless, asserts the Court must dismiss Plaintiffs’ claims

based on WBF deductions because those claims are barred by state

and federal tax laws. According to Plaintiffs, however,

Defendant may not assert an unpled affirmative defense at this

point, and, in any event, Plaintiffs’ WBF claims are not barred

by federal or state tax laws because the WBF is not a “tax”

within the meaning of those laws. In the alternative, Plaintiffs

state they would not oppose remand of this matter to the state

tax court under the Tax Injunction Act, 28 U.S.C. § 1341.

3 As the Court noted in its June 2017 Opinion and Order,

Defendant sold the last of its Oregon locations to a franchisee

on September 30, 2011. Defendant, therefore, did not have any

employees in Oregon as of September 30, 2011. Thus, it is

questionable whether any putative Plaintiff for any of the

proposed classes will be able to recover damages incurred after

that date.

34 - OPINION AND ORDER
I. The WBF 

The WBF is a program that provides various benefits to

workers injured on the job in Oregon since 1966. The WBF is

authorized pursuant to Oregon Revised Statutes § 656.605, which

provides the WBF is “separate and distinct from the General Fund”

and “consist[s] of . . . (a) Moneys received pursuant to ORS

656.506 . . . [and] (d) All moneys received by the Director of

the Department of Consumer and Business Services pursuant to law

or from any other source for purposes for which the fund may be

expended.” Or. Rev. Stat. § 656.605(1). In addition, “all

moneys in the [WBF] are appropriated continuously to the Director

of the Department of Consumer and Business Services to carry out

the activities for which the fund may be expended.” Or. Rev.

Stat. § 656.605(3). Finally, § 656.605(2) provides funds in the

WBF may be expended only for certain specific purposes, none of

which apply here.

As noted, the WBF consists in part of funds received

pursuant to § 656.506 as follows:

Every employer shall retain from the moneys earned

by all employees an amount determined by the

Director of the Department of Consumer and

Business Services for each hour or part of an hour

the employee is employed and pay the money

retained in the manner and at such intervals as

the Director of the Department of Consumer and

Business Services shall direct.

In addition to all moneys retained under

subsection (2) of this section, the director shall

assess each employer an amount equal to that

35 - OPINION AND ORDER
assessed pursuant to subsection (2) of this

section.

Or. Rev. Stat. § 656.506(2) and (3). Thus, pursuant to § 656.506

employers and employees are required to pay equal amounts into

the WBF. For example, in 2003 the WBF assessment rate was 3.6¢

per hour. Employers, therefore, were required to pay to the WBF

at least 1.8¢ for every hour that their employees worked during

2003. Although employers were permitted to pay more than 1.8¢,

they were not permitted to withhold from their employees’

paychecks more than 1.8¢ for every hour that their employees

worked during 2003.

II. The WBF assessments are not a tax pursuant to Oregon Revised

Statutes § 316.197.

As noted, Defendant asserts Plaintiffs’ claims based on WBF

assessments are barred by state tax laws. Specifically,

Defendant contends WBF assessments are taxes within the meaning

of Oregon Revised Statutes § 316.197 and are subject to the

provisions of § 316.197 even though they are referred to as

“assessments” in their authorizing statute, and, therefore,

Plaintiffs do not have a private right of action against

Defendant for employees’ overpayment of WBF assessments pursuant

to § 316.197(2).

Plaintiffs, however, assert even if WBF assessments are

taxes, which Plaintiffs dispute, they are not taxes covered by 

§ 316.197. According to Plaintiffs, the lack of a private right

36 - OPINION AND ORDER
of action provision in § 316.197(2), therefore, does not apply to

Plaintiffs’ claims.

Oregon Revised Statutes § 316.197 provides:

[W]ithin the time that each employer is required

to pay over taxes withheld for federal income tax

purposes for any period, the employer shall pay

over to the Department of Revenue or to a

financial agent of the department the amounts

required to be withheld under ORS 316.167 and

316.172 and 320.550 for the same period.

* * *

Every amount so paid over shall be accounted for

as part of the collections under this chapter. 

No employee has any right of action against an

employer in respect of any moneys deducted from

wages and paid over in compliance or intended

compliance with this section.

Or. Rev. Stat. § 316.197(1) and (2)(emphasis added). 

A. Oregon Rules of Statutory Construction

Traditionally Oregon courts have followed the

methodology for interpreting statutes “outlined in PGE v. Bureau

of Labor and Industries, 317 Or. 606, 610-12, 859 P.2d 1143

(1993).” State v. Gaines, 346 Or. 160, 164 (2009). This

methodology

entails three sequential levels of analysis to

determine the legislature's intent. First, the

court examines the text and context of the

statute. Id. at 610-11, 859 P.2d 1143. If the

legislature's intent is obvious from that first

level of analysis, "further inquiry is unnecessary." Id. at 611, 859 P.2d 1143. "If, but only

if," the legislature's intent is not obvious from

the text and context inquiry, "the court will then

move to the second level, which is to consider

legislative history[.]" Id. at 611, 859 P.2d

37 - OPINION AND ORDER
1143. If the legislature's intent remains unclear

after examining legislative history, "the court

may resort to general maxims of statutory

construction to aid in resolving the remaining

uncertainty." Id. at 612, 859 P.2d 1143.

Id. at 164-65. In 2009, however, the Oregon Supreme Court

concluded:

[I]n light of the 2001 amendments to ORS 174.020,

the appropriate methodology for interpreting a

statute is as follows. The first step remains an

examination of text and context. PGE, 317 Or. at

610-11, 859 P.2d 1143. But, contrary to this

court's pronouncement in PGE, we no longer will

require an ambiguity in the text of a statute as 

a necessary predicate to the second step --

consideration of pertinent legislative history

that a party may proffer. Instead, a party is

free to proffer legislative history to the court,

and the court will consult it after examining text

and context, even if the court does not perceive

an ambiguity in the statute's text, where that

legislative history appears useful to the court's

analysis. However, the extent of the court's

consideration of that history, and the evaluative

weight that the court gives it, is for the court

to determine. The third, and final step, of the

interpretative methodology is unchanged. If the

legislature's intent remains unclear after

examining text, context, and legislative history,

the court may resort to general maxims of

statutory construction to aid in resolving the

remaining uncertainty.

Id. at 171-72. 

B. The WBF as Assessment or Tax

As noted, Defendant asserts the WBF assessment is a

tax, and, therefore, Plaintiffs’ claims related to WBF

withholdings are barred by state and federal law. Defendant

relies on the dictionary definition of tax and its reading of the

38 - OPINION AND ORDER
statutes applicable to the WBF as “treat[ing] the assessment like

a payroll tax.” 

As it must, the Court first begins with the text and

context of the WBF statute. “Relevant context includes other

provisions of the same statute and other related statutes.” 

Matter of Comp. of Gadalean, 364 Or. 707, 719 (2019)(quotation

omitted). 

The WBF authorizing statute describes the funds

collected therein as “assessments.” See Or. Rev. Stat. 

§ 656.605(4)(“the amount of the hourly assessments provided in

subsections (2) and (3) of this section annually may be adjusted

to meet the needs of the [WBF]”); § 656.605(5)(“It is the intent

of the Legislative Assembly that the department set rates for the

collection of assessments pursuant to subsections (2) and (3) of

this section in a manner so that . . . the cash balance shall be

an amount of not less than six months of projected expenditures

from the [WBF]”); § 656.605(6)(“Every employer required to pay

the assessments referred to in this section shall make and file a

report of employee hours worked and amounts due under this

section upon a combined report form prescribed by the Department

of Revenue”). In contrast, other Oregon statutes use the word

“tax” or “taxes” to describe funds collected by employers. For

example, Oregon Revised Statutes § 316.167, which directs every

employer to “withhold tax” from every employee’s wages “at the

39 - OPINION AND ORDER
time of the payment of wages,” provides if a person 

who supplies funds to or for the account of an

employer for the purpose of paying wages of the

employees of such employer has actual notice or

knowledge that such employer does not intend to or

will not be able to make timely payment or deposit

of the tax required to be deducted and withheld,

such lender, surety or other person shall be

liable to the State of Oregon in a sum equal to

the taxes together with interest which are not

timely paid over to the department. 

Or. Rev. Stat. § 316.167(3)(emphasis added). 

As the Oregon Supreme Court recently explained: 

“When the legislature uses different terms in

related statutes, we presume that the legislature

intended different meanings.” State v. Guzek, 322

Or. 245, 265 (1995). The same rule applies if the

legislature used different terms in the same

statute. See State v. Keeney, 323 Or. 309, 316

(1996)(citing State v. Harp, 299 Or. 1, 7 n.7

(1985), for principle); see also Jordan v. SAIF,

343 Or. 208, 217 (2007)(“[The] use of a term in

one section and not in another section of the same

statute indicates a purposeful omission.”).

Matter of Comp. of Gadalean, 364 Or. at 719. See also United

States v. Patrick, No. 6:98-CR-60099-MC, 2017 WL 4683929, at *5

(D. Or. Oct. 18, 2017)(When “provisions of the same statute use

different terms, it is presumed that the enacting legislature

meant those terms to have . . . different meanings.”).

The Oregon Legislature’s use of the word “assessment”

as opposed to the word “tax” in the WBF authorizing statute

indicates a purposeful distinction by the Oregon Legislature

between the WBF assessment and taxes that are elsewhere

authorized in Oregon statutes. It also indicates the terms

40 - OPINION AND ORDER
“assessment” and “tax” have different meanings. This distinction

is further supported by the fact that the statutes applicable to

the WBF on which Defendant relies refer in specific ways to both

taxes and assessments. For example, § 316.168, which applies to

“every employer subject to the provisions of ORS 316.162 to

316.221, 656.506 and ORS chapter 657,” universally refers to both

quarterly taxes and assessments. See, e.g., § 316.168(1)(every

employer “shall make and file a combined quarterly tax and

assessment report”)(emphasis added)); § 316.168(3)(requires the

tax report to be “accompanied by payment of any tax or assessment

due and a combined tax and assessment payment coupon . . . [and

to] . . . indicate . . . the portions of the payment to be paid

to each of the tax or assessment programs”)(emphasis added)); 

§ 316.168(4)(requires the Department of Revenue to “credit the

payment to the tax or assessment programs . . . and shall

promptly remit the payments to the appropriate taxing or

assessing body”)(emphasis added)). 

In summary, the fact that the Oregon Legislature used

the words tax and assessment as separate and distinct concepts

rather than interchangeably indicates a purposeful distinction

and difference in the meaning of the terms. Accordingly, after

examining the text and context of the WBF, the Court concludes

the WBF is not a “tax.” 

41 - OPINION AND ORDER
 C. Applicability of § 316.197

Plaintiffs assert even if WBF assessments were a tax

rather than an assessment, they are not subject to § 316.197. 

Section 316.197(1) sets out three specific sections of Oregon

statutes to which it applies: “[T]he employer shall pay over to

the Department of Revenue . . . the amounts required to be

withheld under ORS 316.167 and 316.172 and 320.550.” 

1. Oregon Revised Statutes § 316.197(1) does not

indicate WBF assessments are taxes.

As noted, employers are mandated to withhold WBF

assessments pursuant to § 656.506, which is not one of the

statutes referenced in § 316.197, and the statutes set out in 

§ 316.197(1) do not relate in any way to WBF assessments or

payments. When interpreting statutes in similar circumstances,

courts have relied on the maxim of statutory construction that

“the expression of one is the exclusion of others.” McDermott v.

SAIF Corp., 286 Or. App. 406, 415 (2017). As noted, § 316.197(1)

applies to “amounts required to be withheld under ORS 316.167 and

316.172 and 320.550”; other statutes are not enumerated in 

§ 316.197(1); and, therefore, it can be inferred that the Oregon

Legislature did not intend to include other Oregon statutory

sections. See, e.g., Murray v. Mayo Clinic, No. 17- 16803, 2019

WL 3926945, at *6 (9th Cir. Aug. 20, 2019)(“Relief under 

§ 2000e-5(g)(2)(B) is available only if the plaintiff proves a

violation under § 2000e-2(m). Section 2000e-2(m) narrowly

42 - OPINION AND ORDER
prohibits the consideration of race, color, religion, sex, or

national origin as a motivating factor for any employment

practice. It does not prohibit the consideration of disability. 

Congress’s express listing of these status-based considerations

under § 2000e-2(m) is best understood as an exclusion of all

other considerations.”); Silvers v. Sony Pictures Entm’t, Inc.,

402 F.3d 881, 885 (9th Cir. 2005)(“The doctrine of expressio

unius est exclusio alterius as applied to statutory

interpretation creates a presumption that when a statute

designates certain persons, things, or manners of operation, all

omissions should be understood as exclusions.”). Although this

“maxim is merely an auxiliary rule to determine the legislative

intention” of a statutory provision (State ex rel. City of Powers

v. Coos County Airport, 201 Or. App. 222, 234 (2005)), it

provides further support for concluding the Oregon Legislature

did not intend to include § 656.506 in § 316.197(1). See also

MEC Or. Racing, Inc. v. Or. Racing Comm’n, 233 Or. App. 9 (2009)

(“maxim expressio unius est exclusio alterius corroborates,

rather than supplies, meaning to a statute.”). Thus, the Court

concludes § 316.197(1) by its plain language does not apply to

WBF assessments.

2. Oregon Revised Statutes § 316.197(2) does not

indicate WBF assessments are taxes.

Although Defendant acknowledges § 656.506 is not

43 - OPINION AND ORDER
one of the statutes referred to in § 316.197(1), Defendant still

asserts § 316.197(2) broadens the scope of § 316.197(1) and in so

doing brings WBF assessments within the scope of that statute. 

Section 316.197(2) by its terms, however, must be read together

with the limitations set out in § 316.197(1). As noted, 

§ 316.197(2) provides: “Every amount so paid over shall be

accounted for as part of the collections under this chapter. No

employee has any right of action against an employer in respect

of any moneys deducted from wages and paid over in compliance or

intended compliance with this section.” Emphasis added. The

phrase “so paid over” relates to the provision in § 316.197(1)

for employers to “pay over to the Department of Revenue . . . the

amounts required to be withheld under ORS 316.167 and 316.172 and

320.550.” In addition, the phrase “with this section” makes

clear that employees do not have a private right of action

against employers for amounts “paid over” in compliance with 

§ 316.197, which, as noted, is limited to amounts required to be

withheld under Oregon Revised Statutes §§ 316.167, 316.172, and

320.550.

The Court has already concluded § 316.197(1) by its

language does not apply to WBF assessments. On this record the

Court also concludes WBF funds are not “amounts paid over in

compliance with § 316.197.” Accordingly, § 316.197(2) does not

bar Plaintiffs’ WBF claims against Defendant.

44 - OPINION AND ORDER
III. Plaintiffs’ WBF claims are not barred by federal tax law.

Finally, Defendant asserts Plaintiffs’ WBF claims are

actually a tax-refund action, and, therefore, those claims are

barred by federal tax law. Specifically, Defendant asserts

Plaintiffs’ WBF claims are barred by 26 U.S.C. § 7422 and/or 26

U.S.C. § 3403. The Court notes, however, that Plaintiffs assert

their WBF claims are not barred by either of those sections of

the Internal Revenue Code because WBF assessments are not taxes

or “sums” assessed or collected as taxes pursuant to the Internal

Revenue Code.

26 U.S.C. § 7422(a) provides: 

No suit or proceeding shall be maintained in any

court for the recovery of any internal revenue tax

alleged to have been erroneously or illegally

assessed or collected . . . or of any sum alleged

to have been excessive or in any manner wrongfully

collected, until a claim for refund or credit has

been duly filed with the Secretary [of the United

States Treasury]. 

26 U.S.C. § 3403 provides: “The employer shall be liable

for the payment of the tax required to be deducted and withheld

under this chapter [of the United States Internal Revenue Code],

and shall not be liable to any person for the amount of any such

payment.”

Although Defendant cites a number of cases for its assertion

that WBF assessments are taxes or sums subject to the Internal

Revenue Code, each of those cases involves deductions from

employees’ wages pursuant to both federal and state tax45 - OPINION AND ORDER
withholding laws that result in the government receiving less tax

money. For example, in Frederickson v. Starbucks Corporation the

plaintiffs, who were former employees of the defendant, brought a

class action against the defendant “challeng[ing] the legality of

[the defendant’s] practice of withholding state and federal taxes

from barista’s [sic] paychecks based on the cash tips they

receive.” 840 F.3d 1119, 1120 (9th Cir. 2016). Specifically,

the plaintiffs alleged the defendant violated Oregon’s wage-andhour laws when it deducted state and federal taxes from the

plaintiffs’ wages, “thereby failing to pay the baristas their

full wages when due.” Id. at 1121. The Ninth Circuit concluded

the district court lacked jurisdiction to hear the plaintiffs’

state-law, wage-and-hour claims pursuant to the Tax Injunction

Act because even though the plaintiffs sought only declaratory

and injunctive relief rather than a refund of their taxes, the

relief the plaintiffs sought would “enjoin, suspend or restrain 

. . . the collection of state taxes.” Id. at 1122 (quotation

omitted). The Ninth Circuit also concluded the Tax Injunction

Act deprived the district court of jurisdiction because if the

court enjoined the withholding of taxes on the plaintiffs’ tips

as the plaintiffs requested, “Oregon would no longer receive

taxes on the baristas’ tip income unless the baristas report that

income on their tax returns and have the money to pay the taxes

owed when it comes time to file their returns,” which would

46 - OPINION AND ORDER
“stop, not merely inhibit, the flow of tax revenue into Oregon’s

coffers.” Id.

The Court already has concluded WBF assessments, unlike

the deductions at issue in Fredrickson, are not a tax. In

addition, unlike the requested declaratory and injunctive relief

in Fredrickson, the relief requested here would not have any

effect on the flow of state tax revenue. Notably, if Plaintiffs

are successful on their WBF claims, the State of Oregon would not

receive any less revenue because Plaintiffs are only requesting

the Court to find Defendant required Plaintiffs to pay more of

their percentage of the WBF assessment than is authorized under

Oregon law rather than requesting the Court to find that the WBF

payments made to the State were in excess of what is required by

statute. In other words, the total amount of revenue to the

State of Oregon would remain the same regardless whether

Plaintiffs are successful on their WBF claims. 

Finally, Defendant also relies on Brennan v. Southwest

Airlines Company, 134 F.3d 1405 (9th Cir. 1998), amended 140 F.3d

849 (9th Cir. 1998), to support its assertion that WBF

assessments are taxes or sums subject to the Internal Revenue

Code. In Brennan the defendant airlines collected a ten percent

excise tax on domestic air transportation for a number of flights

in 1995 and 1996 “to which the [excise] tax did not apply.” Id.

at 1408. The plaintiffs brought a class action in state court

47 - OPINION AND ORDER
alleging “state-law causes of action for unlawful business

practices and breach of contract” and sought declaratory relief

and an accounting. The defendants removed the action to federal

court, and the plaintiffs filed a motion to remand. The district

court concluded even though the plaintiffs filed only state-law

claims, their action arose under federal law because “in

substance, it constitutes a suit for a tax refund” pursuant to 26

U.S.C. § 7422. The Ninth Circuit affirmed:

Thus, [§ 7422] means that if someone wrongfully

collects money as a tax, then a suit to recover

the sum constitutes a tax refund suit, even if the

sum did not literally constitute an internal

revenue tax. 

* * *

Here, the airlines may not have collected an

internal revenue tax, but they nevertheless

collected a “sum” as a tax. Therefore, Plaintiffs

have filed a tax refund suit within the meaning of

the IRC.

Id. at 1410. Here, however, Plaintiffs do not seek to recover

any sum that was collected as a tax. As noted, the Court has

concluded the WBF is not a tax. In addition, Plaintiffs do not

seek recovery of the amounts that were withheld for the WBF but

instead seek penalties under Oregon’s wage-and-hour laws for

Defendant’s failure to pay its proper percentage of the WBF

assessment. Thus, Brennan is not dispositive of the issues

before this Court. See, e.g., McMaster v. Coca-Cola Bottling Co.

of Ca., 392 F. Supp. 2d 1107, 1112 (N.D. Cal. 2005)(“The cases

48 - OPINION AND ORDER
cited by defendants as controlling examples of properly-removed

tax refund suits are also distinguishable from the present action

because each presented a direct challenge to federal tax laws

. . . . Unlike the factual scenarios in Brennan and Bright, the

plaintiff . . . is not protesting the terms of the tax code. The

plaintiff . . . is not disputing the plain terms of IRC

regulations that fringe benefits can include commuting in a

company vehicle, nor that such commutes may be valued at $3 per

day. . . . As plaintiff is not seeking a refund of taxes, nor

challenging a provision of the tax code, this court holds that

plaintiff's claim is thus not a tax refund suit within the

meaning of 26 U.S.C. section 7422(a).”).

On this record the Court concludes Plaintiffs’ WBF

claims are not a tax-refund action, and, therefore, Plaintiffs’

WBF claims are not barred by federal tax law. Accordingly, the

Court denies Defendant’s Motion (#162) for Summary Judgment No. 2

- WBF Deduction Claims.

PLAINTIFF’S MOTION (#172) FOR PARTIAL SUMMARY JUDGMENT

ON THE ISSUE OF PRIMA FACIE LIABILITY ON THEIR

WORKERS' BENEFIT FUND CLAIMS

For the reasons that follow the Court GRANTS Plaintiffs’

Motion (#172) for Partial Summary Judgment on the Issue of Prima

Facie Liability on Their Workers' Benefit Fund Claims as

specified herein.

49 - OPINION AND ORDER
Plaintiffs move for summary judgment on the issue of

Defendant’s prima facie liability on Plaintiffs’ WBF claims. 

Defendant concedes it over-withheld Plaintiffs’ portion of the

WBF contributions. The Court notes Plaintiffs do not seek a

specific sum of damages in their Motion, but Plaintiffs instead

seek rulings as to their entitlement to various types of damages

generally. 

I. Defendant improperly over-withheld Plaintiffs’ WBF

contributions.

As noted, the WBF is a program that provides various

benefits to workers injured on the job in Oregon since 1966. The

WBF is authorized pursuant to Oregon Revised Statutes § 656.605,

which provides the WBF “consist[s] of . . . (a) Moneys received

pursuant to ORS 656.506 . . . [and] (d) All moneys received by

the Director of the Department of Consumer and Business Services

pursuant to law or from any other source for purposes for which

the fund may be expended.” Or. Rev. Stat. § 656.605(1). 

The WBF assessment rate is determined by the State of

Oregon, which mandates employers to pay at least half of the

assessment and to deduct no more than half from workers’ wages. 

For example, in 2003 the WBF assessment rate was 3.6¢ per hour.

Employers, therefore, were required to pay to the WBF at least

1.8¢ for every hour that their employees worked during 2003. 

Although employers were permitted to pay more than 1.8¢, they

were not permitted to withhold from their employees’ paychecks

50 - OPINION AND ORDER
more than 1.8¢ for every hour that their employees worked during

2003. 

Every year Oregon publishes a new WBF assessment rate and

mails the information about the rate and a written notice to all

employers registered with the Oregon Secretary of State. The

record in this case reflects Oregon mailed the WBF assessmentrate notices to Defendant, and Defendant does not dispute it

received the notices. The record also reflects Defendant paid

the correct total amount of WBF assessments to the State of

Oregon during the relevant period, and the Court, therefore,

infers Defendant received the assessment rate notices from the

Oregon Secretary of State during that period.

As noted, however, the record reflects and Defendant

concedes it over-withheld WBF assessments from Plaintiffs and its

other Oregon employees during the relevant period. Defendant

also concedes its over-withholding of WBF assessments from its

Oregon employees is a wrongful deduction in violation of Oregon

Revised Statutes § 652.610(3). Plaintiffs, therefore, have

established Defendant violated § 652.610(3) when it improperly

over-withheld WBF funds from Plaintiffs and other class-member

employees throughout the relevant period. 

II. Penalty Wages under Oregon Revised Statutes § 652.150

Plaintiffs assert Defendant’s violation of § 652.610 was

willful, and, therefore, Plaintiffs are entitled to penalty wages

51 - OPINION AND ORDER
pursuant to Oregon Revised Statutes § 652.150. Defendant,

however, asserts its violation was not willful within the meaning

of § 652.150. 

A. The Law

Oregon Revised Statutes § 652.150(1) provides any

employer who “willfully fails to pay any wages or compensation of

any employee” must pay a penalty for nonpayment. Although the

statute does not define willful, “[t]he word wilful has a

particular meaning under Oregon law.” Nance v. May Trucking Co.,

No. 3:12-CV-01655-HZ, 2014 WL 2113094, at *4 (May 20, 2014). 

Specifically, 

[i]n civil cases the word wilful, as ordinarily

used in courts of law, 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. It amounts to nothing more than

this: That the person knows what he is doing,

intends to do what he is doing, and is a free

agent.

Id. (quoting Sabin v. Willamette–Western Corp., 276 Or. 1083,

1093 (1976)). “That definition excludes the individual who does

not know that his employee has left his employ or who has made an

unintentional miscalculation.” Wilson v. Smurfit Newsprint

Corp., 197 Or. App. 648, 660 (2005)(quotation omitted). 

Oregon courts have held “‘[a]n employer acts wilfully

if, having the financial ability to pay wages which he knows he

owes, fails to pay them. The statute was not intended to impose

52 - OPINION AND ORDER
liability where the employer's refusal to pay wages is based upon

a bona fide belief that he is not obligated to pay them.’” Id.

at 661 (quoting State ex rel Nilsen v. Lee, 251 Or. 284, 293

(1968)). In addition, “an employer lacks knowledge, and

therefore does not act willfully, if it has a good faith belief

that one of the elements necessary to trigger the obligation to

pay wages owed at termination is lacking.” Wilson, 197 Or. App.

at 661 (citing Hekker v. Sabre Constr. Co., 265 Or. 552, 561

(1973)).

In Sabin the defendant owed the plaintiff $500 for

unused vacation time when the plaintiff’s employment ended. The

defendant deducted an outstanding debt of the plaintiff from the

$500 believing it had the right to recoupment or set-off. The

Oregon Supreme Court ultimately concluded the defendant’s conduct

was “willful” and that the plaintiff was entitled to penalty

wages under § 652.150.

[W]e hold that there was sufficient evidence to

support the finding by the trial judge that

defendant's conduct was “wilful” for the purposes

of this statute. . . . [D]efendant . . .

wrongfully undertook to deduct as a matter of

“set-off” or “recoupment” the $91.62 from the

wages due to [the plaintiff] for that work.

Although defendant may not have acted with “malice

or wrong,” or with “perverseness or moral

delinquency,” we believe that the trial court

could reasonably infer from these facts that in

making the deduction of $91.62 defendant did not

make an “unintentional miscalculation”; but “knew

what he was doing, intended to do what he was

doing, and was a free agent” and that defendant

53 - OPINION AND ORDER
was a “careless employer,” so as to constitute a

“wilful” failure to pay the wages payable to

plaintiff within the meaning of ORS 652.150.

276 Or. at 1093–94. These cases 

establish that an action is willful if it is fully

knowing, intentional, and voluntary. Clearly, a

malicious action or one taken in bad faith

qualifies. Equally as clearly, an employer does

not act willfully if it acts without fully knowing

that the historical circumstances triggering the

obligation have occurred (for example, that the

employee has quit) or if it acts based on an

innocent miscalculation that is not careless.

Wilson, 197 Or. App. at 662–63.

B. Analysis

Defendant asserts its over-withholding of WBF

assessments was not willful because the record reflects

Defendant’s payroll software calculated the WBF deduction for

each hourly employee in Oregon during the relevant period. When

the software was initially programmed and put in place in 2003,

the WBF assessment was properly calculated. Beginning in 2004,

however, when the State of Oregon decreased the WBF assessment

rate, the employee portion of the assessment remained fixed at

the 2003 rate in Defendant’s computer system causing Defendant’s

portion of the assessment to decrease. Defendant refers to this

as a computer error and asserts it was an unintentional

miscalculation.

The record, however, reflects Defendant was aware of

the State of Oregon’s changes in the overall WBF assessment rate

54 - OPINION AND ORDER
and that Defendant’s corporate agents entered the changed overall

WBF assessment rate in Defendant’s computer system. Thus,

Defendant’s failure to adjust the employees’ assessment rate also

was not an unintentional miscalculation. Regardless whether

Defendant failed to review the employee withholding rate during

the relevant period or whether Defendant was unaware of its legal

requirement not to withhold more of the WBF assessment from

employees than from itself, Defendant’s failure makes Defendant

the kind of “careless employer” the Sabin court concluded

willfully violated Oregon’s wage-and-hour laws. 276 Or. at 1093. 

See also Elonis v. U.S., 135 S. Ct. 2001, 2009 (2015)(“The

familiar maxim ignorance of the law is no excuse typically holds

true. Instead, . . . 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].”)(quotation omitted).

The Court, therefore, concludes Defendant’s overwithholding of Plaintiffs’ WBF assessments was willful, and

Plaintiffs are entitled to penalty wages pursuant to § 652.150

constrained by the relevant statutory limitations periods for

penalties arising from the failure to pay minimum wages and

sufficient overtime. 

IV. Defendant’s Due-Process Rights

In its Response to Plaintiffs’ Motion for Partial Summary

55 - OPINION AND ORDER
Judgment on the Issue of Prima Facie Liability on Their Workers'

Benefit Fund Claims Defendant asserts the Court should limit

Plaintiffs’ “potential recovery of statutory damages to prevent

violations of [Defendant’s] due process rights.” Specifically,

Defendant asserts if the Court permits class members to recover

statutory penalties pursuant to § 652.150 in addition to those

permitted under § 652.615, the damages award would be

“potentially so disproportionate as to violate due process.” 

Def.’s Mot. at 8. For example, Defendant notes pursuant to its

expert report (with which Plaintiffs agree) a full-time employee

in 2008 who had WBF assessments over-withheld for the entire year

would have suffered an over-withholding of $8.32 for 2008. For

that WBF deduction violation the employee would be entitled to

$200 in penalties pursuant to § 652.615. The employee might also

be entitled to a 30-day penalty of $1,8724 for the employer’s

failure to pay minimum wages or a 30-day penalty of $1,872 if the

deduction resulted in insufficient payment of overtime.5 Thus,

4 This assumes a minimum wage of $7.80 per hour x 8 hours of

work x 30 days.

5 In the example in its Motion for Summary Judgment No. 3

Defendant hypothesizes an employee could receive penalty wages

for both overtime and minimum-wage violations. As noted,

however, Plaintiffs concede they are not entitled to both

overtime and minimum-wage violation penalties for insufficient

overtime or failures to pay minimum wages that result from the

same underlying violation: over-withholding of WBF funds. The

Court, therefore, uses only one 30-day penalty in its

calculations.

56 - OPINION AND ORDER
according to Defendant, a class-member employee’s remedy could be

as much as 249 times the WBF over-deduction. Even assuming an

employee who worked for Defendant from August 13, 2007, through 

September 30, 2011, and had WBF assessments wrongfully overwithheld, the amount of the wrongful over-withholding would be

$22.28 and, according to Defendant’s expert, that employee’s

potential remedy could be as much as 93 times as much as the WBF

over-withholding. 

Defendant points out that the Supreme Court has found dueprocess concerns may be implicated when statutory damages or

penalty provisions are excessively disproportionate to actual

damages. In particular, Defendant cites Missouri Pacific Railway

Company v. Tucker, 230 U.S. 340, 351 (1913), in which the Court

found a $500 liquidated-damages award for a $3.00 overcharge was

“grossly out of proportion to the possible actual damages” and so

“arbitrary and oppressive” as to violate the defendants'

due-process rights, and Southwest Telephone & Telegraph v.

Danaher, 238 U.S. 482, 491 (1915), in which the Court concluded a

$6,300 statutory-damage award to a plaintiff whose telephone

service was cut off for late payment violated the defendant's

due-process rights. 

The Court notes, however, that the Supreme Court has also

held there are factors that militate against finding a verdict is

excessive, including the “interests of the public.” See St.

57 - OPINION AND ORDER
Louis, Iron Mountain & S. Ry. Co. v. Williams, 251 U.S. 63, 67

(1919)(finding a $75 penalty for overcharging a passenger 66

cents for a train fare to be permissible “[w]hen it is considered

with due regard to the public interest, the numberless

opportunities for committing the offense, and the need for

securing uniform adherence to established passenger rates.”).

Although due-process concerns may possibly be implicated

here, the Court finds Defendant has not sufficiently developed

the record on this Motion to resolve whether specific awards of

penalty wages under § 652.150 would violate Defendant’s dueprocess rights with respect to the WBF claims. Moreover, the

Court notes Plaintiffs did not seek a specific sum of damages in

this Motion and Defendant’s reliance on hypothetical employees is

insufficient in any event to resolve the damages issues

conclusively. Defendant has not established more than a

hypothetical basis on which the Court could deny Plaintiffs’

Motion because of due-process concerns, and that is not

sufficient to defeat Plaintiffs’ Motion for a finding of prima

facie liability on their WBF claims. See F.T.C. v. Stefanchik,

559 F.3d 924, 929 (9th Cir. 2009)("A non-movant's bald assertions

or a mere scintilla of evidence in his favor are both

insufficient to withstand summary judgment."). 

V. Summary

In summary, the Court concludes Plaintiffs have established

58 - OPINION AND ORDER
Defendant over-withheld WBF assessments, Plaintiffs’ WBF claims

are not barred by tax law, and Defendant’s over-withholding of

WBF assessments was willful. The Court also concludes Defendant

has failed to establish a dispute of material fact exists

precluding partial summary judgment in Plaintiffs’ favor on these

liability issues. 

The Court, therefore, GRANTS Plaintiffs’ Motion (#172) for

Partial Summary Judgment on the Issue of Prima Facie Liability on

Their Workers' Benefit Fund Claims.

PLAINTIFFS’ MOTIONS (#173, #179, #180, #181)

RELATED TO THEIR SHOE CLAIMS

Plaintiffs bring a number of Motions for Summary Judgment

related to their Shoe Claims:

1. Motion (#173) for Partial Summary Judgment on the Issue

of Prima Facie Liability on Their Shoe Claims,

2. Motion (#179) for Partial Summary Judgment on Jack in

the Box’s Third Affirmative Defense (Authorized

Deductions),

3. Motion (#180) for Partial Summary Judgment on Jack in

the Box’s Fourth Affirmative Defense (Benefit to

Employees), and

4. Motion (#181) for Partial Summary Judgment on Jack in

the Box’s Fifth Affirmative Defense (Valid Deduction).

The Court addresses these Motions together as they present

59 - OPINION AND ORDER
Defendant’s Affirmative Defenses related to Plaintiffs’ Shoe

Claims.

In their Shoe Claims Plaintiffs allege Defendant unlawfully

deducted money from Plaintiffs and other Oregon employees for

non-slip shoes. Defendant asserts in its Third Affirmative

Defense that Plaintiffs’ Shoe Claims “fail in whole or in part

because Plaintiffs authorized any and all payroll deductions for

employee shoe purchases,” in its Fourth Affirmative Defense that

Plaintiffs’ Shoe Claims fail “in whole or in part because payroll

deductions for shoe purchases were for Plaintiffs’ benefit,” and

in its Fifth Affirmative Defense that Plaintiffs’ Shoe Claims

“fail in whole or in part because payroll deductions for shoe

purchases were compliant with ORS 652.610(3).”6 Def.’s Answer at

¶¶ 78, 79, 80 respectively.

In their Motion for Partial Summary Judgment on the Issue of

Prima Facie Liability on Their Shoe Claims Plaintiffs assert

Defendant wrongfully deducted the cost of non-slip shoes from

Plaintiffs and other Oregon employees because non-slip shoes were

part of the employees’ uniform and/or were another “item required

by the employer to be worn . . . by the employee as a condition

of employment.” Or. Admin. R. 839-020-0020(7). 

6 It is not entirely clear in Defendant’s Answer or its

Responses to Plaintiffs’ Motions for Summary Judgment which

provision of Oregon Revised Statutes § 652.610(3) it relies on

for its Affirmative Defenses, but it appears likely that

Defendant relies on § 652.610(b) and/or (c).

60 - OPINION AND ORDER
In their Motion for Partial Summary Judgment on Jack in the

Box’s Third Affirmative Defense (Authorized Deductions), Motion

for Partial Summary Judgment on Jack in the Box’s Fourth

Affirmative Defense (Benefit to Employees), and Motion for

Partial Summary Judgment on Jack in the Box’s Fifth Affirmative

Defense (Valid Deduction) Plaintiffs assert the shoe deductions

were not for the private benefit of employees within the meaning

of Oregon Revised Statutes § 653.035(1), that Defendant has not

established the shoe deductions were voluntarily authorized in

writing by Plaintiffs and other employees, that the non-slip

shoes were not for the benefit of employees within the meaning of

Oregon Revised Statutes § 652.610(3)(b), and that Defendant has

not established it was not the ultimate recipient of the money

withheld.

For the reasons that follow, the Court DENIES Plaintiffs’

Motion (#173) for Partial Summary Judgment on the Issue of Prima

Facie Liability on Their Shoe Claims and GRANTS in part and

DENIES in part Plaintiffs’ Motion (#179) for Partial Summary

Judgment on Jack in the Box’s Third Affirmative Defense

(Authorized Deductions), Plaintiffs’ Motion (#180) for Partial

Summary Judgment on Jack in the Box’s Fourth Affirmative Defense

(Benefit to Employees), and Plaintiffs’ Motion (#181) for Partial

Summary Judgment on Jack in the Box’s Fifth Affirmative Defense

(Valid Deduction).

61 - OPINION AND ORDER
I. Deductions from Employees’ Wages Permitted under Oregon Law

Oregon Administrative Rules 839-020-0020(3) and (7) provide:

Employers may not deduct the cost of any of the

following items from [an employee’s] minimum wage:

* * *

(3) Uniforms, including but not limited to,

garments such as suits, dresses, aprons, and

all other garments whatsoever as worn by the

employees as a condition of employment. Such

apparel of a similar design, color, or

material or forming part of the decorative

pattern of the establishment or

distinguishing the employee as an employee of

the concern is presumed to be worn as a

condition of employment.

* * *

(7) Any other item required by the employer

to be worn or used by the employee as a

condition of employment.

Employers, however, may deduct from an employee’s minimum wage

“[t]he fair market value of . . . facilities or services

furnished by the employer to the employee for the private benefit

of the employee.” Or. Rev. Stat. § 653.035(1). Emphasis added. 

Oregon Administrative Rule 839–020–0025(7) provides: 

[F]acilities or services are furnished for the

private benefit of the employee when such . . . .

facilities or services are not required by the

employer. For purposes of this rule, lodging or

other facilities or services are required by the

employer when:

(a) Acceptance of the lodging or other facilities

is a condition of the employee's employment; or

* * *

62 - OPINION AND ORDER
(c) The acceptance of the lodging or other

facilities or services is involuntary or coerced.

Oregon Revised Statutes § 652.610(3) provides:

(3) An employer may not withhold, deduct or divert

any portion of an employee's wages unless:

(b) The deductions are voluntarily authorized

in writing by the employee, are for the

employee's benefit and are recorded in the

employer's books;

(c) The employee has voluntarily signed an

authorization for a deduction for any other

item, provided that the ultimate recipient of

the money withheld is not the employer and

that the deduction is recorded in the

employer's books.

II. Uniforms

As noted, Plaintiffs assert non-slip shoes were part of the

employees’ uniform or another “item required by [Defendant] to be

worn . . . as a condition of employment,” and, therefore,

Defendant was not permitted to deduct payments for non-slip shoes

from the paychecks of Plaintiffs and other Oregon employees.

A. Facts

It is undisputed that during the relevant period

Defendant’s employees were required to wear non-slip footwear

while working. It is also undisputed that during the relevant

period Defendant offered a program through which employees could

purchase non-slip shoes from a company called Shoes for Crews

through a payroll deduction. The parties dispute whether

employees were required to wear shoes from Shoes for Crews or

63 - OPINION AND ORDER
whether they could wear some other brand of non-slip shoe or nonslip shoe guards.

Plaintiffs rely on the testimony of Donna Basham, a

coach with Defendant during some part of the relevant period, to

support their assertion that Defendant’s employees were required

to wear shoes from Shoes for Crews and could not wear shoe guards

long-term. Basham testified at deposition that when she began

working for Defendant there was not any requirement that

employees wear a particular brand of non-slip shoe, but at some

point “after 2000” Defendant’s policy changed and employees were

required to wear shoes from Shoes for Crews. Decl. of John Egan,

Ex. 10 at 3. Basham states restaurant managers would “check to

make sure that all the employees wore Shoes for Crews” shoes. 

Id. at 6. Basham, however, stated restaurants also “had shoe

guards too” at each restaurant for employees who were “first

starting” and had not ordered shoes from Shoes for Crews. Id. 

Basham noted the employees were told “eventually they have to buy

the Shoes for Crews” shoes and “they’re not supposed to [wear the

shoe guards permanently] but . . . if they hired someone that 

. . . couldn’t [buy shoes from Shoes for Crews], they would let

them wear [the shoe guards] until they could” purchase shoes from

Shoes for Crews. Id. at 7. Plaintiff Nicole Gessele testified

“everybody [or] whoever was in management” told her that she had

to wear shoes from Shoes for Crews at work. Parker Decl., Ex. C

64 - OPINION AND ORDER
at 6. Plaintiff Tricia Tetrault also testified she was told by

“[e]very manager when [she] would start - when [she] got rehired

[at Jack in the Box]” that she had to order and to wear shoes

from Shoes for Crews. Parker Decl., Ex. E at 9. Tetrault stated

she asked a manager at one point whether she could buy non-slip

shoes from Payless because they were less expensive, and she was

told she had to purchase her shoes from Shoes for Crews. Id. In

addition, she was told by her manager that she could only wear

the shoe guards until she received her order from Shoes for

Crews. Id. at 10. 

Plaintiffs also point out that the scripts for

Defendant’s “Crew On-Boarding” computer-based training modules

advised employees that they were “required to wear approved slip

resistant footwear” and showed a picture of employees wearing

shoes from Shoes for Crews. Egan Decl., Exs. 22-23. In

addition, the materials for Defendant’s Managing Safety Course

for Managers included a scenario in which an employee is injured

and the trainees were required to answer questions such as

whether the fictional injured employee was wearing shoes from

Shoes for Crews. Similarly, the Manager’s Incident Report of

Employee Injury form included the question whether the injured

employee was wearing shoes from Shoes for Crews. Nevertheless,

Defendant asserts employees were not “required” to wear shoes

from Shoes for Crews. 

65 - OPINION AND ORDER
Defendant relies on the testimony of Plaintiff

Christina Mauldin, who stated at deposition that during her time

working for Defendant she ordered shoes from Shoes for Crews but

also from Keuka, a different company that made non-slip shoes. 

Decl. of Douglas Parker, Ex. D at 19. In addition, Gene James,

Defendant’s Director of Asset Protection, testified at deposition

that Defendant’s employees could purchase shoes from Footstar or

Keuka. Parker Decl., Ex. G at 2. James also testified it was

“not the intent of the [non-slip shoe] policy or the program that

[Defendant] developed” for employees to be “told that they need

to purchase Shoes for Crews, that they can’t wear the shoe guards

forever.” Id. at 2-3. Defendant also notes its Dress and

Grooming Guide required non-slip shoes and that “shoes may be

purchased from a Jack in the Box approved vendor, such as Shoes

for Crews.” Decl. of Susan Pettijohn, Ex. DD at 1. 

The Court notes, however, that the record reflects the

Dress and Grooming Guide does not include ordering information

for any company offering non-slip shoes other than shoes from

Shoes for Crews. In addition, in the section advising managers

about “things to do,” the Dress and Grooming Guide states: 

“[K]eep a supply of [Shoes for] Crews Program order forms and

brochures.” Id. at 8. 

The parties do not dispute Defendant’s employees could

wear their non-slip shoes outside of work. For example,

66 - OPINION AND ORDER
Plaintiffs Ashley Gessele, Jessica Gessele, Nicole Gessele, and

Tricia Tetrault testified at deposition that they could wear

their shoes from Shoes for Crews outside of work, but they did

not do so because the non-slip sole would wear out more quickly. 

Parker Decl., Ex. A at 7, Ex. B at 14, Ex. C at 6, Ex. E at 10. 

B. Non-Slip Shoes as Part of Employees’ Uniforms

Defendant asserts in its Response to Plaintiffs’ Motion

for Partial Summary Judgment on the Issue of Prima Facie

Liability on Their Shoe Claims that shoes from Shoes for Crews

were not part of their employees’ uniform. Defendant asserts

federal agencies such as the United States Department of Labor

(DOL) and the federal Occupational Health and Safety Organization

(OSHA) have made clear that non-slip shoes are not a “uniform”

under the Fair Labor Standards Act (FLSA). Defendant notes DOL

Wage and Hour Opinion Letter FLSA 2008-4 (May 15, 2008) concluded

requiring employees to wear a certain type of footwear does not

make such footwear a uniform within the meaning of the FLSA. 

Gessele I, Docket No. 125-5 at 82. 

Defendant contends the DOL Opinion Letter applies to

the circumstances here. When the DOL issued that opinion,

however, it assumed the following facts:

The Employer operates restaurants and requires

employees to wear “dark-colored” shoes without

prescribing any particular quality, brand, style,

model, or type. Aside from color, the only other

requirements are that they not be open-toed and

that, for safety reasons, they not have a slippery

67 - OPINION AND ORDER
sole. Employees may wear shoes they already own

when hired or may purchase shoes from any vendor

they may choose. Employees are free to wear the

shoes outside of work.

Id. The DOL also noted the following general principles when

determining whether an item of clothing is part of a uniform:

If an employer merely prescribes a general type of

ordinary basic street clothing to be worn while

working and permits variations in details of

dress, the garments chosen by the employees would

not be considered to be uniforms.

On the other hand, where the employer does

prescribe a specific type and style of clothing to

be worn at work, e.g. where a restaurant or hotel

requires a tuxedo or a skirt and blouse or jacket

of a specific or distinctive style, color, or

quality, such clothing would be considered

uniforms.

Id. at 1-2. Notably, the record here reflects there are disputes

of fact as to whether Defendant permitted employees to wear shoes

that they already owned when they were hired and whether

Defendant required employees to wear “any particular . . . brand”

of non-slip shoe (i.e., Shoes for Crews). The DOL Opinion

Letter, therefore, is not dispositive of the uniform issue in

this case.

Although Plaintiffs note under Oregon Administrative

Rule 839-020-0020(7) employers are not permitted to deduct from

employees’ wages another category of expense that is not included 

68 - OPINION AND ORDER
in the FLSA or other federal agency definitions of uniform,7 the

parties do not cite nor could this Court find any case in which a

court has analyzed this provision of the Oregon Administrative

Rules. The Court, nevertheless, finds the meaning of this

provision is plain on its face: When an employer requires an

employee to wear or to use an item as a condition of employment,

the employer may not deduct the cost of that item from the

employees’ minimum wage unless an exception applies. 

Here it is undisputed that Defendant required its

employees to wear non-slip shoes (whether from Shoes for Crews or

another brand). Thus, the Court concludes pursuant to Oregon

Administrative Rule 839-020-0020(7) that the cost of non-slip

shoes (whether from Shoes for Crews or another brand) are an item

that Defendant was not allowed to deduct from Plaintiffs or other

Oregon employees unless an exception applied as set out in Oregon

Revised Statutes § 653.035 or § 652.610(3).

III. Exceptions Permitting Deductions

As noted, in its Third, Fourth, and Fifth Affirmative

Defenses Defendant asserts various exceptions to the prohibition

on employers deducting the cost of uniforms or “other item[s]

required by the employer to be worn or used by the employee as a

7 Specifically, Oregon Administrative Rule 839-020-0020(7)

provides an employer may not deduct from an employee’s wages

“[a]ny other item required by the employer to be worn or used by

the employee as a condition of employment.” 

69 - OPINION AND ORDER
condition of employment” apply in this case. Specifically,

Defendant asserts the non-slip shoes were for the private benefit

of its employees within the meaning of Oregon Revised Statutes 

§ 653.035(1) and/or Defendant satisfied the requirements of the

exceptions found in Oregon Revised Statutes § 652.610(3)(b) 

and (c).

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

In its Fourth Affirmative Defense Defendant alleges

Plaintiffs’ Shoe Claims fail “in whole or in part because payroll

deductions for shoe purchases were for Plaintiffs’ benefit.” In

their Motion for Partial Summary Judgment on Jack in the Box’s

Fourth Affirmative Defense (Benefit to Employees) Plaintiffs

assert they are entitled to summary judgment to the extent

Defendant asserts in its Fourth Affirmative Defense that the shoe

deductions were for employees’ private benefit under Oregon

Revised Statutes § 653.035(1). 

Oregon Revised Statutes § 653.035(1) authorizes an

exception to Oregon Administrative Rule 839-020-0020(7) and

provides employers may deduct from an employee’s minimum wage

“[t]he fair market value of . . . facilities or services

furnished by the employer to the employee for the private benefit

of the employee.” Oregon Administrative Rule 839-020-0025(7)

defines items to be of “private benefit” to an employee when they

are “not required by an employer.” 

70 - OPINION AND ORDER
For purposes of Oregon Administrative Rule 839-020-

0025(7), items are required by an employer when, among other

things, “[a]cceptance of the . . . facilities or services is a

condition of the employee’s employment.” As noted, it is

undisputed that Defendant’s employees were required to wear nonslip shoes as a condition of employment (whether from Shoes for

Crews or another brand), and, therefore, the Court concludes the

non-slip shoes were not for the “private benefit” of employees

within the meaning of Oregon Revised Statutes § 653.035(1) as

defined in Oregon Administrative Rule 839-020-0025. Oregon

Revised Statutes § 653.035(1), therefore, does not provide an

exception that authorizes Defendant to withhold payments for nonslip shoes from Plaintiffs and other employees.

Accordingly, the Court GRANTS in part Plaintiffs’

Motion (#180) for Partial Summary Judgment on Jack in the Box’s

Fourth Affirmative Defense (Benefit to Employees) to the extent

that Defendant asserts the shoe deductions were for Plaintiffs’

private benefit pursuant to § 653.035(1). 

B. Exceptions under Oregon Revised Statutes 

§ 652.610(3)(b)

As noted, Oregon Revised Statutes § 652.610(3)(b)

permits employers to deduct items from employees’ wages even when

they are “other item[s] required by the employer to be worn or

used by the employee as a condition of employment . . . [if the]

deductions are voluntarily authorized in writing by the employee,

71 - OPINION AND ORDER
are for the employee's benefit and are recorded in the employer's

books.”

In its Third, Fourth, and Fifth Affirmative Defenses

Defendant asserts the exceptions to the prohibition on deducting

from employees’ minimum wages the cost of “other item[s] required

by the employer to be worn or used by the employee as a condition

of employment” found in § 652.610(3)(b) permitted Defendant to

deduct the shoe payments from its employees’ wages. 

Plaintiffs, in turn, assert in their Motion for Partial

Summary Judgment on Jack in the Box’s Third Affirmative Defense

(Authorized Deductions), Motion for Partial Summary Judgment on

Jack in the Box’s Fourth Affirmative Defense (Benefit to

Employees), and Motion for Partial Summary Judgment on Jack in

the Box’s Fifth Affirmative Defense (Valid Deduction) that

Defendant has not established the shoe deductions were

voluntarily authorized in writing by Plaintiffs and other

employees or that the non-slip shoes were for the benefit of

employees within the meaning of Oregon Revised Statutes 

§ 652.610(3)(b), and, therefore, the exceptions in Oregon Revised

Statutes § 652.610(3)(b) do not apply.

1. Defendant’s Affirmative Defenses Related to Oregon

Revised Statutes § 652.610(3)(b)

As noted, pursuant to Oregon Revised Statutes 

§ 652.610(3)(b) an employer may deduct funds from employees’

wages when the “deductions are voluntarily authorized in writing

72 - OPINION AND ORDER
by the employee, are for the employee's benefit and are recorded

in the employer's books.”

Plaintiffs do not dispute Defendant recorded the

shoe deductions in its books. Plaintiffs, however, assert

Defendant cannot establish the shoe deductions were for the

employees’ benefit within the meaning of § 652.610(3)(b) or that

Plaintiffs and other Oregon employees authorized the shoe

deductions in writing. 

Defendant asserts in its Fourth Affirmative

Defense that the deductions for shoes from Shoes for Crews were

for its employees’ benefit. Defendant also asserts in its Third

and Fifth Affirmative Defenses that its employees authorized the

deductions for shoes from Shoes for Crews in writing. 

a. Benefit to Employee under § 652.610(3)(b)

Plaintiffs assert Defendant cannot establish

the deduction for shoes from Shoes for Crews was for the Oregon

employees’ benefit within the meaning of § 652.610(3)(b). 

Specifically, Plaintiffs assert the provision “for the employee’s

benefit” indicates the deduction must be for something that is

solely for the benefit of the employee. Defendant, on the other

hand, asserts an item is “for the employee’s benefit” if it is of

some benefit to the employee even if it also benefits the

employer.

According to Defendant, the payroll deduction

73 - OPINION AND ORDER
was for the employees’ benefit because it “was convenient and the

prices were good, especially considering the large discount

offered them.” Def.’s Resp. (#191) at 7. The Court notes

Defendant does not cite any authority for its assertion that the

relevant inquiry is whether an employee’s ability to pay for an

item via a payroll deduction is the focus of § 652.610(3)(b).

i. Preliminary Matter

As a preliminary matter the parties

dispute the relevant inquiry for evaluating whether the deduction

at issue must be solely for the benefit of the employee. 

Defendant asserts the relevant inquiry is whether the method of

deducting the cost of the shoes (i.e., the payroll deduction

program) benefitted employees. Plaintiffs assert the relevant

inquiry is whether the requirement to purchase non-slip shoes

benefitted the employees rather than whether the method of

deducting the cost of the shoes benefitted employees. 

The few courts that have discussed 

§ 652.610(3)(b) support Plaintiffs’ position. For example, in

Wilson v. Decibels of Oregon, Incorporated, the plaintiff

asserted the defendant improperly deducted the cost of a cellular

telephone from the plaintiff’s wages in violation of 

§ 652.610(3)(b). No. 1:16–cv–00855–CL, 2017 WL 4837199 (D. Or.

Sept. 11, 2017). The court evaluated whether the cellular

telephone for which the plaintiff was charged was for the benefit

74 - OPINION AND ORDER
of the plaintiff rather than whether the deduction of the cost of

the cellular telephone was for the benefit of the plaintiff. 

Id., at *15. Similarly, in Nance v. May Trucking Company the

plaintiff asserted the defendant wrongfully deducted funds from

his paycheck for excessive “idling time” for his truck in

violation of § 652.610(3)(b). No. 3:12–cv–01655–HZ, 2014 WL

2113094 (D. Or. May 20, 2014). The court evaluated whether

employees idled trucks for their own benefit or for the benefit

of their employer. Id., at *3. 

The Court finds the reasoning in these 

cases to be persuasive and concludes the relevant inquiry under 

§ 652.610(3)(b) is whether the required non-slip shoe purchase

program was for the benefit of Defendant’s employees.

ii. Whether the Benefit Must Be Solely for the 

Employee

As noted, Defendant asserts an item is “for

the employee’s benefit” under § 652.610(3)(b) even if it also

benefits the employer. Plaintiffs, on the other hand, assert

“for the employee’s benefit” under § 652.610(3)(b) means the item

must be solely for the benefit of the employee. Plaintiffs rely

on Taylor v. Werner Enterprises, Incorporated, and Smith v.

Woodward to support their assertion. 

In Taylor the plaintiff was employed by

defendant as a truck driver. The plaintiff signed an agreement

at the start of his employment that authorized the defendant “to

75 - OPINION AND ORDER
withhold $10 per week from his wages as a bond, until a total of

$400 had been withheld . . . [and] that the bond would be

refunded approximately 60 days after plaintiff's employment

ended, as long as there were no claims against the bond.” 329

Or. 461, 463–64, (1999). In March 1995 the plaintiff stopped

working for the defendant. The defendant did not refund the $400

bond to the plaintiff until May 1995. The plaintiff alleged the

defendant violated § 652.610(3)(b) when it withheld the bond

funds. The court concluded the defendant violated 

§ 652.610(3)(b) on the ground that a deduction under that

provision “must be for the ultimate benefit of the employee. 

Potential liability of an employee to the employer is not a

reason that supports a lawful deduction.” Id. at 470. There is

not any indication in Taylor, however, that the defendantemployer asserted the bond was of any benefit to the plaintiffemployee. 

In Smith the defendants deducted from

the plaintiff’s wages some of the defendant’s payroll costs,

including “the employer's portion of FICA and its worker's

compensation premiums for” the plaintiff. No. CV-02-547-ST, 2003

WL 23537985, at *7 (D. Or. Sept. 30, 2003). The plaintiff

brought an action alleging the defendant violated § 652.610(3)(b)

when it made those deductions. The court concluded the defendant

violated § 652.610(3)(b) because that “exception[] require[s]

76 - OPINION AND ORDER
that the deduction benefit the employee, not the employer. Here

the deduction benefitted defendants by shifting their payroll

costs to [the plaintiff].” Id. Again, however, the defendant

did not assert the deductions for its portion of FICA and

worker’s compensation premiums also benefitted the plaintiff. 

As noted, however, in Wilson v. Decibels

of Oregon the parties disagreed as to whether the deduction at

issue was for an item for the employee’s benefit. In that case

the defendant required its technicians to have a company cellular

telephone in order to “respond to customer and dispatch calls.” 

2017 WL 4837199, at *4. Technicians were provided with a

cellular telephone by the defendant and given the option to use

it only for company business or to use the telephone for personal

as well as company business. When a technician chose to use the

cellular telephone for business and personal purposes, the

defendant deducted $35 per month for the cost of the cellular

telephone from the technician’s paycheck, which “represent[ed] a

portion of [the defendant’s] total cost, which [was] in excess of

$50 per month per phone.” Id. The plaintiff, a technician who

used the company-provided cellular telephone for personal and

business purposes, signed a form authorizing the defendant to

deduct the $35 per month cost from the plaintiff’s wages. The

plaintiff ultimately left the defendant’s employ and brought an

action alleging the defendant violated § 652.610(3)(b) when it

77 - OPINION AND ORDER
deducted the $35 per month from the plaintiff’s wages for the

cellular telephone. The plaintiff asserted “the cell phone was

not for his benefit but instead for [the defendant], as it was

necessary for the performance of [the defendant’s] business and

the position as an installation Technician.” Id., at *15. The

court concluded the cellular telephone was for the plaintiff’s

benefit because even though technicians were required to have

cellular telephones, the plaintiff also used the cellular

telephone for personal purposes and “received his phone at a

discounted price.” Id.

The Court finds the Wilson court’s holding is

pertinent to the Oregon Legislature’s use of the phrase “the

employee’s benefit” in § 652.610(3)(b). In contrast, Oregon

Revised Statutes § 653.035(1) authorizes employers to deduct

“facilities or services furnished by the employer to the employee

for the private benefit of the employee.” Emphasis added. Thus,

the Court concludes the Oregon Legislature has demonstrated it

can indicate when an item must be solely for the benefit of an

employee as in § 653.035(1) and when it may benefit both the

employee and the employer as in § 652.610(3)(b).

Here the record reflects employees were

permitted to wear their shoes from Shoes for Crews outside of

work and to take them when they left Defendant’s employ. In

addition, employees were able to purchase shoes from Shoes for

78 - OPINION AND ORDER
Crews at a discount. On this record, therefore, the Court

concludes the shoe deduction was for the employees’ benefit

within the meaning of § 652.610(3)(b).

Accordingly, the Court DENIES in part

Plaintiffs’ Motion (#180) for Summary Judgment on Defendant’s

Fourth Affirmative Defense (Benefit to Employees) to the extent

that defense is premised on an exception for an employee-benefit

deduction pursuant to § 652.610(3)(b).

b. Written Authorization

As noted, Defendant asserts it obtained

written authorization for the shoe deductions from Plaintiffs and

other Oregon employees. 

1. Spoliation Issue

Defendant asserts in its Responses to

Plaintiffs’ Motion for Partial Summary Judgment on Jack in the

Box’s Third Affirmative Defense (Authorized Deductions) and

Plaintiffs’ Motion for Partial Summary Judgment on Jack in the

Box’s Fifth Affirmative Defense (Valid Deduction) that it

obtained written authorizations for the shoe deductions from

Plaintiffs and other Oregon employees. Defendant, however,

concedes it does not have copies of any of the written

authorizations because all of Defendant’s paperwork was destroyed

during the “franchise transition.” Decl. of Jon Egan, Ex. 5 at

2. Specifically, Jeffrey Tennant testified at deposition:

79 - OPINION AND ORDER
On the day of the [franchise]

transitions we were directed to ensure

that company things from the

[restaurant] were thrown out, as far the

as e-mail programs and such, wiping

those clean, to make sure there was no

information that should be given to the

franchisee. Their employment was being

terminated with us and that none of

those files were public and that the

files transition to the new company they

were being hired on by the new company. 

Egan Decl., Ex. 5 at 2. In any event, the record reflects the

authorizations from all of Defendant’s Oregon locations were

destroyed at various times before September 30, 2011.

The Ninth Circuit has explained a

court’s inherent authority to impose sanctions for destruction of

evidence as follows:

“A federal trial court has the inherent

discretionary power to make appropriate

evidentiary rulings in response to the

destruction or spoliation of relevant

evidence.” Glover v. BIC Corp., 6 F.3d

1318, 1329 (9th Cir. 1993). This power

includes the power to sanction the

responsible party by instructing the

jury that it may infer that the spoiled

or destroyed evidence would have been

unfavorable to the responsible party. 

Id.; Akiona v. United States, 938 F.2d

158, 161 (9th Cir. 1991). 

Med. Lab. Mgmt. Consultants v. Am. Broad. Co., Inc., 306 F.3d

806, 824 (9th Cir. 2002)(emphasis added). See also Ingham v.

United States, 167 F.3d 1240, 1246 (9th Cir. 1999)(“To be

actionable, the spoliation of evidence must damage the right of a

party to bring an action.”).

80 - OPINION AND ORDER
According to Plaintiffs, the Court

should exercise its inherent power to sanction Defendant for

failing to preserve the written authorizations because

Defendant’s actions constitute destruction of material evidence. 

Specifically, Plaintiffs request the Court to presume under the

circumstances that Defendant did not, in fact, obtain any written

authorizations from employees to deduct the cost of shoes.

Defendant, however, asserts the written

authorizations for the shoe deductions destroyed during the

franchise transition would have supported its Affirmative

Defenses as to its liability for the payroll deductions. Thus,

according to Defendant, preservation of the written

authorizations would have been helpful to Defendant, and,

therefore, the spoliation doctrine is inapplicable. 

On this record the Court concludes the

written authorizations for shoe deductions would have been

helpful to Defendant’s Affirmative Defenses. Thus, the Court

concludes the destruction of any such written authorizations

harmed Defendant’s ability to prove that it complied with the

requirements of § 652.610(3). The Court, therefore, concludes

the spoliation doctrine is not applicable under these

circumstances, and the Court declines to infer that Defendant

never obtained any written authorizations for shoe deductions.

81 - OPINION AND ORDER
2. Evidence of Written Authorizations

Due to the destruction of written

authorizations, Defendant relies on Plaintiffs’ deposition

testimony and the testimony of various employees to support its

assertion that it obtained written authorizations for the shoe

deductions. Specifically, Ashley Gessele testified she filled

out an order form for each pair of shoes she ordered from Shoes

for Crews that contained the following statement: “I do hereby

authorize the company to deduct the balance owed on my shoe

purchase following the payroll department’s receipt of the Shoes

For Crews invoice.” Ashley Gessele stated she understood when

she was filling out the order form that she was “authorizing

[Defendant] to deduct the balance owed on the shoe purchase from

[her] payroll.” Parker Decl., Ex. A at 11.

Nicole Gessele testified she ordered

shoes from Shoes for Crews from a catalogue that contained an

order form with the same authorizing language. Nicole Gessele,

however, could not remember whether she filled out the order form

that contained the authorization to deduct the balance from her

wages or whether she “just called [her order] in over the phone.” 

Parker Decl., Ex. C at 8. Nicole Gessele stated she

“underst[ood] that . . . in making these orders [she was]

authorizing [Defendant] to make that deduction,” but she was not

sure she provided that authorization in writing. Id.

82 - OPINION AND ORDER
Tricia Tetrault testified she ordered

shoes from Shoes for Crews through a catalogue that contained an

order form authorizing Defendant to deduct the cost of the shoes

from her wages. Tetrault testified she understood “in ordering

Shoes for Crews and possibly filling out one of these

[authorization] forms, that [she was] authorizing [Defendant] to

deduct the amount that the shoes cost from [her] paychecks,” but

she could not remember whether she had ever filled out an order

form with the authorization. Parker Decl., Ex. E at 11.

Jeffrey Tennant testified in his

Declaration that when he was a restaurant manager for Defendant,

“a superior” instructed him to have employees fill out the Shoes

for Crews order form that included an authorization to deduct the

cost of the shoes from the employee’s wages. Parker Decl., Ex. J

at 3.

Patty Jones stated when she was a

restaurant manager “[s]ome of my employees, but not all, filled

out the order forms and I would use that form to order shoes. 

Usually the graveyard employees filled out the order forms.” 

Decl. of Patty Jones at ¶ 12.

Ryan Leach testified in his Declaration:

As a manager I helped many

employees order shoes by calling

Shoes for Crews if that is the shoe

they wanted. I told new employees

that they could buy shoes through

payroll deduction and I explained

83 - OPINION AND ORDER
how that worked or they could buy

shoes on their own. It didn’t

matter to me. 

We regularly received catalogs from

Shoes for Crews that had order

forms in them. Some of my

employees would fill out the order

form and I would use that form to

place the shoe order. I usually

kept that order form on file with

other paperwork until the quarter

rolled over.

Decl. of Ryan Leach at ¶¶ 11-12.

Vincent O’Rourke stated in his

Declaration: “At the restaurants I managed, we regularly

received catalogs from Shoes for Crews and Keuka, two shoe

vendors. These catalogs included order forms [with the payroll

deduction authorization] . . . . Employees often filled out the

order forms before ordering shoes. They gave me the filled out

form and I placed the order.” Decl. of Vincent O’Rourke at 

¶¶ 7-8.

The record also includes evidence that

some employees never filled out the order form that included the

authorization. For example, Jessica Gessele testified: “I know

there [were] order forms available, but nobody ever used them

. . . . I don’t ever remember filling one out. . . . I never --

I personally never have seen anybody use an order form, to put it

in better words.” Parker Decl., Ex. B at 12. Jessica Gessele

explained she would tell her manager which Shoes for Crews shoes

84 - OPINION AND ORDER
she wanted, and her manager would order them. Later in her

employment with Defendant, Jessica Gessele ordered shoes for

other employees. When she did so, her process was to “ask[] them

for their Social Security number, and they would write down their

Social Security number and the style of shoes they want, and I

would call it in” to Shoes for Crews. Id. Similarly, Christina

Mauldin testified she did not remember ever filling out an order

form for shoes from Shoes for Crews. In addition, when she was a

team leader she would order shoes for other employees as follows: 

“The employee would write down their Social Security number. And

we would just call Shoes for Crews, put in a payroll order. They

would give them the shoe size and the style number, and they

would be shipped to the [restaurant].” Parker Decl., Ex. D at

14. Jennifer Barker stated in her Declaration that she, a team

leader, or an assistant manager “ordered shoes over the phone for

employees. I explained to employees that the shoes would be paid

for by payroll deductions. Occasionally an employee would fill

out the order form that came with the catalog sent to the

restaurant.” Decl. of Jennifer Barker at ¶ 12.

As noted, § 652.610(3)(a) requires

deductions to be “authorized in writing by the employee.” On

this record the Court concludes there is a dispute of material

fact as to whether Plaintiffs and other employees authorized

Defendant in writing to take the shoe deductions from their

85 - OPINION AND ORDER
paychecks.

Accordingly, the Court DENIES in part

Plaintiffs’ Motion (#179) for Summary Judgment as to Defendant’s

Third Affirmative Defense (Authorized Deductions) to the extent

that it is premised on Oregon Revised Statutes § 652.610(3)(b). 

The Court also DENIES in part Plaintiffs’ Motion (#181) for

Summary Judgment as to Defendant’s Fifth Affirmative Defense

(Valid Deduction) to the extent that Affirmative Defense is

premised on § 652.610(3)(b). 

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

In its Third and Fifth Affirmative Defenses Defendant

also asserts the shoe deductions were permitted pursuant to 

§ 652.610(3)(c), which provides employers may make deductions

from employees’ wages when “[t]he employee has voluntarily signed

an authorization . . . . provided . . . the ultimate recipient of

the money withheld is not the employer and that the deduction is

recorded in the employer's books.”

Plaintiffs assert in their Motion for Partial Summary

Judgment on Jack in the Box’s Third Affirmative Defense

(Authorized Deductions) and Motion for Partial Summary Judgment

on Jack in the Box’s Fifth Affirmative Defense (Valid Deduction)

that Defendant has not established all Oregon employees signed

authorizations for shoe deductions. As noted, however, the Court

has already concluded Defendant has established there is a

86 - OPINION AND ORDER
dispute of material fact as to whether Plaintiffs and other

employees authorized Defendant in writing to take the shoe

deductions from their paychecks as required by § 652.610(3)(b),

and that conclusion also applies to § 652.310(3)(c).

Plaintiffs also assert Defendant cannot establish it

was not the ultimate recipient of at least some of the money

withheld from employees’ paychecks for shoes purchased from Shoes

for Crews in light of the fact that Defendant received a $2 per

pair rebate from Shoes for Crews. Defendant, however, asserts it

was not the ultimate recipient of the funds deducted from the

employees’ paychecks because the payroll deductions were “for

actual cost” and Defendant ultimately suffered losses due to the

payroll- deduction program.

Leanne Tellez, Defendant’s payroll expert, testified at

deposition in Gessele I that “however much the invoice came from

[Shoes for Crews], that’s how much would be deducted from the 

. . . employee.” Gessele I Decl. of Douglas Parker (#235), Ex. B

at 5. Wendy Sanderlin explained at deposition that Defendant

paid the “full amount” to Shoes for Crews for each shoe order,

and that amount was deducted from the ordering employee’s wages.8

Parker Decl., Ex. I at 3. On the other hand, “for every pair of

8 The record reflects the $2 rebate applied only to shoes

purchased through the payroll-deduction program. When employees

ordered from Shoes for Crews using some method other than payroll

deductions, Shoes for Crews did not pay Defendant the $2 rebate. 

Parker Decl., Ex. G at 4.

87 - OPINION AND ORDER
shoes that were sold to a Jack in the Box employee, Jack in the

Box receive[d] a $2 rebate from Shoes for Crews[,] . . . a $2

payment.” Parker Decl., Ex. G at 4. The rebate came in the form

of a quarterly check to Defendant from Shoes for Crews. 

Defendant, however, did not credit the $2 rebate towards the

employees’ shoe price or towards the amount that Defendant

deducted from the employees’ wages for their shoe purchases. 

Defendant instead placed the rebates received from Shoes for

Crews in a rebate account and used those funds to offset the

losses that Defendant suffered on the shoe-purchase program. The

record reflects Defendant received $1,052,000 in rebate payments

during the relevant period, which it used to offset partially its

$1,760,000 losses from the payroll-deduction program during that

same period. Parker Decl., Ex. G at 4.

The parties do not cite nor could the Court find any

case that involved circumstances precisely like those in this

case. In Wilson, however, the court concluded the defendant did

not wrongfully deduct money for the cellular telephone from the

plaintiff’s wages pursuant to § 652.610(3)(c) because the

defendant was not the ultimate recipient of the money that the

defendant deducted. Specifically, the cellular-service provider

received all of the money that the defendant deducted from the

plaintiff’s wages, the defendant did not retain any of the funds

withheld from the plaintiff, and there was not any indication

88 - OPINION AND ORDER
that the defendant received a rebate or return of funds from 

the cellular provider. 2017 WL 4837199, at *15. Similarly, 

in Weir v. Joly the court concluded the defendant did not

wrongfully deduct money from the plaintiff’s wages pursuant to 

§ 652.610(3)(c) when it withheld funds for a background-check fee

because it was “undisputed that [the defendant] pa[id] the Port

[of Portland] the background-check fee that it deduct[ed] from

[the plaintiff’s] paycheck.” No. 3:10-CV-898-HZ, 2011 WL

6778764, at *3 (D. Or. Dec. 23, 2011). There was not any

indication that the defendant kept any portion of the funds

deducted from the plaintiff’s paycheck for the background-check

fee or that the defendant received any portion of that fee back

from the Port of Portland. In contrast, in Taylor the plaintiff

signed an agreement at the start of his employment that

authorized the defendant “to withhold $10 per week from his wages

as a bond, until a total of $400 had been withheld . . . [and]

that the bond would be refunded approximately 60 days after

plaintiff's employment ended, as long as there were no claims

against the bond.” 329 Or. at 463–64. In March 1995 the

plaintiff stopped working for the defendant. The defendant did

not refund the $400 bond to the plaintiff until May 1995 after

the defendant had determined there were not any claims against

the bond. The defendant asserted its actions did not violate 

§ 652.610(3)(c) because it “was not the ‘ultimate recipient’ of

89 - OPINION AND ORDER
the money.” Id. at 470. The court rejected the defendant’s

assertion:

If [the defendant had] needed the money to cover

any liability that plaintiff owed it at the time

of plaintiff's termination, then [the defendant]

would have kept part of or all the wages withheld. 

The fortuity that the condition of the truck and

equipment met [the defendant’s] approval — and,

thus, that plaintiff eventually received the wages

— does not make [the defendant’s] conduct lawful.

Id. at 470-71. Taken together, these cases indicate when an

employer is not at any time the recipient of any part of the

funds deducted from an employee’s paycheck, the employer has

satisfied the requirement of § 652.610(3)(c) that “the ultimate

recipient of the money withheld is not the employer.” 

Here the record reflects Defendant did not directly

receive any of the funds deducted from its employees’ wages for

purchases from Shoes for Crews. The statute, however, uses the

word “ultimate,” which is defined as “last in a progression or

series,” “eventual,” or “most remote in space or time.” MerriamWebster online https://www.merriam-webster.com/dictionary/

ultimate?src=search-dict-box. Here, as noted, Defendant

eventually received part of the funds deducted from its

employees’ wages for purchases from Shoes for Crews via the $2

rebate, but Defendant did not, in turn, credit the $2 rebate

against the deductions taken from employees’ wages and instead

used the rebate to offset Defendant’s costs.

On this record the Court concludes Plaintiffs have

90 - OPINION AND ORDER
established as matter of undisputed fact that Defendant was the

“ultimate recipient of . . . money withheld” from its employees,

and Plaintiffs have established as a matter of law that Defendant

was not permitted to withhold Shoes for Crews payments from its

employees pursuant to Oregon Revised Statutes § 652.610(3)(c). 

Accordingly, the Court GRANTS in part Plaintiffs’

Motion (#179) for Summary Judgment on Jack In The Box’s Third

Affirmative Defense (Authorized Deductions) to the extent that

Affirmative Defense is premised on § 652.610(3)(c) and GRANTS in

part Plaintiffs’ Motion (#181) for Summary Judgment as to the

portion of Defendant’s Fifth Affirmative Defense (Valid

Deduction) premised on § 652.610(3)(c).

IV. Summary of Rulings on Shoe-Deduction Motions

For the reasons noted above, the Court 

1. DENIES Plaintiffs’ Motion (#173) for Partial Summary

Judgment on the issue of Defendant’s prima facie

liability on Plaintiffs’ Shoe Claims on the ground that

a material dispute of fact exists as to whether class

members authorized the shoe deductions in writing;

2. GRANTS in part Plaintiffs’ Motion (#179) for Partial

Summary Judgment on Jack in the Box’s Third Affirmative

Defense (Authorized Deductions) to the extent that

Affirmative Defense is premised on Oregon Revised

Statutes § 652.610(3)(c);

91 - OPINION AND ORDER
3. DENIES in part Plaintiffs’ Motion (#179) for Partial

Summary Judgment on Jack in the Box’s Third Affirmative

Defense (Authorized Deductions) to the extent that

Affirmative Defense is premised on Oregon Revised

Statutes § 652.610(3)(b) because a material dispute of

fact exists as to whether class members authorized the

shoe deductions in writing; 

4. GRANTS in part Plaintiffs’ Motion (#180) for Partial

Summary Judgment on Jack in the Box’s Fourth

Affirmative Defense (Benefit to Employees) to the

extent that Affirmative Defense is premised on Oregon

Revised Statutes § 653.035(1);

5. DENIES in part Plaintiffs’ Motion (#180) for Partial

Summary Judgment on Jack in the Box’s Fourth

Affirmative Defense (Benefit to Employees) to the

extent that Affirmative Defense is premised on Oregon

Revised Statutes § 652.610(3)(b);

6. GRANTS in part Plaintiffs’ Motion (#181) for Partial

Summary Judgment on Jack in the Box’s Fifth Affirmative

Defense (Valid Deduction) to the extent that

Affirmative Defense is premised on Oregon Revised

Statutes § 652.610(3)(c); and 

7. DENIES in part Plaintiffs’ Motion (#181) for Partial

Summary Judgment on Jack in the Box’s Fifth Affirmative

92 - OPINION AND ORDER
Defense (Valid Deduction) to the extent that

Affirmative Defense is premised on Oregon Revised

Statutes § 652.610(3)(b) because a material dispute of

fact exists as to whether class members authorized the

shoe deductions in writing.

DEFENDANT’S MOTION (#163) FOR SUMMARY JUDGMENT

NO. 3 - REMEDIES RELATED TO ALLEGED WRONGFUL

DEDUCTIONS ARE LIMITED

For the reasons that follow the Court GRANTS in part and

DENIES in part Defendant’s Motion (#163) for Summary Judgment 

No. 3 - Remedies Related to Alleged Wrongful Deductions Are

Limited.

In its Third Motion for Summary Judgment Defendant requests

the Court grant summary judgment “as to any remedies beyond a

single $200 sum per person under ORS 652.615 for claims

associated with wrongful deductions.” Defendant asserts 

(1) Plaintiffs’ derivative claims for penalties pursuant to

Oregon Revised Statutes § 652.150 are barred by the “sameconduct” rule; (2) Plaintiffs are limited to “actual damages or

one $200 sum per class member, not [per] pay period, under 

§ ORS 652.615”; (3) Defendant’s conduct was not willful; (4) even

if Plaintiffs are entitled to penalty wages pursuant to 

§ 652.150, Plaintiffs may not recover those wages for any

violations that occurred outside of the limitations period; and

(5) the Court should limit Plaintiffs “potential recovery of

93 - OPINION AND ORDER
statutory damages to prevent violations of [Defendant’s] due

process rights.” 

Plaintiffs acknowledge “many cases prohibit the recovery of

more than one 30-day penalty for the same conduct.” Plaintiffs,

however, state they are not seeking multiple penalties for the

same conduct. Pls.’ Resp. at 2. Plaintiffs also assert they

“have never advocated for the availability of more than one

penalty in the same workweek - a single deduction that violated

both the Oregon minimum wage and overtime would only entitle the

employee to one penalty under O.R.S. § 652.150.” Pls.’ Resp. at

2-3. Nevertheless, Plaintiffs contend they are not prohibited

from recovering both the $200 statutory damages remedy provided

in § 652.615 and the 30-day penalty provided in § 652.150 for

Defendant’s improper withholding of WBF funds and/or Defendant’s

improper shoe deductions when the deductions reduced an employee

class member’s wages below minimum wage and/or prohibited an

employee class member from receiving sufficient overtime.9

I. Background

As noted, on June 12, 2017, the Court issued an Opinion and

Order in which it granted Plaintiffs’ Motion to Certify the WBF

Class, granted Plaintiffs’ Motion to Certify the Shoe Class,

9 The parties agree Plaintiffs’ final-paycheck claim relates

only to the Franchise Transfer Class and is “not derivative or

duplicative of Plaintiffs’ other claims.” The final-paycheck

claim, therefore, is “excluded from [Defendant’s] arguments about

prohibiting multiple penalties.”

94 - OPINION AND ORDER
granted Plaintiffs’ Motion to Certify the Franchise Transfer

Class, and denied Plaintiffs’ Motion to Certify the Unpaid Break

Class. 

In their WBF Claim Plaintiffs allege Defendant improperly

allocated its WBF assessments between Defendant and its

employees, which resulted in an unauthorized deduction from

employees’ wages in violation of Oregon Revised Statutes 

§ 652.610(3). Plaintiffs also allege the WBF assessments

“reduced [Plaintiffs’] pay below the minimum wage” in violation

of Oregon Revised Statutes § 653.025 and “resulted in

[Plaintiffs] not receiving time-and-a-half for their overtime

hours” in violation of Oregon Revised Statutes § 653.261.

 In their Shoe Claims Plaintiffs allege Defendant improperly

deducted the price of non-slip shoes from employees’ wages in

violation of § 652.610(3). Plaintiffs also allege the shoe

deduction “resulted in Plaintiffs and the other employees

receiving less than the minimum wage, and less than time-and-ahalf for their overtime.” Compl. at ¶ 26.

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

652.150

Oregon Revised Statutes § 652.615 creates “a private cause

of action for a violation of ORS 652.610 . . . for actual damages

or $200, whichever is greater.”

Oregon Revised Statutes § 653.055(1) provides any employer

“who pays an employee less than the wages to which the employee

95 - OPINION AND ORDER
is entitled under ORS 653.010 to 653.261 is liable to the

employee affected . . . [f]or civil penalties provided in ORS

652.150.” In turn, Oregon Revised Statutes § 652.150 provides

for penalty wages in the same amount as the wages due until the

wages are paid or for up to 30 days after the due date of the

unpaid wages.

For each pay period that Defendant over-withheld WBF

assessments Plaintiffs seek $200 (or actual damages) pursuant to

§ 652.615 and 30 days of penalty wages pursuant to § 652.150 for

each class-member employee whose wages were reduced below minimum

wage or who did not receive sufficient overtime due to the

improper WBF assessments. 

 For each pay period that Defendant improperly deducted shoe

payments Plaintiffs seek $200 (or actual damages) pursuant to 

§ 652.615 and 30 days of penalty wages pursuant to § 652.150 for

each class-member employee whose wages were reduced below minimum

wage or who did not receive sufficient overtime due to the

improper shoe deduction.

Defendant asserts Plaintiffs may not recover more than a

single $200 sum or actual damages for each class-member employee

from whom Defendant improperly withheld WBF funds and may not

recover more than a single $200 sum for each class-member

employee from whom Defendant improperly took shoe deductions even

if the improper deduction also reduced a particular class-member

96 - OPINION AND ORDER
employee’s wages below minimum wage and/or resulted in less than

full payment of overtime.10

III. Plaintiffs may recover penalties under §§ 652.615 and 

652.150 for improper WBF or shoe deductions that reduced

their pay below minimum wage or resulted in them receiving

insufficient overtime.

Oregon courts have held a plaintiff may recover more than

one penalty under Oregon’s wage-and-hour laws only when an

employer engages in misconduct that violates two separate

statutes, each with their own separate remedies and purposes. 

For example, in Hurger v. Hyatt Lake Resort, Incorporated, 170

Or. App. 320 (2000), the plaintiffs received their final

post-termination wages after the required time elapsed under

Oregon Revised Statutes § 652.140. The plaintiffs sought one

penalty under § 652.150 for late payment of wages on termination

in violation of § 652.140 and a second penalty under § 652.150

for failure to pay minimum wages in violation of § 653.261. The

plaintiffs asserted the late payment of wages on termination

meant the plaintiffs were paid less than the minimum wage (i.e.,

nothing). Id. at 322. The Oregon Court of Appeals held the late

payment of the final wages was not separately sanctionable as a

failure to pay minimum wage because the argument was a

“tail-wagging-the-dog exercise” that was unsupported by the

10 Defendant “does not dispute that class members who had

both WBF and shoe deductions would be potentially eligible to

recoup separate awards under ORS 652.615.” Def.’s Reply at 2

n.1.

97 - OPINION AND ORDER
statute. Id. at 324–25. 

Similarly, in Herb v. Van Dyke Seed Company the plaintiff

sought to recover a penalty under § 652.150 for the defendant’s

failure to pay overtime and a second penalty under § 652.150 for

the defendant’s failure to pay all wages due on termination. 

This Court concluded the plaintiff could “not seek a penalty for

[his] employer's failure to pay overtime wages during employment

in addition to a penalty for [his] employer's alleged failure to

pay those same wages upon termination . . . , and, therefore,

Plaintiff is barred from seeking such duplicative penalties.” 

No. 3:12-CV-01070-BR, 2012 WL 4210613, at *4 (D. Or. Sept. 19,

2012).

In contrast, in Cornier v. Paul Tulacz, DVM PC, the

plaintiff alleged the defendant did not pay her for overtime

during her employment in violation of Oregon Revised Statutes 

§ 653.261 and that the defendant failed to pay her accumulated

vacation pay after she quit in violation of § 652.140. 176 Or.

App. 245, 247 (2001). The plaintiff sought two statutory

penalties under § 652.150, one for each violation. Id. The

plaintiff, however, did not assert the defendant's failure to pay

her overtime after her termination created the right to a third

penalty under § 652.150. The Oregon Court of Appeals found the

defendant's failure to pay the plaintiff constituted violations

of two distinct parts of the wage statutes and those violations

98 - OPINION AND ORDER
arose out of different factual contexts and accrued at different

times. Id. at 248. The court, therefore, concluded the

plaintiff was entitled to the two separate penalties. Id. at

249. The court noted:

[T]his case does not present an instance of double

penalties for the same conduct . . . because here

the violation that occurred during employment was

underpayment for overtime, while the violation at

termination was nonpayment for accrued vacation.

Plaintiff has asserted separate violations for

separate acts of her employer. . . . [I]f this

case did present two claims for two penalties

based on the same employer misconduct, one of

those claims would probably fail under Hurger v.

Hyatt Lake Resort, Inc.

Id. at 250. 

Likewise, in Wilson v. Smurfit Newsprint Corporation the

plaintiffs brought several claims against the defendant,

including a claim that the defendant unlawfully withheld medical

insurance payments from the plaintiffs’ last paychecks in

violation of Oregon Revised Statutes § 652.610. 197 Or. App. at

652. The plaintiffs asserted “defendant's excess withholding

violated not only ORS 652.610(3)(a) but also ORS 652.150, because

the withholding resulted in late payment of wages on

termination.” Id. at 671. The plaintiffs, therefore, contended

the “defendant must pay each of them not only $200 under ORS

652.615 but also 30 days of penalty wages” under Oregon Revised

Statutes § 652.150. The Oregon Court of Appeals noted there were

not any cases directly on point, but cases that presented

99 - OPINION AND ORDER
somewhat similar facts “suggest[ed] . . . plaintiffs’ argument is

correct.” Id. Specifically, the Wilson court relied on the

following discussion in Allen v. County of Jackson:

Before the creation of what is now ORS 652.615,

the way to recover an illegal deduction was to

file a normal wage claim. Nothing in the

legislature's action in creating a new, separate

claim suggests that it intended to abolish the

existing remedy; rather, the legislature added a

new remedy to the existing one.

In short, . . . when an employer deducts amounts

that are illegal under [ORS 652.615], the employee

may file one or both of two different kinds of

claims: (1) a regular wage claim under ORS

652.120 . . . or ORS 652.140 (concerning payment

of wages at termination of employment); or (2) a

specific claim for illegal deductions under ORS

652.615, which includes the minimum damage amount.

Wilson, 197 Or. App. at 671-72 (quoting Allen, 169 Or. App. 116,

133-34 (2000)). The Wilson court also noted the Oregon Supreme

Court in Taylor v. Werner Enterprises, Incorporated, held “an

employer who withholds without authorization violates both ORS

652.150 and ORS 652.610 and that the employee ‘is entitled to

recover under ORS 652.150 and ORS 652.610(3)(c).’” Wilson, 197

Or. App. at 672 (quoting Taylor, 329 Or. 461, 471 (1999)).

Here the Court finds the differences between Plaintiffs’

claims for wrongful WBF and shoe deductions are similar to the

differences between the claims in Wilson. Although Plaintiffs’

request for statutory penalties pursuant to § 652.150 for failure

to pay minimum wage or failure to pay overtime result from

Defendant’s alleged improper withholding of WBF funds and/or shoe

100 - OPINION AND ORDER
deductions, the Court concludes they present substantially

different violations and are not conjoined in the same way as

those in Herb and Hurger.

The Court, therefore, concludes Plaintiffs may recover

statutory damages under § 652.615 as well as penalty wages under

§ 652.150 if they establish Defendant’s WBF and/or shoe

deductions were improper and reduced employee class members’

wages below minimum wage or resulted in employee class members

receiving insufficient overtime to the extent that due-process

concerns are not implicated as to their WBF claims.

IV. Plaintiffs are limited to a single $200 sum or actual

damages for improper WBF deductions and/or a single $200 sum

or actual damages for improper shoe deductions.

Defendant asserts Plaintiffs are also limited to a single

$200 sum or actual damages per class-member employee for improper

WBF deductions and/or a single $200 sum or actual damages per

class-member employee for improper shoe deductions as opposed to

a $200 sum or actual damages per class-member employee for each

pay period during which Defendant made improper deductions. 

Plaintiffs concede this point in their Response and note they

“are willing to abide by Judge Simon’s recent thoroughly

reasoned Brinkman opinion on this issue.” Pls.’ Resp. at 2. 

In Brinkman v. ABM Onsite Services - West, Incorporated, the

plaintiff brought a collective action alleging his employer

wrongfully deducted certain WBF assessments from his paychecks

101 - OPINION AND ORDER
and the paychecks of putative class members. 383 F. Supp. 3d

1120 (D. Or. 2019). The plaintiff asserted the defendant

“violated ORS § 652.610(3), and therefore . . . [the plaintiff]

and others similarly situated are entitled to (for each

violation) the greater of $ 200 or actual damages in an amount to

be proven at trial, pursuant to ORS 652.615.” Id. at 1123

(quotation omitted). The plaintiff defined “each violation” as

“each paycheck containing a wrongful deduction.” Id. The

defendant moved for partial summary judgment and asserted the

plaintiff was “only entitled to actual damages or a single $ 200

penalty under ORS § 652.615 if Plaintiff proves his claims for

alleged multiple wrongful deductions under ORS § 652.610(3).” 

Id. (emphasis in original). The court concluded:

Because the Oregon Supreme Court's statement in

Allen is the best indicator of how the state's

highest tribunal likely would interpret this

Oregon law, this Court finds that ORS § 652.615

allows a successful plaintiff to be awarded actual

damages or a single sum of $ 200, whichever is

greater, for a given type of violation of ORS 

§ 652.610(3), even if that violation occurs

multiple times across multiple pay-periods.

Id. at 1127 (citing Allen v. County of Jackson, 340 Or. 146

(2006)).

Although Brinkman is not binding on this Court, the Court

finds it to be well-reasoned and well-supported by authority. 

The Court, therefore, adopts the reasoning of Brinkman and

concludes Plaintiffs are limited to a single $200 sum or actual

102 - OPINION AND ORDER
damages per class-member employee for improper WBF deductions

and/or a single $200 sum or actual damages per class-member

employee for improper shoe deductions even if those violations

occurred multiple times across multiple pay periods.

V. Willfulness of Defendant’s Alleged Violations

Defendant asserts even if the Court permits a potential

recovery of penalties under § 652.150, “Plaintiffs cannot

establish such relief because the alleged conduct was not

willful.” Def.’s Mot. at 11. Defendant asserts its failure to

pay wages as a result of WBF and/or shoe deductions was “at best

inadvertent, not willful . . . [b]ecause neither the shoe nor WBF

deduction were made willfully under ORS § 652.150.” Id. 

Defendant also reiterates its arguments related to willfulness

asserted in its Responses to Plaintiffs’ Motion for Summary

Judgment on the Issue of Prima Facie Liability on Their Workers’

Benefit Fund Claims and Motion for Partial Summary Judgment on

the Issue of Prima Facie Liability on Their Shoe Claims. 

The Court concludes on this record that Plaintiffs have

established Defendant’s over-withholding of WBF assessments

and/or shoe deductions was willful within the meaning of Oregon

Revised Statutes § 652.150 for the reasons set out above.

VI. Limitations Period

Defendant asserts even if the Court concludes Plaintiffs may

receive penalty wages pursuant to § 652.150 in addition to

103 - OPINION AND ORDER
statutory damages under § 652.615, Plaintiffs may not recover

penalty wages for any violation that occurred outside of the

limitations period. 

In Oregon the limitations period applicable to a claim for

unpaid regular wages is six years. Or. Rev. Stat. § 12.080(1). 

In contrast, the limitations period applicable to claims for

penalties arising out of the failure to pay minimum wages is

three years. Or. Rev. Stat. 12.100(2). See also Russell v. U.S.

Bank N.A., 246 Or. App. 74, 77 (2011). In addition, the

limitations period applicable to claims for unpaid overtime or

for penalties arising out of the failure to pay overtime is two

years. Or. Rev. Stat. 12.110(3). See also Makaneole v.

Solarworld Indus. Am., Inc., No. 3:14-CV-1528-PK, 2016 WL

7856433, at *13 (D. Or. Sept. 2, 2016), report and recommendation

adopted, No. 3:14-CV-01528-PK, 2017 WL 253983 (D. Or. Jan. 17,

2017).

The Court, therefore, concludes on this record that penalty

wages resulting from WBF or shoe deductions that caused

Plaintiffs’ wages to fall below the required minimum wage are

limited to violations that occurred on or after August 13, 2007. 

Similarly, penalty wages resulting from WBF or shoe deductions

that caused Plaintiffs to receive insufficient overtime are

limited to violations that occurred on or after August 13, 2008.

104 - OPINION AND ORDER
VII. Due-Process Concerns

Defendant reiterates its argument that the Court should

limit Plaintiffs “potential recovery of statutory damages to

prevent violations of [Defendant’s] due process rights.” 

As the Court noted earlier, although due-process concerns

may possibly be implicated, the Court finds the record is not

sufficiently developed to enable the Court to determine

conclusively whether awards of penalty wages under § 652.150

violate Defendant’s due-process rights as to the WBF claims

because Plaintiffs have not requested a ruling as to a specific

sum of damages for their WBF claims and Defendant’s reliance on

hypothetical employees for the calculation and comparison of

statutory damages and penalty wages is insufficient. 

Accordingly, the Court declines to grant Defendant’s Motion on

the basis of due-process concerns at this time. 

VIII. Summary

In summary, the Court concludes Plaintiffs may recover one

$200 sum or actual damages per class-member employee pursuant to

§ 652.615 for any improper WBF assessment and/or one $200 sum or

actual damages per class-member employee pursuant to § 652.615

for any improper shoe deductions. 

Plaintiffs may also recover penalty wages under § 652.150

for failure to pay minimum wages or overtime in addition to the

statutory damages allowed pursuant to § 652.615 to the extent

105 - OPINION AND ORDER
that the WBF and/or shoe deductions caused a class-member

employee to receive insufficient overtime or not to receive

minimum wages subject to the two-year limitations period for

penalty wages for failure to pay sufficient overtime and the

three-year limitation period for penalty wages for failure to pay

minimum wages.

Finally, although due-process concerns may be implicated,

the Court concludes this record is not sufficiently developed to

resolve due-process issues conclusively at this stage of the

proceedings.

Accordingly, the Court GRANTS in part and DENIES in part

Defendant’s Third Motion (#163) for Summary Judgment.

DEFENDANT’S MOTION (#164) FOR SUMMARY JUDGMENT

NO. 4 - BREACH OF FIDUCIARY DUTY TORT CLAIMS

IS TIME-BARRED

For the reasons that follow the Court GRANTS Defendant’s

Motion (#164) for Summary Judgment No. 4 - Breach of Fiduciary

Duty Tort Claims Is Time-Barred.

In its Fourth Motion for Summary Judgment Defendant asserts

Plaintiffs’ claim for breach of fiduciary duty is time-barred

because it does not relate back to their statutory claims.

Plaintiffs assert their claim for breach of fiduciary duty

is not time-barred because it relates back to their statutory

Shoe Claims.

106 - OPINION AND ORDER
I. Background

As noted, Plaintiffs received their final paychecks from

Defendant on the following dates:

Tricia Tetrault: July 11, 2008

Ashley Ortiz: December 26, 2008

Nicole Gessele: March 20, 2009

Jessica Gessele: November 23, 2009

Christina Mauldin: March 30, 2010

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

Gessele, and Tricia Tetrault filed Gessele I in this Court

alleging claims for violation of the minimum-wage and overtime

provisions of the FLSA and Oregon’s wage-and-hour laws. For

purposes of their Shoe Claims in Gessele I Plaintiffs relied on

the following allegations: 

At all relevant times, [Defendant] required its

employees to purchase a specific type of shoes

from a specific company (called Shoes for Crews),

and that they re-purchase new pairs of said shoes

from time to time, and willfully deducted the

price of said shoes from the pay of its employees

without meeting the statutory requirements to do

so.

Gessele I Compl. at ¶ 7. Plaintiffs asserted the shoe purchases

and other deductions were in violation of Oregon Revised Statutes

§ 652.610 and that various deductions (including the deductions

for shoes) caused certain employees not to receive minimum wages

or overtime in violation of Oregon’s wage-and-hour laws and the

FLSA.

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

Gessele, and Tricia Tetrault filed a First Amended Complaint in

107 - OPINION AND ORDER
Gessele I in which they added Christina Mauldin as a named

Plaintiff. Plaintiffs did not change or add allegations or

claims related to wrongful deductions.

On March 20, 2012, Plaintiffs filed a Second Amended

Complaint in Gessele I in which they alleged additional factual

allegations to support their claims. Specifically, Plaintiffs

added the following allegations to their wrongful-deductions

claims:

[Defendant] also required its restaurant employees

to wear a specific kind of nonslip shoes . . .

made by a specific company-approved manufacturer

. . . . [Defendant] only allowed its employees to

wear shoes from an approved list of manufacturers,

who gave certain benefits to [Defendant]: the

manufacturers had to offer [Defendant] a

guarantee, and they had to pay [Defendant] a

kickback. The guarantee was that the shoe maker

would pay the first $5,000 of any medical expense

claim resulting from a slip and fall while an

employee was wearing that manufacturer’s brand of

shoes that the employee paid for with payroll

deduction. The kickback was that the shoe

manufacturer would pay $2 to [Defendant] for every

pair of shoes that an employee paid for with

payroll deduction. Those extra perks paid to

[Defendant] made the shoes more expensive, but

[Defendant] didn’t allow its employees to wear the

less expensive shoes made by manufacturers that

didn’t offer those perks to [Defendant] (even if

those less expensive shoes met the coefficient of

friction requirements).

When an employee was told by their manager that

they had to order the shoes, the employee picked

from the designated catalog of the approved

manufacturer. The manager would then phone in the

employee’s order. [Defendant] would pay the

manufacturer for the shoes and then deduct that

price from the employee’s wages over four

paychecks. 

108 - OPINION AND ORDER
* * *

Each quarter, [Defendant] would get a check from

the shoe manufacturer for $2 per pair of shoes

ordered by the employees through payroll

deduction. That kickback was not passed on to the

employees. The employees therefore paid $2 more

per pair of shoes than [Defendant] did. . . . 

Because [Defendant] got a $2 kickback per pair of

approved shoes, plus a medical expense guarantee

from injured workers wearing approved shoes, the

approved shoes benefitted [Defendant]. The shoes

are part of a uniform, for the company’s benefit,

and on top of that, the company charged more for

them than it paid for them. The company’s

requiring employees to purchase those shoes (and

the deduction of the price from their wages) was

therefore a violation.

Furthermore, the shoe deductions resulted in

Plaintiffs and the other employees receiving less

than the minimum wage, and less than

time-and-a-half for their overtime. 

Gessele I Second Am. Compl. at ¶¶ 8-11. Plaintiffs continued to

assert Defendant’s shoe deductions violated Oregon Revised

Statutes § 652.610 and the minimum-wage and overtime provisions

of the FLSA and Oregon wage-and-hour laws.

In December 2012 Plaintiffs moved for leave to file a Third

Amended Complaint in Gessele I to assert a common-law claim for

breach of fiduciary duty. Magistrate Judge Stewart denied

Plaintiffs’ Motion for Leave to File a Third Amended Complaint on

the ground that Gessele I was “too far advanced to add two new

defendants (including a representative of a proposed defendant

class), many new claims unrelated to the pending claims for wage

and hour violations, additional putative class members, and over

109 - OPINION AND ORDER
50 new proposed classes and subclasses.” Gessele I Order (#157). 

Gessele I, therefore, never included a claim for common-law

breach of fiduciary duty.

As noted, on May 15, 2014, this Court issued an Amended

Opinion and Order (#293) in Gessele I in which it concluded it

never acquired jurisdiction over Plaintiffs’ FLSA claims, and, as

a result, the Court could not exercise supplemental jurisdiction

over Plaintiffs’ state-law claims. In reaching that conclusion

the Court addressed the Plaintiffs’ assertion that they did not

discover the basis for all of their FLSA claims until the

February 6, 2012, deposition of Gene James, Defendant’s Director

of Asset Protection, who testified about the $2 per shoe

purchase-rebate program. Plaintiffs asserted their FLSA claims,

therefore, did not accrue until February 2012. The Court

concluded the FLSA does not have a discovery rule, and,

therefore, Plaintiffs’ FLSA claims accrued when Defendant

allegedly failed to pay Plaintiffs’ compensation and the

limitations period began to run on the date of the named

Plaintiffs’ final paychecks. The Court further concluded even if

the FLSA had a discovery rule, Plaintiffs failed to establish

that they did not “discover” their FLSA claims (including claims

relating to the $2 rebate for shoes) until February 2012. 

Specifically, the Court noted Plaintiffs included allegations

about the shoe-purchase and deduction program in its original and

110 - OPINION AND ORDER
First Amended Complaints. The Court also noted 

Plaintiffs stated in their April 15, 2011, Reply

in support of their Motion to Compel that they had

“discovered from other sources” that Shoes for

Crews pays the first $5,000 of any workers’-

compensation claim by an employee who slips while

wearing Shoes for Crews shoes. This statement

undermines Plaintiffs’ assertion that they did not

know about the rebates (or kickbacks) from Shoes

for Crews until James mentioned them at his

February 2012 deposition.

Am. Opin. and Order (#293) at 22-23. 

In their Complaint in Gessele II Plaintiffs allege the

following in support of their Seventh Claim for Oregon Common Law

Breach of Fiduciary Duty:

[Defendant] also acted as the employees’

purchasing agent with respect to the shoes. That

means that [Defendant] bought the shoes at the

employees’ request and on their behalf (not for

itself). Purchasing agents have a duty of loyalty

under common law. . . . Purchasing agents are not

supposed to accept kickbacks/commercial bribes

from the people they buy their goods from. . . . 

[Defendant] accepted kickbacks/commercial bribes

from shoe vendors in order to give them access to

its captive pool of employees who were required to

purchase those shoes. By accepting those

kickbacks/commercial bribes, [Defendant] breached

its fiduciary duty to its employees. 

* * *

Under equitable principles, the Plaintiffs and

class members have a greater right to that money

than [Defendant] does. [Defendant] should

therefore provide an accounting of all of the

money it has taken, and return that money to the

employees it was taken from. Because the

Plaintiffs and class members’ purchases of the

shoes from [Defendant] were not voluntary, they

are entitled to rescind their purchases and get

their money back. [Defendant] should also be

111 - OPINION AND ORDER
prohibited from operating similar kickback/

commercial bribery schemes in the future.

The first time anyone disclosed that [Defendant]

was collecting these kickbacks/commercial bribes

from the shoe manufacturers was during the

February 6, 2012 deposition of Gene James, its

Director of Asset Protection, when he revealed

that information unprompted by Plaintiffs’

counsel. Neither Plaintiffs nor their counsel

knew or had any reason to know of the

kickbacks/commercial bribes prior to that date.

Gessele II Compl. at ¶¶ 27-29. In their Seventh Claim for Oregon

Common Law Breach of Fiduciary Duty Plaintiffs allege:

[Defendant] required Plaintiffs and the Class

members to purchase a specific quality of

slip-resistant shoes from its list of approved

manufacturers. Plaintiffs and the Class members

ordered those shoes through their managers, and

[Defendant] paid the vendor for the shoes.

[Defendant] then deducted what it said was its

cost for those shoes from Plaintiffs’ and the

Class members’ paychecks. Throughout this

process, [Defendant] was acting as Plaintiffs’ and

the Class members’ purchasing agent. As their

purchasing agent, [Defendant] owed them a

fiduciary duty of loyalty. 

[Defendant] breached its fiduciary duty of loyalty

to Plaintiffs and the Class members by securing a

kickback, bribe or commission from the vendor. 

This self-dealing and conflict of interest

directly damaged Plaintiffs and the Class members.

Compl. ¶¶ 67-68.

In its Answer on July 16, 2014, Defendant asserted an

Affirmative Defense of preemption in which it contended

Plaintiffs’ common-law claim for breach of fiduciary duty was

preempted by the FLSA and/or Oregon’s wage-and-hour laws.

On August 31, 2015, Plaintiffs moved for summary judgment on

112 - OPINION AND ORDER
Defendant’s Affirmative Defense of preemption.

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

which it granted in part and denied in part Plaintiffs’ Motion

for Partial Summary Judgment on the issue of preemption. 

Specifically, the Court reviewed Oregon cases in which the courts

made clear that “a plaintiff may assert common-law claims

together with statutory claims as long as the common-law claims

involve a second or different injury or protect against ‘a

different evil.’” Opin. and Order (#85) at 51 (citing Palmer v.

Bi-Mart Co., 92 Or. App. 470 (1988), and Carsner v. Freightline

Corp., 69 Or. App. 666 (1984)). The Court also noted Plaintiffs’

explanation at oral argument in which they stated that their

Seventh and Eighth Claims involve a different injury than their

Oregon statutory wage-and-hour claims because

[t]here were lots of people that had shoe

deductions in non-overtime weeks. There were

people that had shoe deductions in weeks that did

not drop them below the federal minimum wage. If

neither of those two things are true, then the

FLSA [and Oregon wage-and-hour statutes] do[] not

apply by [their] very terms. [They] only appl[y]

to violations of the overtime and federal minimum

wage. These [Claims] are saying that defendants

obtained the shoe money by telling the plaintiffs

that the money that they were collecting from

their paychecks was being paid to the shoe

company, and that's not true. They got a $2

kickback. That element of falsehood or of

misleading or of not passing on money to the

ultimate wholesaler that the company took from the

plaintiffs is not contained anywhere in the FLSA

[or Oregon wage-and-hour statutes].

Feb. 16, 2016, Hearing Tr. at 16. The Court concluded Oregon’s

113 - OPINION AND ORDER
wage-and-hour statutes preempted Plaintiffs’ Seventh and Eighth

Claims to the extent that those claims “involve conduct by

Defendant that is prohibited by Oregon’s wage-and-hour laws (such

as the failure to pay overtime, the failure to pay minimum wages,

the failure to pay all wages when due, and/or wrongful deductions

in violation of § 652.610(3)).” Opin. and Order at 51-52.

II. Parties’ Arguments

As noted, Defendant alleges in its Motion for Summary

Judgment No. 4 - Breach of Fiduciary Duty that Plaintiffs’

Seventh Claim is time-barred. Specifically, Defendant points out

that the statute of limitations in Oregon for claims of breach of

fiduciary duty is two years pursuant to Oregon Revised Statutes 

§ 12.110; that Defendant did not own any restaurants in Oregon

after September 30, 2011;11 and that Plaintiffs did not assert a

claim for breach of fiduciary duty until June 2014, which is more

than two years after the last possible class member could have

been employed in any of Defendant’s Oregon restaurants. 

According to Defendant, therefore, Plaintiffs did not assert

their claim for breach of fiduciary duty within the two-year

limitations period, and, therefore, that claim is time-barred.

Plaintiffs do not dispute the limitations period for their

Seventh Claim is two years or that they did not assert a claim

11 The last paycheck issued to a named Plaintiff by

Defendant was issued on March 30, 2010.

114 - OPINION AND ORDER
for breach of fiduciary duty until June 2014. Plaintiffs,

however, assert that claim is not time-barred because it relates

back to their other claims “based on [Defendant’s] illegal

deductions for shoes.” Pls.’ Resp. at 2. Plaintiffs contend

“because they are all based on the same shoe deductions, they are

all part of the same claim for relation-back purposes. Because

the breach of fiduciary duty [claim] relates back to plaintiffs’

original complaint,12 it is not time-barred.” Id.

In its Reply Defendant asserts Plaintiffs are judicially

estopped from asserting their claim for breach of fiduciary duty

relates back to their shoe-deduction claims in Gessele I because

Plaintiffs stated at oral argument and asserted in their Motion

for Partial Summary Judgment regarding preemption that

Plaintiffs’ claim for breach of fiduciary duty was based on

“different legal injuries than th[eir] statutory claims, and [it

has] different elements and, in most instances, different

damages.” Opin. and Order (#85) at 46. 

III. The Law

Federal Rule of Civil Procedure 15(c)(1) provides:

An amendment to a pleading relates back to the

date of the original pleading when:

(A) the law that provides the applicable

statute of limitations allows relation back;

12 It is not clear which Complaint Plaintiffs are referring

to, but it appears they mean Plaintiffs’ original Complaint in

Gessele I.

115 - OPINION AND ORDER
[or]

(B) the amendment asserts a claim or defense

that arose out of the conduct, transaction,

or occurrence set out--or attempted to be set

out--in the original pleading.

The Ninth Circuit explained: 

Rule 15(c)(1) incorporates the relation back rules

of the law of a state when that state's law

provides the applicable statute of limitations and

is more lenient. As a result, if an amendment

relates back under the state law that provides the

applicable statute of limitations, that amendment

relates back under Rule 15(c)(1) even if the

amendment would not otherwise relate back under

the federal rules.

Butler v. Nat'l Cmty. Renaissance of Cal., 766 F.3d 1191, 1200

(9th Cir. 2014). Here, as noted, Oregon law provides the

applicable limitations period. Accordingly, if Oregon’s

relation-back statute is more lenient than the federal statute,

the Court must apply Oregon’s relation-back provision.

Oregon Rule of Civil Procedure 23(c) contains nearly

identical language to Federal Rule of Civil Procedure 15(c)(1)

and provides: “Whenever the claim or defense asserted in the

amended pleading arose out of the conduct, transaction, or

occurrence set forth or attempted to be set forth in the original

pleading, the amendment relates back to the date of the original

pleading.” Courts in Oregon have concluded Rule 23(c) is

substantially the same as Federal Rule of Civil Procedure

15(c)(1). See, e.g., Dillon v. Clackamas County, No. 3:14-cv00820-YY, 2018 WL 4523139, at *9 (D. Or. May 2, 2018)(concluding

116 - OPINION AND ORDER
the relation-back analysis under Oregon Rule of Civil Procedure

23(c) is the same as that under Federal Rule of Civil Procedure

15(c)(1)). The Court, therefore, concludes the relation-back

analysis is the same under state and federal law.

For a claim to relate back to a claim in the original

pleading “[t]he claims must share a common core of operative

facts such that the plaintiff will rely on the same evidence to

prove each claim.” Echlin v. PeaceHealth, 887 F.3d 967, 978 (9th

Cir. 2018)(quotation omitted). The Court does “not look to the

legal theory underlying a claim, but to the facts on which it is

based.” Ram v. County of Sacramento, 738 F. App’x 571, 571 (9th

Cir. 2018). Thus, an amendment will not relate back if the

amended complaint “had to include additional facts to support the

[new] claim.” Williams v. Boeing Co., 517 F.3d 1120, 1133 (9th

Cir. 2008).

IV. Analysis

As noted, Plaintiffs assert their claim for breach of

fiduciary duty arises from the same conduct, transaction, or

occurrence as their other Shoe Claims; i.e., the shoe-deduction

program and the $2 rebate per order that Defendant received from

Shoes for Crews but did not credit towards employees’ wage

deductions for shoe purchases. 

Although Plaintiffs rely on many of the same facts to

support their shoe-deduction claims and their claim for breach of

117 - OPINION AND ORDER
fiduciary duty, there are differences in the facts Plaintiffs

must plead and prove in order to establish a claim for breach of

fiduciary duty. For example, to state a claim for wrongful

deduction under Oregon Revised Statutes § 652.610(3) Plaintiffs

have to allege only that Defendant withheld or deducted funds

from Plaintiffs’ wages and that the deductions were not pursuant

to any exceptions set out in the statute. Similarly, to state

claims for violation of Oregon’s minimum-wage and overtime

statutes Plaintiffs must allege only that they were not paid

minimum wages or overtime within the meaning of the statutes. To

state a claim for breach of fiduciary duty, however, Plaintiffs

must also allege and “present evidence that a special

relationship or fiduciary-type relationship existed between the

parties that was independent of the duties under the [contract].” 

Vanderselt v. Pope, 155 Or. App. 334, 340 (1998)(quotation

omitted). As the court explained in Vanderselt: “In deciding

whether plaintiffs have established claims for breach of

fiduciary duty in various circumstances such as employer-employee

relationships Oregon courts have examine[d] the nature of the

relationship between the plaintiff . . . and the defendant . . .

to determine if a special relationship existed giving rise to a

heightened duty.” Id. at 342. One way

to characterize the types of relationships in

which a heightened duty of care exists is that the

party who owes the duty has a special responsibility toward the other party. This is so

118 - OPINION AND ORDER
because the party who is owed the duty effectively

has authorized the party who owes the duty to

exercise independent judgment in the former

party's behalf and in the former party's

interests. In doing so, the party who is owed the

duty is placed in a position of reliance upon the

party who owes the duty; that is, because the

former has given responsibility and control over

the situation at issue to the latter, the former

has a right to rely upon the latter to achieve a

desired outcome or resolution.

Id. (quotation omitted). Thus, determination of a claim for

breach of fiduciary duty requires an examination of the nature of

the parties’ relationship to determine whether it is the kind

that gives “rise to a heightened duty.” The facts that underlie

that evaluation are more extensive than and different from those

that underlie Plaintiffs’ claims for wrongful deductions pursuant

to § 652.610 and for failure to pay minimum wages and overtime. 

Courts have concluded under similar circumstances that a claim

does not relate back to an original complaint. For example, in

Echlin v. PeaceHealth the plaintiff brought a putative class

action against the defendants alleging violations of the Fair

Debt Collection Practices Act (FDCPA) “including but not limited

to 15 U.S.C. §§ 1692e and 1692j.” 887 F.3d 967, 971 (9th Cir.

2018). The plaintiff alleged the defendants were involved in a

“practice commonly known as flat-rating.” Id. The defendants

moved for summary judgment. In response to the defendants’

motion the plaintiff asserted even if her flat-rating claims

failed, the defendants’ “practices violate[d] [the FDCPA] in

119 - OPINION AND ORDER
other ways” such as using “false representation or deceptive

means to collect any debt” in violation of § 1692e(5). Id. The

district court granted the defendant’s motion for summary

judgment and “struck the § 1692e(5) claim [the plaintiff] argued

[for] at summary judgment” on the ground that it was barred by

the FDCPA’s statute of limitations. On appeal the plaintiff

asserted her claim for violation of § 1692e(5) related back to

her original complaint. The Ninth Circuit disagreed and

concluded the plaintiff’s § 1692e(5) claim did not relate back to

her original complaint on the grounds that:

Although [the plaintiff’s] § 1692e(5) claim arises

from the same general transaction as her flatrating claims, it would not rely on all the same

facts and evidence. . . . [The plaintiff’s]

complaint failed to allege at least two facts

critical to support a § 1692e(5) claim: (1) that

CCI is a debt collector under the Act and (2) that

CCI threatened to take any action against her that

it had no authority or intention to take. . . . 

[T]he first point . . . would . . . turn on

questions not presented by [the plaintiff’s]

original allegations. And the second point would

likewise turn on different evidence than [the

plaintiff’s] flat-rating claims, as it focuses on

the specific representations made in the letters

rather than the nature of CCI's role in the

collection process. To find in Echlin's favor,

the trier of fact would be called to [answer] 

. . . questions that simply are not presented by

[the plaintiff’s] flat-rating claims.

Id. at 978-79. 

Here Plaintiffs must plead and prove different facts to

support their shoe-deduction claims and their claim for breach of

fiduciary duty. In addition, Plaintiffs seek different remedies: 

120 - OPINION AND ORDER
equitable relief for their claim for breach of fiduciary duty and

statutory damages and penalty wages for their statutory claims. 

Specifically, in their claim for breach of fiduciary duty

Plaintiffs seek the following equitable relief: “an accounting,

restitution, and to collect their damages in an amount to be

proven at trial, together with pre- and post-judgment interest,

as well as declaratory and injunctive relief.” Gessele II Compl.

at ¶ 69. The difference in the nature of the relief sought and

the harm from which the alleged damages to Plaintiffs arose

indicates Plaintiffs’ statutory claims and their claim for breach

of fiduciary duty do not share a common nucleus of operative

facts. Compare Concienne v. Asante, 273 Or. App. 331, 341

(2015)(“The consistency between the predicate facts, the harm

caused, and the damages sought in both complaints indicate that

the amended complaint should relate back to the original

complaint.”). 

On this record the Court concludes Plaintiffs’ claim for

breach of fiduciary duty is materially different from their

statutory wage-and-hour claims because in their claim for breach

of fiduciary duty Plaintiffs rely on different predicate facts,

seek substantially different relief from their wage-and-hour

claims, and seek to remedy a different harm. The Court,

therefore, concludes Plaintiffs’ claim for breach of fiduciary

duty does not relate back to Plaintiffs’ claims in Gessele I. 

121 - OPINION AND ORDER
Thus, the Court concludes Plaintiffs’ claim for breach of

fiduciary duty is time-barred. 

Accordingly, the Court GRANTS Defendant’s Motion (#164) for

Summary Judgment No. 4 - Breach of Fiduciary Duty.

DEFENDANT’S MOTION (#165) FOR SUMMARY JUDGMENT

NO. 5 - QUASI-CONTRACT/UNJUST ENRICHMENT CLAIM

FAILS AS A MATTER OF LAW

For the reasons that follow the Court DENIES Defendant’s

Motion (#165) for Summary Judgment No. 5 - Quasi- Contract/Unjust

Enrichment Claim Fails as a Matter of Law.

Plaintiffs allege in their Eighth Claim for “equitable and

quasi-contractual claims for return of money: rescission,

restitution, unjust enrichment and money had and received” that

Defendant

unlawfully took possession of money belonging to

Plaintiffs and the Class members. Plaintiffs and

the Class members received nothing in return for

the kickback/commercial bribe portion of the

money, and overvalued shoes in return for the

remainder, both of which were obtained only under

duress of losing their jobs.

[Defendant] has failed to refund the money and has

been unjustly enriched thereby, and equity and

good conscience demand that the Plaintiffs’ and

the Class members’ money be returned. 

Plaintiffs and the Class members are entitled to

an accounting and to recover in restitution the

money unlawfully taken from them, in an amount to

be proven at trial, in addition to pre- and

post-judgment interest.

122 - OPINION AND ORDER
Compl. ¶¶ 71-73.

In its Motion for Summary Judgment No. 5 Defendant asserts

Plaintiffs’ Eighth Claim fails as a matter of law because

Defendant was not unjustly enriched by the shoe-deduction

program. Specifically, Defendant asserts Plaintiffs did not have

to purchase their shoes through Defendant’s payroll-deduction

program, Plaintiffs received a discount of up to $5 per pair of

shoes purchased through the payroll-deduction program, and

Defendant actually incurred an overall financial loss from the

shoe payroll-deduction program during the relevant period. 

According to Defendant, therefore, it was not unjustly enriched

and Plaintiffs do not have any right to recover in equity.

Contrary to Defendant’s assertion that its employees were

not required to wear shoes from Shoes for Crews, Plaintiffs

maintain in their Response that the record reflects Defendant

required employees to wear only shoes from Shoes for Crews. 

Plaintiffs contend the issue at the core of their claim for

unjust enrichment is whether Defendant was enriched at the

expense of individual employees who did not receive the benefit

of the $2 per pair rebate on their Shoes for Crews orders rather

than whether Defendant suffered overall losses from its shoededuction program.

I. The Law

“The law of unjust enrichment is undergoing a period of

123 - OPINION AND ORDER
rapid expansion in Oregon.” LRY, LLC v. Lake Cty., No. 1:17-

CV-00675-MC, 2018 WL 5300387, at *5 (D. Or. Oct. 25, 2018). In

Larisa's Home Care, LLC v. Nichols-Shields, 362 Or. 115 (2017),

the Oregon Supreme Court rejected the 1993 formula used in Oregon

for evaluating a claim for unjust enrichment:

In lieu of applying the formula in Jaqua [v. Nike,

Inc., 125 Or. App. 294, 298 (1993)], Oregon courts

should examine the established legal categories of

unjust enrichment as reflected in Oregon case law

and other authorities to determine whether any

particular enrichment is unjust.

Larisa's Home Care, 362 Or. at 132. The court identified Oregon

case law as well as Restatement (Third) of Restitution and Unjust

Enrichment (2011) “as . . . proper authorit[ies] when considering

whether allegations of unjust enrichment fall within an

established [legal] category” of unjust enrichment. Id. at 133. 

II. Analysis

The parties agree Oregon courts have not specifically

addressed whether retention of a rebate by an employer

constitutes unjust enrichment. In addition, neither party cites

nor could this Court find a case from any jurisdiction in which a

court evaluated whether retention of a rebate constitutes unjust

enrichment. Plaintiffs cite cases from other jurisdictions to

support their assertion that the shoe-deduction rebate program as

it operated in this case constitutes unjust enrichment, but those

cases did not evaluate the issue in this case. For example, in

Prospect St. Energy, LLC v. Bhargava, No. CA N13C008-203 WCC

124 - OPINION AND ORDER
CCLD, 2016 WL 446202, at *4 (Del. Super. Ct. Jan 27, 2016), the

court addressed only whether it had jurisdiction to hear an

unjust-enrichment claim. In Kleinerman v. 245 E. 87 Tenants

Corporation, 105 A.D.3d 492, 493 (N.Y. App. Div. 2013), the court

decided there was an issue of fact as to whether the defendant

knew the payments were “kickbacks.” In Osier v. Burlington

Telecom, 201 Vt. 483 (2016), the court did not address the merits

of the plaintiffs’ claim because the defendant asserted only a

procedural argument against the claim. These cases, therefore,

are of limited assistance to the Court in determining whether the

circumstances here constitute a claim for unjust enrichment under

Oregon law.

Because Oregon has not addressed facts similar to those at

issue here, the Court looks to the Restatement (Third) of

Restitution and Unjust Enrichment as directed by Larisa to

determine whether Plaintiffs’ allegations “fall within an

established legal category.” Restatement (Third) of Restitution

and Unjust Enrichment § 48 provides: “If a third person makes a

payment to the defendant to which (as between claimant and

defendant) the claimant has a better legal or equitable right,

the claimant is entitled to restitution from the defendant as

necessary to prevent unjust enrichment.” Comment e to § 48

addresses circumstances in which “the claimant has furnished the

value for which the defendant is compensated or reimbursed” and

125 - OPINION AND ORDER
explains “[o]ne salient group” of circumstances that state a

claim for unjust enrichment “consists of cases in which the

defendant has been compensated or reimbursed by a third party for

costs or expenditures incurred by the claimant. The restitution

claim is particularly secure when the basis of the claim is the

payment of money, thereby removing any question about valuation.” 

Id. Comment e contains several illustrative examples of this

type of claim for unjust enrichment, including the following:

Buyer purchases 100,000 gallons of sweet cider

from Seller. The contract price is $1.45 per

gallon plus 10 percent federal tax. Seller

collects the tax in respect of these sales from

Buyer and remits $14,500 to the United States. 

A subsequent ruling in a case involving other

taxpayers establishes that sweet cider is not

subject to the 10 percent tax. Seller applies for

a refund, and the United States pays Seller

$14,500 plus $500 interest. Buyer is entitled to

recover $15,000 from Seller.

* * *

A lease of Blackacre provides that Tenant shall

pay Landlord, in addition to base rent, an

additional amount corresponding to a portion of

the real estate taxes assessed on the property. 

Blackacre is taken by condemnation; the final

award to Landlord includes $500,000 for the value

of the property and $50,000 as a refund of taxes

previously collected for the period following the

taking. . . . By the rule of this section, Tenant

may recover from Landlord that proportion of the

$50,000 that corresponds to Tenant's contributions

to the taxes in question. 

In addition, the Court notes Oregon courts have “long held” the

right to a refund of overpayment is implied by law. See, e.g.,

Digimark Corp. v. Verance Corp., No. 10-cv-1489-JE, 2011 WL

126 - OPINION AND ORDER
7077315, at *11 (D. Or. Sept. 19, 2011)(citing Smith v. Rubel,

140 Or. 422, 426 (1932)(right to refund of overpayment is implied

by law without regard to the “actual promise” of refund); Fred S.

James & Co. v. E.G. Doll & Co., 104 Or. App. 508, 512 (1990)

(affirming decision of trial court requiring the defendant to

return the plaintiff’s overpayment)). Thus, when a party has

overpaid for an item, Oregon law implies the right to a refund of

the overpayment.

The Court concludes based on Restatement (Third) of

Restitution and Unjust Enrichment § 48, Comment e, the

illustrations to Comment e, and Oregon’s “long-held” right to a

refund of overpayment that Plaintiffs’ allegations of unjust

enrichment fall in “an established [legal] category” of unjust

enrichment within the meaning of Larisa. 

Accordingly, the Court DENIES Defendant’s Motion (#165) for

Summary Judgment No. 5 - Quasi Contract/Unjust Enrichment.

PLAINTIFFS’ MOTION (#174) FOR PARTIAL SUMMARY JUDGMENT ON THE

ISSUE OF PRIMA FACIE LIABILITY ON THEIR FRANCHISE TRANSFER CLAIMS

AND PLAINTIFFS’ MOTION (#178) FOR PARTIAL SUMMARY 

JUDGMENT ON THE ISSUE OF DAMAGES UNDER O.R.S. 652.140

For the reasons that follow the Court GRANTS Plaintiffs’

Motion (#174) for Partial Summary Judgment on the Issue of Prima

Facie Liability on Their Franchise Transfer Claims and GRANTS in

part and DENIES in part Plaintiffs’ Motion (#178) for Partial

127 - OPINION AND ORDER
Summary Judgment on the Issue of Damages under O.R.S. 652.140.

In their Motion for Partial Summary Judgment on the Issue of

Prima Facie Liability on Their Franchise Transfer Claims

Plaintiffs assert they are entitled to summary judgment on the

issue of Defendant’s liability for violation of Oregon Revised

Statutes § 652.140 for failing to pay Plaintiffs and other

employees within the period required by law when Defendant

transferred its Oregon restaurants to franchisees.

Plaintiffs allege in their Complaint:

Plaintiffs . . . and the other employees of

company-owned [restaurants] in Oregon that were

transferred to the ownership of a franchisee did

not receive their earned and unpaid wages within

the period required by law following that transfer

of ownership. . . . [Defendant] is therefore

liable for damages to each employee who was

employed at the time their [restaurant] was

transferred who was not paid the business day

after their last day as a corporate employee. For

example, . . . Christina Mauldin . . . [was]

employed by the corporation on Sunday, March 28,

2010, but employed by a franchisee at the same

[restaurant] on Monday, March 29, 2010. [Her]

final paycheck[] from [Defendant was,] therefore

due on March 29, 2010. But [she was] not paid

until March 30, 2010. The [restaurant] transfers

at issue include . . . 6 [restaurants] transferred

on May 1, 2006, 21 [restaurants] transferred on

March 29, 2010, 13 [restaurants] transferred on

March 7, 2011, and 3 [restaurants] transferred on

September 30, 2011.

Compl. at ¶ 37. Plaintiffs assert Defendant’s failure to pay

their wages within the period required by law violated Oregon

Revised Statutes § 652.140.

In their Motion for Partial Summary Judgment on the Issue of

128 - OPINION AND ORDER
Damages under O.R.S. 652.140 Plaintiffs assert when Defendant

transferred its Oregon restaurants to franchisees, Defendant’s

failure to pay their wages due within the time required by law 

was willful. Plaintiffs contend they are, therefore, entitled to

penalty wages pursuant to Oregon Revised Statutes § 652.150. 

Specifically, Plaintiffs allege each class member who did not

timely receive his or her final wages within the relevant

limitations period (August 13, 2007, to December 2011) are

entitled to one 30-day penalty pursuant to Oregon Revised

Statutes § 652.150 as calculated by Defendant’s expert, Emil

Czechowski.

In its Responses to Plaintiffs’ Motions Defendant concedes

it did not pay “certain employees” their final paychecks on the

day following “the termination and transfer of their employment

to franchises.” Defendant, however, asserts its failure to pay

certain employees timely was not willful and even if it was

willful, Plaintiffs have not established every unpaid class

member is entitled to 30 days of penalty wages.

I. Willfulness

As noted, Defendant asserts even though it failed to pay

certain employees’ final wages timely, Plaintiffs are not

entitled to penalty wages because they have not established

Defendant’s failure to pay certain employees’ wages within the

time required by the law was willful within the meaning of 

129 - OPINION AND ORDER
§ 652.150. 

A. The Law

Oregon Revised Statutes § 652.150(1) provides any

employer who “willfully fails to pay any wages or compensation of

any employee” must pay a penalty for nonpayment. Although the

statute does not define willful, “[t]he word wilful [sic] has a

particular meaning under Oregon law.” Nance v. May Trucking Co.,

No. 3:12-CV-01655-HZ, 2014 WL 2113094, at *4 (May 20, 2014). 

Specifically, 

[i]n civil cases the word wilful [sic], as

ordinarily used in courts of law, 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. It amounts to nothing more than

this: That the person knows what he is doing,

intends to do what he is doing, and is a free

agent.

Id. (quoting Sabin v. Willamette–Western Corp., 276 Or. 1083,

1093 (1976)). “That definition excludes the individual who does

not know that his employee has left his employ or who has made an

unintentional miscalculation.” Wilson, 197 Or. App. at 660

(quotation omitted). 

Oregon courts have held “‘[a]n employer acts wilfully

[sic] if, having the financial ability to pay wages which he

knows he owes, fails to pay them. The statute was not intended

to impose liability where the employer's refusal to pay wages is

based upon a bona fide belief that he is not obligated to pay

130 - OPINION AND ORDER
them.’” Id. at 661 (quoting State ex rel Nilsen v. Lee, 251 Or.

284, 293 (1968)). In addition, “an employer lacks knowledge, and

therefore does not act willfully, if it has a good faith belief

that one of the elements necessary to trigger the obligation to

pay wages owed at termination is lacking.” Wilson, 197 Or. App.

at 661 (citing Hekker v. Sabre Constr. Co., 265 Or. 552, 561

(1973)).

In Sabin the defendant owed the plaintiff $500 for

unused vacation time when the plaintiff’s employment ended. The

defendant deducted an outstanding debt of the plaintiff from the

$500 believing it had the right to recoupment or a set-off. The

Oregon Supreme Court ultimately concluded the defendant’s conduct

was “willful” and the plaintiff was entitled to penalty wages

under § 652.150:

[W]e hold that there was sufficient evidence to

support the finding by the trial judge that

defendant's conduct was “wilful” for the purposes

of this statute. . . . [D]efendant . . .

wrongfully undertook to deduct as a matter of

“set-off” or “recoupment” the $91.62 from the

wages due to [the plaintiff] for that work.

Although defendant may not have acted with “malice

or wrong,” or with “perverseness or moral

delinquency,” we believe that the trial court

could reasonably infer from these facts that in

making the deduction of $91.62 defendant did not

make an “unintentional miscalculation”; but “knew

what he was doing, intended to do what he was

doing, and was a free agent” and that defendant

was a “careless employer,” so as to constitute a

“wilful” [sic] failure to pay the wages payable to

plaintiff within the meaning of ORS 652.150.

131 - OPINION AND ORDER
276 Or. at 1093–94. Numerous cases 

establish that an action is willful if it is fully

knowing, intentional, and voluntary. Clearly, a

malicious action or one taken in bad faith

qualifies. Equally as clearly, an employer does

not act willfully if it acts without fully knowing

that the historical circumstances triggering the

obligation have occurred (for example, that the

employee has quit) or if it acts based on an

innocent miscalculation that is not careless.

Wilson, 197 Or. App. at 662–63.

B. Analysis

As noted, Defendant asserts Plaintiffs are not entitled

to penalty wages because they have not established Defendant’s

failure to pay certain employees’ wages within the time required

by law was willful within the meaning of § 652.150. Defendant

relies on the Oregon Supreme Court’s statement in Sabin that 

§ 652.150 “was not intended to impose liability where the

employer's refusal to pay wages is based upon a bona fide belief

that he is not obligated to pay them.” Sabin, 276 Or. at 1093

(citing State ex rel. Nilsen v. Lee, 251 Or. 284, 293—94 (1968)). 

The Sabin court pointed out that “[i]n defining the term

‘willfully’ for the purpose of [§ 652.150], however,” the court

in State ex rel. Nilsen v. Johnston noted the purpose of 

§ 652.150 “‘is to protect employees from unscrupulous or careless

employers who fail to compensate their employees although they

are fully aware of their obligation to do so.’” Sabin, 251 Or.

at 1093 (quoting State ex rel. Nilsen v. Johnston et ux., 233 Or

132 - OPINION AND ORDER
103, 108 (1962)). In Wilson the court made clear that an

employer does not act willfully when it does not “fully know[]

that the historical circumstances triggering the obligation have

occurred (for example, that the employee has quit) or if it acts

based on an innocent miscalculation that is not careless.” 197

Or. App. at 662–63. 

Here the record reflects Defendant knew when its Oregon

restaurants were transferred to franchisees and which employees

were working in its restaurants at the time of the transfer. 

Defendant does not point to any evidence to indicate that it was

unaware of any of the “historical circumstances” that triggered

its obligation to pay all of the relevant employees their final

wages within the time required under Oregon law. Defendant

appears to be, at best, the kind of “careless employer” that the

Sabin court concluded violated Oregon’s wage-and-hour laws

willfully. 276 Or. at 1093. See also Elonis v. U.S., 135 S. Ct.

2001, 2009 (2015)(“The familiar maxim ignorance of the law is no

excuse typically holds true. Instead, . . . 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].”)(quotation omitted)).

The Court, therefore, concludes on this record that

Defendant’s failure to pay certain employees their final wages

within the time required under Oregon law was willful and that

133 - OPINION AND ORDER
Plaintiffs are entitled to penalty wages pursuant to § 652.150.

II. Calculation of Penalty Wages

Plaintiffs note in their Motion for Prima Facie Liability on

Franchise Transfer Claims that Defendant’s expert prepared a

report indicating “within the three-year statute of limitations

for penalty wages, 736 employees received their final paychecks

at least one day after the statutory due date. Plaintiffs are

willing to accept these figures.” Pls.’ Mot. at 2. Plaintiffs

also appear to acknowledge that any penalty calculation is

limited to the three-year statue-of-limitations period.

Czechowski states in his expert report that he reviewed the

biweekly payroll data for Defendant’s Oregon employees over the

relevant period and calculated the potential statutory penalty

under two different scenarios:

The first scenario calculates the potential

statutory penalty based on the actual number of

allegedly late days. For this, I determined which

final paychecks were paid on a date after their

location’s franchise date. For each day past the

franchise date, eight hours at the given

employees’ hourly pay rate at the time was

calculated, capped at 30 days. Under this

scenario, . . . [f]or the limited 3-year statute

of limitations period . . ., 736 employees had

late final paychecks. This amounts to statutory

penalties totaling $67,027.

* * *

To assess potential statutory penalties under a

second scenario where a full 30-day penalty for

all employees with a final paycheck violation is

assumed, I calculated exactly 30 days x 8 hours x

the employee’s hourly rate at the time of

134 - OPINION AND ORDER
franchising for each employee with a late final

paycheck. . . . [U]sing a 3-year statute of

limitations[, a] full 30-day penalty for all

employees with late final paychecks from 

August 13, 2007 to present yields a total of

$1,674,910.

Decl. of Jon Egan, Ex. 31 at 81.

In their Motion for Summary Judgment on the Issue of Damages

under O.R.S. § 652.140 Plaintiffs urge the Court to adopt

Czechowski’s second method of calculating statutory penalties for

Defendant’s failure to pay certain employees’ final wages timely. 

Section 652.150, however, does not authorize 30 days of penalty

wages for every employee who was not paid within the time

required by Oregon law. Instead § 652.150(1) provides when an

employer fails to pay any wages due at the time required under

Oregon law, “the wages . . . of the employee shall continue from

the due date . . . until paid,” but not for more than 30 days

from the due date. Emphasis added. The record reflects

Defendant paid certain employees at different times after the due

date. For example, Defendant paid some employees’ wages only one

day after the due date. Section 652.150(1) permits penalty wages

only until the employer pays the wages for up to 30 days after

the due date. Thus, employees who were paid within 30 days of

the due date are not entitled to 30 days of penalty wages. 

Here the Court concludes Czechowski’s first scenario is

the proper method to calculate penalty wages for the franchisetransfer class. The Court, therefore, GRANTS Plaintiffs’ Motion

135 - OPINION AND ORDER
(#174) for Partial Summary Judgment on the Issue of Prima Facie

Liability on Their Franchise Transfer Claims. The Court also

GRANTS in part Plaintiffs’ Motion (#178) for Partial Summary

Judgment on the Issue of Damages under O.R.S. 652.140 to the

extent that the Court concludes 

1. Defendant did not timely pay certain employees their

final wages on transfer of its restaurants to the

franchisees in violation of Oregon Revised Statutes 

§ 652.140;

2. Defendant’s failure to pay certain employees’ final

wages timely was willful; and

3. Czechowski’s first method is the proper method of

calculating penalty wages.

The Court, however, DENIES in part Plaintiffs’ Motion (#178)

for Partial Summary Judgment on the Issue of Damages under O.R.S.

652.140 to the extent that the Court declines to decide at this

stage of the proceedings the total damages due to Plaintiffs and

other class members on the franchise-transfer claim. The Court

concludes calculation of the exact amount of damages must await

further input from the parties after they have had the

opportunity to confer meaningfully as to the rulings in this

Opinion and Order and to determine whether they can reach an

agreement as to the amount of any claimed damages to be paid.

136 - OPINION AND ORDER
PLAINTIFFS’ MOTION (#175) FOR PARTIAL SUMMARY JUDGMENT

ON THE ISSUE OF DAMAGES UNDER O.R.S. 652.615

For the reasons that follow the Court DENIES Plaintiffs’

Motion (#175) for Partial Summary Judgment on the Issue of

Damages under O.R.S. 652.615.

In their Motion for Partial Summary Judgment on the 

Issue of Damages under O.R.S. 652.615 Plaintiffs seek an 

award of $3,709,925.60 for wrongful WBF deductions and wrongful

shoe deductions together with pre-judgment interest through 

February 14, 2019.

As noted, however, the Court has concluded material disputes

of fact preclude summary judgment on the issue of the propriety

of the shoe deductions. In addition, the Court has concluded

Plaintiffs may recover one $200 sum or actual damages per classmember employee pursuant to § 652.615 for any improper WBF

withholdings. The Court, therefore, declines to award Plaintiffs

a specific amount of damages pursuant to Oregon Revised Statutes 

§ 652.615 at this stage of the proceedings. The Court or another

fact-finder will determine the damages based on all of

Plaintiffs’ claims at the same time so as to avoid duplication of

effort and the waste of judicial resources. 

Accordingly, the Court DENIES Plaintiffs’ Motion (#175) 

for Partial Summary Judgment on the Issue of Damages under O.R.S.

652.615 as to damages for shoe and WBF deductions at this stage

of the litigation. 

137 - OPINION AND ORDER
PLAINTIFFS’ MOTION (#176) FOR PARTIAL SUMMARY

JUDGMENT ON THE ISSUE OF DAMAGES UNDER O.R.S. 653.025

and PLAINTIFFS’ MOTION (#177) FOR PARTIAL SUMMARY JUDGMENT

ON THE ISSUE OF DAMAGES UNDER O.R.S. 653.261

For the reasons that follow the Court DENIES Plaintiffs’

Motion (#176) for Partial Summary Judgment on the Issue of

Damages under O.R.S. 653.025 and DENIES Plaintiffs’ Motion (#177)

for Partial Summary Judgment on the Issue of Damages under O.R.S.

653.261.

In their Motion for Partial Summary Judgment on the Issue of

Damages under O.R.S. 653.025 Plaintiffs note they have

“filed . . . motion[s] for summary judgment on the issue of

liability for both of their wrongful-deduction categories of

claims (Workers’ Benefit Fund over-deductions and Shoe

deductions). If one or both of those motions are granted, the

Court should award the class damages for violations of Oregon’s

minimum-wage law.” Plaintiffs seek the full amount of minimum

wages due to them as well as penalty wages pursuant to § 652.150.

Similarly, in their Motion for Partial Summary Judgment on

the Issue of Damages under O.R.S. 653.261 Plaintiffs request the

Court to award “the class damages for violations of Oregon’s

overtime law.” Plaintiffs seek the full amount of overtime due

to them as well as penalty wages pursuant to § 652.150.13

13 It does not appear that either Motion addresses or

requests penalty wages for Plaintiffs’ final-paycheck claim

related to the Franchise Transfer Class. 

138 - OPINION AND ORDER
As noted, Plaintiffs made clear in their Response to

Defendant’s Motion for Summary Judgment No. 3 that they “have

never advocated for the availability of more than one penalty in

the same workweek - a single deduction that violated both the

Oregon minimum wage and overtime would only entitle the employee

to one penalty under O.R.S. § 652.150.” Thus, Plaintiffs

acknowledge they may not receive more than one award of penalty

wages pursuant to § 652.150 for WBF or shoe deductions that

reduced the employees’ wages below minimum wage and resulted in

those employees not receiving the proper amount of overtime. 

The Court has concluded Plaintiffs may recover statutory

damages under § 652.615 as well as penalty wages under § 652.150

as to their WBF and/or shoe-deduction claims. The Court,

however, has also concluded material disputes of fact exist as to

the shoe deductions, and, therefore, the Court has denied the

parties’ motions for summary judgment related to Plaintiffs’ Shoe

Claims.

The Court has also concluded Plaintiffs have established

Defendant wrongfully deducted WBF amounts from employees’

paychecks. The Court, however, has also concluded Plaintiffs’

WBF penalties are constrained by the relevant statutory

limitations periods for penalties arising from the failure to pay

minimum wages and sufficient overtime the Court declines to

decide the amount of damages on Plaintiffs’ various claims

139 - OPINION AND ORDER
piecemeal. 

In summary, because material disputes of fact exist as to

Plaintiffs’ shoe-deduction claim and because the Court declines

to decide the amount of damages on Plaintiffs’ various claims

piecemeal, the Court DENIES Plaintiffs’ Motion (#176) for Partial

Summary Judgment on the Issue of Damages under O.R.S. 653.025 and

Plaintiffs’ Motion (#177) for Partial Summary Judgment On the

Issue of Damages under O.R.S. 653.261.

CONCLUSION

For these reasons, the Court

1. DENIES Defendant’s Motion (#161) for Summary

Judgment No. 1 - Arbitration of Claim;

2. DENIES Defendant’s Motion (#162) for Summary

Judgment No. 2 - WBF Deduction Claims Barred by

Tax Laws;

3. GRANTS in part and DENIES in part Defendant’s

Motion (#163) for Summary Judgment No. 3 -

Remedies Related to Alleged Wrongful Deductions

Are Limited;

4. GRANTS Defendant’s Motion (#164) for Summary

Judgment No. 4 - Breach of Fiduciary Duty Tort

Claims is Time-Barred;

5. DENIES Defendant’s Motion (#165) for Summary

Judgment No. 5 - Quasi- Contract/Unjust Enrichment

Claim Fails as a Matter of Law;

6. GRANTS Plaintiffs’ Motion (#172) for Partial

Summary Judgment on the Issue of Prima Facie

Liability on Their Workers' Benefit Fund Claims

7. DENIES Plaintiffs’ Motion (#173) for Partial

140 - OPINION AND ORDER
Summary Judgment on the Issue of Prima Facie

Liability on Their Shoe Claims

8. GRANTS Plaintiffs’ Motion (#174) for Partial

Summary Judgment on the Issue of Prima Facie

Liability on Their Franchise Transfer Claims

9. DENIES Plaintiffs’ Motion (#175) for Partial

Summary Judgment on the Issue of Damages under

O.R.S. 652.615

10. DENIES Plaintiffs’ Motion (#176) for Partial

Summary Judgment on the Issue of Damages under

O.R.S. 653.025

11. DENIES Plaintiffs’ Motion (#177) for Partial

Summary Judgment on the Issue of Damages under

O.R.S. 653.261

12. GRANTS in part and DENIES in part Plaintiffs’

Motion (#178) for Partial Summary Judgment on the

Issue of Damages under O.R.S. 652.140

13. GRANTS in part and DENIES in part Plaintiffs’

Motion (#179) for Partial Summary Judgment on Jack

in the Box’s Third Affirmative Defense (Authorized

Deductions)

14. GRANTS in part and DENIES in part Plaintiffs’

Motion (#180) for Partial Summary Judgment on Jack

in the Box’s Fourth Affirmative Defense (Benefit

to Employees)

15. GRANTS in part and DENIES in part Plaintiffs’

Motion (#181) for Partial Summary Judgment on Jack

in the Box’s Fifth Affirmative Defense (Valid

Deduction).

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

than December 12, 2019, a Joint Status Report that sets forth a

concise summary of all remaining unresolved claims and defenses

and that includes a jointly proposed case-management schedule to

advance this case to ultimate resolution. The Court will conduct

141 - OPINION AND ORDER
a status conference with the parties after receiving and

reviewing their Joint Status Report.

IT IS SO ORDERED.

DATED this 13th day of November, 2019.

 s/ Anna J. Brown 

ANNA J. BROWN

United States Senior District Judge

142 - OPINION AND ORDER