Opinion
3:14-CV-01092-BR
06-05-2020
JESSICA GESSELE, ASHLEY ORTIZ, NICOLE GESSELE, TRICIA TETRAULT, and CHRISTINA MAULDIN, on behalf of themselves and all others similarly situated, Plaintiffs, v. JACK IN THE BOX, INC., a corporation of Delaware, Defendant.
JON M. EGAN Attorney for Plaintiffs DOUGLAS S. PARKER JENNIFER NETH WARBERG DON STAIT Attorneys for Defendant
JON M. EGAN Attorney for Plaintiffs
DOUGLAS S. PARKER JENNIFER NETH WARBERG DON STAIT Attorneys for Defendant
OPINION AND ORDER
Anna J. Brown United States Senior District Judge
This matter comes before the Court on Plaintiffs' Renewed Motion (#225) to Certify Unpaid Break Class. The Court concludes the record is sufficiently developed, and, therefore, oral argument would not be helpful to resolve this Motion.
For the reasons that follow, the Court DENIES Plaintiff's Motion.
FACTUAL BACKGROUND
Because the parties are familiar with the facts underlying this action, the Court sets forth only the facts that are relevant to the pending Motion.
Before September 30, 2011, Defendant Jack in the Box, Inc., owned and operated several restaurants in Oregon. From May 2006 through September 2011 Defendant sold its Oregon restaurants to various franchise operators as follows:
May 1, 2006: six stores
March 29, 2010: 21 stores
March 7, 2011: 13 stores
September 30, 2011: three storesAfter September 30, 2011, Defendant did not own or operate any stores in Oregon and did not have any Oregon employees. The last Jack in the Box location 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
Defendant has a national company-wide meal-and-break policy. During the relevant period the Oregon-specific portion of Defendant's policy provided employees were to receive a “30 minute meal period for shifts of 6 hours or more.” Parker Decl., Ex. AA at 2-3. In addition, Defendant's Oregon employees signed On-Duty Meal Policy Agreements in which employees “agree[d] with [Defendant] that on those sporadic occasions when the nature of my work prevents me from being relieved of all duties during my required meal period, I shall be paid for those meal periods.” Egan Decl., Ex. 30. It is also undisputed that on occasion Plaintiffs had meal periods of less than 30 minutes. The record reflects restaurant managers were authorized to ask employees to come back early from their meal periods if the restaurant was “really busy” and that Plaintiffs expected to be paid for their meal periods when they did not take the entire 30 minutes due to being asked to return to work by a manager.
At the beginning of the class period (August 13, 2004) Defendant used the timekeeping system Kronos. The Kronos system consisted of wall-mounted keypunch pads that fed employee key- punch information into the on-site office computer running the Kronos software. To log a time-punch into the Kronos system the employee entered his employee number using the keypad and pressed “enter.” The system did not provide a way for employees to indicate whether they were punching in or out of work. Kronos also did not contain a way for employees to indicate whether they were punching in or out from a shift, a rest break, or a meal period. The Kronos system simply logged the time of an employee's various punches, and Defendant's computers compared the punches to each other to determine the reason for each punch. Under the Kronos system each employee should have an even number of punches each day that he worked because each “in” punch should be paired with an “out” punch. If there were an odd number of punches for an employee, the computer would produce an error message and a manager had to fix it manually before the computer would accept the employee's punches for the day.
Defendant selected the Kronos system, which used punch-in and punch-out calculation rules that did not pay employees for any breaks longer than 20 minutes regardless of whether the break was a rest break (which Oregon law does not require to be paid) or a meal period and regardless whether an employee was called back to work from a meal period by a manager. For example, one of Defendant's People and Organizational Effectiveness Managers, Shelly Rohlfs, testified at deposition:
Q: Are there breaks for which [Defendant] pays its employees and breaks for which it doesn't pay its employees?
A: Yes.
Q: Okay. Where is the dividing line between those two?
A: So we have breaks that - anything less than 20 minutes is paid, anything more than 20 minutes is not.
Q: What about 20 on the dot?
A: 20 minutes or - or less is -is paid.
Q: Okay. Is . . . 30 minutes the companywide standard for how long managers are supposed to give for a . . . meal period . . . ?
A: 30 minutes is the practice. We give - we call a half-an-hour [meal] break.
Q: But if for some reason someone isn't able to take their full 30 minutes, let's say that their manager asks them to come back afer 28 because of the press of business or for whatever other reason. . . . Your understanding is that it's unpaid as long as it's more than 20 minutes?
A: That's my understanding.
Q: So what's your understanding of [Defendant's 30-minute meal policy]?
A: Okay. So if . . . somebody is sent on a meal period and they were unable to finish their meal period, then they would be paid for that
time that they were out. So if it was, “I sent you on your half-an-hour break and you were only able to take 15 minutes, ” you'd be paid for that time. Wouldn't count as not paid.
Q: I see. But if . . . to keep with your example, if you sent me on the half-an-hour break and I took 22 minutes, that wouldn't be paid; is that right?
A: Based on the way it calculates today, yes.
Q: Okay. And to your understanding, that's the way it's always been calculated?
A: Yes.Egan Decl., Ex. 28 at 2-4, 7-8. Thus, Defendant did not pay employees for interrupted meal periods that were more than 20 minutes and less than 30 minutes. As noted, under the Kronos system there was not any way for an employee or manager to indicate whether a break of more than 20 minutes but less than 30 minutes was an interrupted meal period or a long rest break. Defendant also did not keep any records from which it could be determined whether an in-and-out punch combination that was more than 20 minutes but less than 30 minutes was an interrupted meal period or a longer rest break.
Beginning in February 2010 Defendant switched to a different timekeeping system called Jack's Timekeeping, which uses a software clock integrated into the point-of-sale cash registers used by employees. Under Jack's Timekeeping employees must indicate when they are punching in or out whether the punch is for the beginning or the end of a shift, the beginning or the end of a rest break, or the beginning or the end of a meal period. Unlike the Kronos system, which relied on the time between two punches to decide whether an employee was on a meal period or rest break, Jack's Timekeeping relies on employees' designations when they punch in or out. In addition, under Jack's Timekeeping if an employee presses the “End Meal” button less than 30 minutes after the employee has selected “Start Meal, ” an error message pops up noting the meal period was not long enough and a supervisor must override the system to enter the shorter meal period. Thus, employees cannot clock in early from a 30-minute meal period without a supervisor override.
Defendant switched each of its Oregon stores from Kronos to Jack's Timekeeping on various dates from February 8, 2010, through February 12, 2012. Christina Mauldin was the only named Plaintiff working for Defendant at the time that Defendant began to move its stores to Jack's Timekeeping. The store at which Mauldin worked, however, did not change to Jack's Timekeeping until after Mauldin stopped working for Defendant.
After Defendant imports all of its employees' time punches from Jack's Timekeeping into its computers in San Diego, Defendant's system breaks up the employees' punched time into various time codes that determine whether they constitute a paid break. These time codes include BRK (break), LBP (long break paid), and LBU (long break unpaid). Under Jack's Timekeeping rest periods of 20 minutes or less are coded as BRK or LBP and are paid. The portion of any rest period that goes over 20 minutes is coded LBU, and the portion of the period over 20 minutes is not paid. Meal periods under Jack's Timekeeping are unpaid regardless of length. When an employee clocks out using the “Start Meal” button, the resulting break is coded as SGM (short graveyard meal), SGMPR (short graveyard meal payroll reallocation), or SMB (short meal period) and is unpaid regardless of its length.
Plaintiffs note in their Motion that unpaid meal periods longer than 30 minutes are not at issue in this action.
PROCEDURAL BACKGROUND
On August 13, 2010, Jessica Gessele, Ashley Ortiz, Nicole Gessele, and Tricia Tetrault, on behalf of all those similarly situated, filed a putative class-action Complaint (Gessele I, Case No. 3:10-CV-00960-ST) in this Court against Jack in the Box for violation of the minimum-wage and overtime provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq., and various Oregon wage-and-hour laws. Gessele I was assigned to Magistrate Judge Janice M. Stewart.
In Gessele I Ashley Ortiz proceeded as Ashley Gessele and Christina Mauldin proceeded as Christina Luchau.
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 after 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 January 28, 2013, Magistrate Judge Stewart issued Findings and Recommendation in which she recommended granting in part and denying in part the Motion to Certify. Relevant to Plaintiffs' current Motion, Magistrate Judge Stewart recommended denying certification of the proposed Rule 23(b)(3) Break Classes and Subclasses.
On April 1, 2013, Judge Ancer Haggerty entered an Order adopting the January 28, 2013, Findings and Recommendation.
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 this court may not exercise supplemental jurisdiction over Plaintiffs' state-law claims.
On June 26, 2013, Gessele I was reassigned to this Court.
On November 5, 2013, Jason Diaz filed a Consent to Join Law Suit in Gessele I. Diaz, however, did not become a named Plaintiff in Gessele I.
On March 19, 2014, this Court issued an Opinion and Order in Gessele I in which it granted Defendant's Motion for Summary Judgment on the ground that Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin were required to file written consents with the Court to commence their FLSA collective action, but they failed to file those written consent forms timely. The Court, therefore, concluded it never acquired jurisdiction over the FLSA claims of Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin, and, as a result, the Court could not exercise supplemental jurisdiction over their state-law claims. The Court also concluded Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin did not file written consents within the applicable limitations period; neither equitable tolling nor equitable estoppel applied; and, therefore, their FLSA claims were barred by the applicable statute of limitations. 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 timely written consent forms as required by the FLSA. The Court, therefore, never acquired jurisdiction over Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin's FLSA claims, and, as a result, the Court could not exercise supplemental jurisdiction over their state-law claims. Accordingly, on May 15, 2014, the Court entered a Judgment dismissing the entire matter without prejudice.
On June 10, 2014, Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, Christina Mauldin, and Jason Diaz filed a putative class action against Jack in the Box in Multnomah County Circuit Court (Gessele II) in which they alleged claims for violation of Oregon's wage-and-hour laws, violation of the FLSA, breach of fiduciary duty, and equitable and quasi-contractual claims for return of money.
On July 9, 2014, Defendant removed Gessele II to this Court on the ground of federal-question jurisdiction based on Plaintiffs' FLSA claims and/or jurisdiction under the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d)(2).
On August 8, 2014, Plaintiffs filed a Motion to Remand Case to State Court on the grounds that (1) issue preclusion/ collateral estoppel barred litigation of Gessele II in this Court; (2) if issue preclusion did not bar litigation, the “law of the case” barred litigation in this Court; and (3) judicial estoppel barred litigation of Gessele II in this Court even if neither issue preclusion nor law of the case barred such litigation.
On October 17, 2014, the Court entered an Opinion and Order in Gessele II in which it granted in part and denied in part Plaintiffs' Motion to Remand. The Court concluded (1) although issue preclusion barred relitigation as to whether the Court had 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 brought for the first time in Gessele II; (2) relitigation of this Court's jurisdiction was not barred by the law of the case; (3) because Diaz was never a named Plaintiff in Gessele I, the Court's decision regarding its jurisdiction over that matter did not apply to Diaz, and, therefore, judicial estoppel did not apply nor require remand of Diaz's FLSA claims; (4) judicial estoppel applied to and estopped Defendant from relitigating the issue of this Court's lack of jurisdiction over the FLSA claims of Jessica Gessele, Ashley Ortiz, Nicole Gessele, Tricia Tetrault, and Christina Mauldin; and (5) Defendant did not waive its right to remove Gessele II by pursuing dismissal in Gessele I on jurisdictional grounds.
At some point Defendant filed an appeal of the Court's October 17, 2014, Opinion and Order in the Ninth Circuit.
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) Defendant is precluded from relitigating “the jurisdictional issues” in Gessele I by the doctrine of issue preclusion; (2) because Gessele I did not address the timeliness of the new FLSA claims asserted in Gessele II nor jurisdiction under CAFA, Defendant “is not precluded from invoking federal jurisdiction” in Gessele II; (3) Defendant's position in Gessele I that the Court lacked jurisdiction over the FLSA claims asserted in that matter “is not inconsistent with [Defendant's] . . . [assertion in Gessele II that] there is no time bar to the newly asserted FLSA claims, or that the district court has CAFA jurisdiction over the state-law claims”; and (4) Defendant did not waive its right to remove Gessele II “through its filings in the state court or its prior conduct in this litigation.”
On August 31, 2015, Defendant filed a Motion for Partial Summary Judgment in Gessele II; Plaintiffs filed a Motion for Partial Summary Judgment (Statute of Limitations) and to Establish Tolling for FLSA Collective Members; and Plaintiffs filed a Motion for Partial Summary Judgment on Jack in the Box's 8th (Private Right Of Action), 9th (Due Process) and 12th(Preemption) Affirmative Defenses. The Court took the Motions under advisement on October 5, 2015.
On December 22, 2015, the Court issued an Order in which it denied as premature (1) those portions of Defendant's Motion for Partial Summary Judgment and Plaintiffs' Motion for Partial Summary Judgment (Statute of Limitations) relating to whether the California putative class members are subject to binding settlements in two California state cases; (2) those portions of Defendant's Motion for Partial Summary Judgment and Plaintiffs' Motion for Partial Summary Judgment (Statute of Limitations) relating to Defendant's status as a joint employer; and (3) Plaintiffs' Motion for Partial Summary Judgment on Jack in the Box's 8th (Private Right Of Action), 9th (Due Process) and 12th (Preemption) Affirmative Defenses as to Defendant's Ninth Affirmative Defense. The Court granted the parties leave to renew those Motions after limited discovery and after the Court issued its Opinion and Order on the remaining portions of the pending Motions.
On February 16, 2016, the Court heard oral argument on those portions of the pending Motions for Partial Summary Judgment that it did not address in its December 22, 2015, Opinion and Order.
On March 10, 2016, the Court issued an Opinion and Order in which it granted Defendant's Motion for Partial Summary Judgment; denied Plaintiffs' Motion for Partial Summary Judgment (Statute of Limitations) and to Establish Tolling; and granted in part and denied in part Plaintiff's Motion for Partial Summary Judgment on Jack in the Box's 8th (Private Right Of Action), 9th (Due Process) and 12th (Preemption) Affirmative Defenses. Relevant to Plaintiffs' current Motion the Court granted Plaintiffs' Motion for Partial Summary Judgment as to Defendant's Eighth Affirmative Defense and dismissed that Defense with prejudice. In summary, the Court's rulings had the following effect:
(1) This matter would go forward as to named Plaintiffs' state wage-and-hour claims; Jason Diaz's FLSA claims; and named Plaintiffs' FLSA claims from March 29, 2010, to the present, and
(2) There were not any motions pending for certification of a class or collective action or any motions pending as to Defendant's status as a joint employer, as to the effect of the California settlement, or as to whether Diaz's FLSA claims are subject to mandatory arbitration.
On March 24, 2016, the parties filed a Joint Statement in which they agreed the following claims remained in this matter: (1) Plaintiffs' state wage-and-hour claims; (2) Plaintiffs' Seventh and Eighth Claims to the extent that they do not overlap with state or federal statutory claims; (3) Diaz's FLSA claims; and (4) named Plaintiffs' FLSA claims from March 29, 2010, to the present.
On July 7, 2016, the Court issued an Order in which it granted Defendant leave to file dispositive motions as to
(1) All FLSA claims from March 29, 2010, to the present on the ground that Defendant is not a joint employer of franchisee employees;
(2) All FLSA claims asserted by Jason Diaz on the
ground that Diaz failed to file a written consent under the FLSA;
(3) All of Diaz's state and federal claims on the grounds that (a) he is required to arbitrate those claims and (b) he failed to pursue his claims in arbitration after his individual lawsuit (3:11-cv-0006-JO) was dismissed; and
(4) All FLSA claims of any California putative class members subject to the class settlements in the cases of Frederick v. Jack-In-The-Box, Inc., No. RIC50144, and Olvera v. Jack In The Box, Inc., No. 37-2013-00072707.
On September 1, 2016, Defendant filed the Motion for Partial Summary Judgment 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 from March 29, 2010, 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 he is required to
arbitrate his claims under the terms of the arbitration agreement; and
3. denied as premature Defendant's Motion as to the FLSA claims of California putative class members subject to the class settlements in the Frederick and Olvera cases.
On 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.
In May 2019 the parties filed several Cross-motions for Summary Judgment.
On November 13, 2019, the Court granted in part and denied in part both parties' Motions for Summary Judgment.
On March 27, 2020, Plaintiffs filed a Renewed Motion (#225) to Certify Unpaid Break Class. The Court took Plaintiffs' Motion under advisement on May 15, 2020.
OREGON ADMINISTRATIVE RULE 839-020-0050Before June 1, 2010, the Oregon Administrative Rule related to meal periods provided
an employee who has worked at least six but not more than eight hours is entitled to an appropriate meal period, defined to be at least 30 minutes when the employee is relieved of all duty. If the employee must remain on call or is not relieved of all duties, the meal period is not deducted from the time worked.Cooper v. Thomason, No. CIV 06-1018-KI, 2007 WL 306311, at *3 (D. Or. Jan. 26, 2007)(citing 839-020-0050(1)(a)(pre-June 1, 2010)). On June 1, 2010, Oregon Administrative Rule 839-020-0050 was amended to provide:
[E]very employer shall provide to each employee, for each work period of not less than six or more than eight hours, a meal period of not less than 30 continuous minutes during which the employee is relieved of all duties. . . . [I]f an employee is not relieved of all duties for 30 continuous minutes during the meal period, the employer must pay the employee for the entire 30-minute meal period.
In its Response to Plaintiffs' March 2, 2017, Motion for Rule 23(b)(3) Class Certification Defendant asserted the amendment to OAR 839-020-0050 in combination with “jurisprudence in this Court . . . make[] clear that an employer does not violate the regulation if it has ‘provided' the requisite breaks regardless of whether the employee has always taken the full 30-minute break.” Defendant relied on Marshall v. Pollin Hotels II, LLC, in which Magistrate Judge Paul Papak noted:
Finally, regarding the fifth factor, Oregon law requires employers to provide employees a continuous 30-minute break for each work period over six hours. Or. Admin. R. 839-020-0050. However, this court has previously construed that rule as merely requiring employers to provide 30-minute breaks; it does not require employers to police their employees' breaks. Weir v. Joly, No. 3:10-CV-898-HZ, 2011 WL 6778764, at *7 (D. Or. Dec. 23, 2011). As the Weir court explained:
Weir also seems to take the position that an employer must pay an employee for a break of less than 30 minutes, no matter the reason. For instance, if the employee took a 29-minute meal period and happened to clock in a minute before 30 minutes had passed, the employer must pay the employee for the entire 30 minutes. Although Oregon courts have not spoken on this issue, I do not agree with Weir's interpretation of the rule. The rule requires that employers “provide” a meal period of 30 continuous minutes during which the employee is relieved of all duties. OAR 839-020-0050. To require an employer to police when an employee clocks in and out would be an unreasonable burden on the employer. The outcome would be an employee who could take a proper meal period, but then demand that it [be] paid simply by clocking in early.170 F.Supp.3d 1290, 1300 (D. Or. 2016)(quoting Weir, 2011 WL 6778764, at *7 (footnote omitted)).
Plaintiffs, in turn, asserted in their Reply that Oregon Administrative Rules require employers to be responsible for monitoring employees' rest breaks and meal periods contrary to the court's conclusion in Marshall. Specifically, Rule 839-020-0040(2) provides: “Work requested or required is considered work time. Work not requested, but suffered or permitted is considered work time.” Similarly, Rule 839-020-0040(4) provides: “It is the duty of the employer to exercise control and see that the work is not performed if it does not want the work to be performed. The mere promulgation of a policy against such work is not enough.” In Dusan-Speck v. St. Charles Health System, Inc., Chief Judge Ann Aiken summarized Rule 839-020-0040 as follows: “If an employer does not want work performed, then it is responsible for ensuring that such work is not performed; it cannot sit back and accept the benefits of an employee's ‘work time' without providing compensation.” No. 6:13-CV-00358-AA, 2013 WL 4083617, at *2 (D. Or. Aug. 9, 2013).
I. The Parties' Past Arguments Related to Oregon Administrative Rule 839-020-0050
In its Response to Plaintiffs' March 2, 2017, Motion for Rule 23(b)(3) Class Certification Defendant asserted the Court should not certify Plaintiffs' Unpaid Break Class because there is not any evidence of a company-wide policy or practice of calling employees back from meal periods early, and any deviation from Defendant's stated 30-minute meal-period policy would be a highly individualized situation requiring the Court to answer numerous individualized questions, including:
• Whether that employee was compensated appropriately for each meal period;
• Whether the employee mistakenly clocked back in early following his or her meal period;
• Whether the employee who mistakenly clocked back in early was actually provided an opportunity to be relieved of all duties for 30 minutes;
• Why the employee may have clocked back in early;
• Whether the employee failed to clock out for a meal period but was actually provided an opportunity to be relieved of all duties for 30 minutes;
• Whether the employee had knowledge of Defendant's break policies;
• Whether a supervisor had to override/edit an employee's early clock in;
• If a supervisor did perform an override/edit, whether that action converted a short meal period into a paid rest break; and
• Whether anything was done by a supervisor to account for a short meal period, including giving the employee an additional break later in the shift.Defendant asserted the specific circumstances create individualized issues rather than issues common to the class. For example, Ashley Ortiz had three breaks that were between 20 and 30 minutes in 445 work days. Parker Decl., Ex. Y at 1. Ortiz testified she did not remember how many times her manager called her back from a meal period, but she recalled it was generally due to a “big rush of customers.” Parker Decl., Ex. A at 5. Ortiz testified she could not remember whether she was allowed to make up the time that she missed in her 30-minute meal period when she was called back early. Jessica Gessele had 41 breaks between 20 and 30 minutes in 663 work days. Parker Decl., Ex. Y at 1. All but two of those breaks were between 27 and 29 minutes. Jessica Gessele testified she would cut her meal period short when she was a team leader if she saw another employee struggling. Parker Decl., Ex. B at 9. Jessica Gessele testified she was not aware whether employees on her shift failed to record a 30-minute meal period when she was a team leader, but she did not ask her employees to take less than 30-minute meal periods. Id. Jessica Gessele did not recall why any specific meal period was less than 30 minutes. Nicole Gessele had 14 breaks between 20 and 30 minutes in 544 work days. Parker Decl., Ex. Y at 2. Nicole Gessele testified she would occasionally return voluntarily from her meal period before 30 minutes had passed because the restaurant was “swamped, ” and occasionally her manager asked her to return from her meal period before 30 minutes. Parker Decl., Ex. C at 3. Nicole Gessele stated she made sure members of her team took meal periods when she was a team leader. She did not, however, track whether her team members punched back in at 28 or 29 minutes because she “wasn't supervising their punch-in and punch-out.” Parker Decl., Ex. C at 4. Christina Mauldin had 16 breaks between 20 and 30 minutes in 309 work days. Parker Decl., Ex. Y at 1. Mauldin testified she could not remember why she took a break between 20 and 30 minutes on any particular date, but if she clocked back in before 30 minutes on a meal period it was because she was the only manager on the floor and had to go back if there was a rush, because she was called back by her manager, or because she saw other employees needed help. Parker Decl., Ex. D at 20. Mauldin also testified she would talk to any employee or their team leader when she was a manager if the employee was taking less than 30-minute meal periods. Id. Jason Diaz, who worked for Defendant in Oregon but who is no longer a named Plaintiff, testified he did not recall a time when he failed to get a full 30-minute meal period or was required to work while on a meal period. Parker Decl., Ex. BB at 6-7. Diaz also testified he did not remember any employees complaining to him that they did not receive meal periods. Id. at 8. Thus, all of the named Plaintiffs and Diaz testified if they forgot to punch in or out from a break, their managers would often point it out and adjust the system to reflect their times in and out.
II. The Court's Evaluation of Oregon Administrative Rule 839-020-0050 in Its June 12, 2017, Opinion and Order
At the time the Court issued its June 12, 2017, Opinion and Order in which it denied Plaintiffs' Motion to Certify as to the unpaid break class, the Oregon courts had not addressed and this District's interpretation of the law was unsettled as to whether an employer must pay an employee for a full 30-minute meal period when the employer called the employee back to work before the end of the 30-minute period.
In its June 12, 2017, Opinion and Order the Court noted the record reflected among the named Plaintiffs that (1) there were various reasons why they may have taken breaks that lasted between 20 and 30 minutes, (2) they could not remember specifically why any particular break was between 20 and 30 minutes, and (3) Defendant's supervisors were trained to try to ensure that their employees received 30-minute meal periods. Thus, for each break that lasted between 20 and 30 minutes the fact-finder would have to examine the reason the employee clocked back in after 20 minutes to determine whether the break at issue was a shortened meal period, a longer rest break, shortened at the request of a supervisor, or an accidental failure to punch back in timely from a break; whether the employee reported the discrepancy to his or her supervisor; and whether the supervisor attempted to correct the issue. The Court, therefore, concluded the individualized inquiry exceeded the common class questions, and resolution of the unpaid break claims was not amenable to efficient classwide resolution. Accordingly, the Court denied Plaintiffs' Motion to Certify the Unpaid Break Class.
DISCUSSION
Plaintiffs renew their Motion to Certify Unpaid Break Class on the ground that the Oregon Court of Appeals decision in Maza v. Waterford Operations LLC, 300 Or.App. 471 (2019), indicates this Court should certify Plaintiffs' unpaid break class. Specifically, Plaintiffs assert the Oregon Court of Appeals decision in Maza indicates individualized determinations of violations of Oregon Administrative Rule 839-020-0050 would no longer be needed to determine liability for unpaid breaks, and, therefore, the Court should certify the unpaid break class.
As in their March 2, 2017, Motion for Rule 23(b)(3) Class Certification, Plaintiffs again seek to certify an unpaid break class that consists of Defendant's Oregon employees who “clocked out for one or more breaks for which they were not paid (between 20 and 30 minutes in Kronos or time codes LBU, SMB, SGM, SGMPR or GAP in Jack's Timekeeping), during any workweek the regular payday for which was on or after August 13, 2004.”
Defendant asserts the Court should not certify Plaintiffs' unpaid break class because Plaintiffs do not have a cause of action based on violation of Oregon Administrative Rule 839-020- 0050 before June 1, 2010. Defendant also asserts the Oregon Court of Appeals decision in Maza is not retroactive, and, therefore, it does not resolve the individualized inquiry problem. Thus, Defendant contends the Court should deny Plaintiffs' Renewed Motion to Certify.
I. Defendant's Argument Regarding Plaintiffs' Claims before the June 1, 2010, Revision of Oregon Administrative Rule 839-020-0050
Defendant asserts Plaintiffs do not have a cause of action for violation of Oregon Administrative Rule 839-020-0050 before the June 1, 2010, revision because the June 1, 2010, change in Oregon Administrative Rule 839-020-0050 was not retroactive, the record reflects Defendant paid employees for the time they were punched in to work, and Defendant did not deduct meal-period time from employee's wages when they did not take a meal period. This Court, however, rejected these arguments in its March 10, 2016, Opinion and Order. As the Court noted in its March 10, 2016, Opinion and Order, Defendant asserted in its Eighth Affirmative Defense that “[t]here is no private cause of action for Plaintiffs' meal period claims brought under Oregon state law.” In particular, Defendant asserted Plaintiffs do not have any “Pre-July 2010 legal right to payment for meal periods shorter than 30 minutes absent an independent right to compensation.” Gessele v. Jack in the Box, Inc., No. 3:14-CV- 1092-BR, 2016 WL 1056976, at *14 (D. Or. Mar. 10, 2016). To support its position Defendant relied on Gafur v. Legacy Good Samaritan Hospital, 213 Or.App. 343 (2007), aff'd in part, rev'd in part, 344 Or. 525 (2008), and Rogers v. RGIS, LLP, 232 Or.App. 433, 434 (2009). Plaintiffs moved for summary judgment on Defendant's Eighth Affirmative Defense. This Court granted Plaintiffs' Motion and explained:
Magistrate Judge Stewart addressed the same issue and the parties' same arguments in Gessele I, and . . . her Findings and Recommendation was adopted by Judge Haggerty. Although the Findings and Recommendation and the Order adopting it were ultimately nullified by the Court's decision that
it lacked jurisdiction, the [following] analysis of Judges Stewart and Haggerty on this issue was thorough and well-supported. . .:
As in Gessele I, Plaintiffs' break claims in Gessele II are based on Defendant's alleged failure to pay for breaks that were not bona fide meal periods (because they were less than 30 minutes) rather than Defendant's failure to provide breaks at all.
Judge Stewart concluded even though Oregon Administrative Rule 839-020-0050 was not amended to provide explicitly a private right of action for unpaid meal periods until June 1, 2010, it did not bar plaintiffs' unpaid break claims in Gessele I. . . . Judge Haggerty adopted Magistrate Judge Stewart's Findings and Recommendation in full, including her conclusion that Plaintiffs had a . . . private right of action for their break claims. Because, as noted, the Court finds the reasoning of Magistrate Judge Stewart and Judge Haggerty is well-supported, the Court adopts their reasoning and concludes there is a private cause of action under Oregon state law for Plaintiff's meal-break claims as pleaded.Gessele, 2016 WL 1056976, at *14-16. Specifically, the Court agreed with Magistrate Judge Stewart's point that “‘Oregon employees have always had a private right of action to recover for time worked for which they were not paid. O.R.S. § 653.055. The legislature explicitly authorized BOLI to regulate meal and rest breaks, ORS 653.261, and pursuant to this authority, OAR 839-020-0050, mandates meal and rest breaks.' Gafur v. Legacy Good Samaritan Hosp. & Med. Ctr., 213 Or.App. 343, 346-47 (2007), aff'd in part, rev'd in part, 344 Or. 525 (2008).” Gessele, 2016 WL 1056976, at *14 (D. Or. Mar. 10, 2016)(quoting Gessele I Findings and Recommendation (#158) at 65). Thus, even before the June 1, 2010, amendment to Oregon Administrative Rule 839-020-0050 employees had a private right of action for meal-period and rest-break violations. Id.
In its Response to Plaintiffs' Renewed Motion to Certify Unpaid Break Class Defendant relies on the same arguments and authorities it relied on in Gessele I and in response to Plaintiffs' Motion to Summary Judgment as to Defendant's Eighth Affirmative Defense in Gessele II to assert for a third time that Plaintiffs do not have a cause of action for unpaid breaks in violation of Oregon Administrative Rule 839-020-0050 before the June 1, 2010, revision.
For the reasons stated by this Court in its March 10, 2016, and June 12, 2017, Opinions and Orders the Court concludes Plaintiffs have a cause of action for alleged meal-period violations because employees had a private right of action for meal-period violations even before the June 1, 2010, amendment of Oregon Administrative Rule 839-020-0050. The Court, therefore, declines to deny Plaintiffs' Renewed Motion to Certify Unpaid Break Claims on the ground that Plaintiffs do not have a cause of action for the alleged meal-period violations before the June 1, 2010, amendment to Oregon Administrative Rule 839-020-0050.
II. Maza Decision
As noted, the Court in its June 12, 2017, Opinion and Order declined to certify Plaintiffs' unpaid break class claims on the ground that the individualized inquiry exceeded the common class questions and resolution of the unpaid break claims was not amenable to efficient classwide resolution. Plaintiffs assert the decision in Maza nullifies the individualized inquiry, and, therefore, the Court should now certify Plaintiffs' unpaid break class claims.
Defendant, in turn, contends Maza is not retroactive, and, therefore, it does not nullify the individualized-inquiry issue of the unpaid break class.
In Maza the plaintiffs, who were hourly employees of the defendant, brought a putative class action against the defendant on the ground that the defendant paid “employee[s] less than the wages to which the employee[s] were entitled” in violation of Oregon Revised Statutes § 653.055. Specifically, the plaintiffs alleged “between certain dates, defendants' hourly employees took unpaid meal periods that were shorter than 30 minutes.” Maza, 300 Or.App. at 474. Plaintiffs sought certification of a class consisting of hourly employees of defendant who “are entitled to wages and penalty wages under OAR 839-020-0050(2)(b) for the shortened meal periods.” Id. The defendant asserted class certification was inappropriate because under Oregon Administrative Rule 839-020-0050(2)(b) “if an employer has authorized a 30-minute meal period, no liability for wages or penalty wages will attach for a shortened meal period, unless the employee was forced to return to work early. Thus, [according to the defendant] . . . each employee's claim depends on the circumstances of the shortened meal period.” Id. Plaintiffs, on the other hand, asserted fact-specific inquiries were not required because “the requirement to pay wages [for the full 30-minute meal period] under OAR 839-020-0050(2)(b) attaches [when] the record shows that a meal period was shortened, regardless of the cause.” Id. at 475. The trial court agreed with the defendant's interpretation of 839-020-0050(2)(b) and declined to certify the class, but it authorized the plaintiffs to file an interlocutory appeal to address the following question: “Whether an employer can be found strictly liable under OAR 839-020-0050(2) whe[n] an employee, regardless of the circumstances, takes less than the entire duty-free 30-minute lunch break to which the employee is otherwise entitled?” Id. On appeal the Oregon Court of Appeals adopted the plaintiffs' interpretation of 839-020-0050(2)(b) and concluded:
It is not entirely clear from the opinion whether the defendant paid its employees for the part of meal periods that was less than 30 minutes.
[T]he rule's text and context support plaintiffs' interpretation that the requirement to provide “a meal period of not less than 30 minutes during which the employee is relieved of all duties” means that a 30-minute meal is mandatory and, if not taken, the employer must pay the employee's
wages for the full 30-minutes.
[Thus, ] if an employee is not relieved of all duties for the prescribed minimum 30-minute meal period, OAR 839-020-0050(2)(b) requires that the employer pay the employee's wages for that period of time.Id. at 477-78. Finally, the court concluded “[b]ecause our conclusion requires the trial court to reconsider its rulings regarding the certification of a class under ORCP 32A, we vacate and remand the case to the trial court.” Id. at 480.
Plaintiffs assert the decision in Maza makes clear that individualized inquiry is no longer required for the unpaid break class because when an employee is not relieved of all duties for the required minimum of 30 minutes for a meal period, the employer is required to pay the employee for a full 30 minutes regardless of the reason the employee did not take the full meal period. Defendant, as noted, asserts the court's holding in Maza is not retroactive, and, therefore, it does not apply to Plaintiffs' unpaid break class claims.
In Antonnaci v. Davis the Oregon Court of Appeals explained:
The substantive rights and liabilities of persons affected by an event are defined by the law in effect at the time of the event, but the adjudication of those rights and liabilities is accomplished by the procedures in effect at the time of the adjudication. The . . . appropriate inquiry, therefore, is whether the [later] decision affected the substantive rights of the parties, so that we apply the law existing at the time of the injury. . . If, however, the [later decision]
was only a change in procedure, we apply the law existing at the time that the lawsuit was filed.108 Or.App. 693, 695-96 (1991). “[S]tatutes are presumed not to apply ‘retroactively' if doing so will impair existing rights, create new obligations or impose additional duties with respect to past acts.” State v. Tucker, 90 Or.App. 506, 509 (1988), aff'd, 307 Or. 386 (1989). See also Holmes v. State Acc. Ins. Fund, 38 Or.App. 145, 148 (1979)(“To give this legislation retroactive effect would . . . impose unforeseen liabilities on the insurer. The manner of adjudication is not effected. The injury occurred prior to the amendment of the statute and therefore the claimant's entitlement to and the employer's responsibility for compensation are to be measured under the statute in effect at the time of the injury.”). Although the presumption “is stated in terms of its application to legislative changes, [the Oregon Court of Appeals has held] that it has equal applicability to changes in the common law.” Antonnaci, 108 Or.App. at 695 n.1. See also Schlimgen v. May Trucking Co., 335 Or. 143, 152 (2003)(the extension to civil cases of a jury-instruction rule that was previously applied only in criminal cases “makes ‘new' law, and . . . it would not be equitable to apply the rule to this case.”).
Defendant asserts the Court should not apply the holding in Maza retroactively because doing so would create new obligations for Defendant based on actions it took more than eight years before the Maza decision. Specifically, before Maza Oregon courts had not interpreted Oregon Administrative Rule 839-020-0050 to require an employer to pay an employee for a full 30-minute meal period when the employee did not take a full 30-minute meal period and the employer did not require the employee to return early from his meal period. As noted, the court held in Maza that the language of 839-020-0050 “means that a 30-minute meal [period] is mandatory and, if not taken, the employer must pay the employee's wages for the full 30-minutes” regardless of the reason the employee did not take the full meal period. This Court agrees with Defendant that the Maza court's interpretation of Oregon Administrative Rule 839-020-0050 is a substantive change in employers' duties and obligations as to meal periods. The Court, therefore, declines to apply the Maza court's holding retroactively because “doing so [would] . . ., create new obligations or impose additional duties with respect to [Defendant's] past acts.” Tucker, 90 Or.App. at 509. Thus, the Court concludes the individualized inquiry related to Plaintiffs' unpaid break claims exceeds the common class questions, and, therefore, resolution of the unpaid break claims is not amenable to efficient classwide resolution.
Accordingly, the Court denies Plaintiffs' Renewed Motion to Certify Unpaid Break Class.
CONCLUSION
For these reasons, the Court DENIES Renewed Motion (#225) to Certify Unpaid Break Class.
IT IS SO ORDERED.