[00:00:04] Speaker 04: May it please the court? [00:00:06] Speaker 04: My name is David Simes. [00:00:07] Speaker 04: I represent Jack in the Box in this appeal. [00:00:09] Speaker 04: And I am going to reserve 10 minutes of my time for the rebuttal and response to Mr. Egan's side of the case. [00:00:20] Speaker 00: OK, so I'll sort of consider that aspirational, but we'll get through this. [00:00:24] Speaker 04: Indeed. [00:00:25] Speaker 04: Thank you. [00:00:27] Speaker 04: I'm going to start with a, so Jack in the Box was the first to appeal, which is why I'm standing here first. [00:00:34] Speaker 04: And our appeal is primarily, if not exclusively, on the WBF willfulness issue. [00:00:41] Speaker 04: And I would like to start with a brief factual overview of that issue. [00:00:44] Speaker 04: For a statutorily relevant three-year period of time, Jack-in-the-box made what were called WBF, Worker Benefit Fund over deduction. [00:00:53] Speaker 00: So on that issue, you lost at summary judgments, so the jury didn't decide willfulness. [00:00:57] Speaker 04: You're correct, Your Honor. [00:00:58] Speaker 00: And so you're saying there was a tribal issue, essentially, and the jury [00:01:03] Speaker 00: didn't get to hear it. [00:01:04] Speaker 00: That's correct. [00:01:05] Speaker 00: So if you're right on that, then it would have to go back to have the jury decide willfulness, right? [00:01:11] Speaker 04: You're correct, Your Honor. [00:01:11] Speaker 04: Yes, that's our belief. [00:01:14] Speaker 04: And the overdeductions were made in that relevant time period from approximately 2,500 class members. [00:01:22] Speaker 04: deductions were made in fractions of a sense because they were from each paycheck, and it was based on a formula that came out of the overall assessment that the state of oregon made and most of the employees had Less than ten dollars in deductions over there this time frame council. [00:01:40] Speaker 02: Let me serve [00:01:41] Speaker 02: I understand the other side is maybe saying, how can it be that the right hand didn't know what the left hand was doing? [00:01:50] Speaker 02: In other words, there are some folks that knew, and now you're saying, well, no, there's a factual issue, maybe they didn't know, and it shouldn't have been cited as a matter of law. [00:02:06] Speaker 04: That is correct, Your Honor. [00:02:07] Speaker 04: And in fact, nobody knew until Mr. Egan's lawsuit was brought and depositions happened. [00:02:12] Speaker 04: The first time anybody really knew was when Barb Plusek, who was the payroll manager for Jack in the Box, was deposed by Mr. Egan. [00:02:21] Speaker 04: This was in 2012. [00:02:23] Speaker 04: And it was at that point that the knowledge of this over deduction really hit. [00:02:30] Speaker 04: Now, I appreciate your point that, well, wasn't there an earlier time potentially when knowledge existed? [00:02:35] Speaker 04: And my answer is no. [00:02:37] Speaker 04: Really, there was not, for a variety of reasons that are outlined in our brief. [00:02:42] Speaker 04: But basically, that was kind of the point why I wanted to focus on the fractional nature of the over deductions. [00:02:49] Speaker 04: They were so small that nobody, not a single plaintiff, not a single class member, nobody at the company was aware of this until it was revealed in the light of litigation. [00:02:58] Speaker 00: So is there evidence in the record how this Lawsum program worked? [00:03:03] Speaker 00: Specifically, how is it possible that the program continued to deduct the same amount from employees when the rates changed, but decreased the amount paid in by Jack in the Box when the rates changed? [00:03:15] Speaker 00: And how is it possible that Jack in the Box did not know the program was doing this? [00:03:21] Speaker 00: So that kind of talks, that's what the issue is, right? [00:03:23] Speaker 04: It really is the issue. [00:03:24] Speaker 04: I mean, I think your honor is asking all the right questions. [00:03:26] Speaker 00: Thanks. [00:03:27] Speaker 04: Well, I mean, for what it's worth, I'm here to tell you what I think. [00:03:32] Speaker 04: The answer to your first question is no. [00:03:35] Speaker 04: There is no evidence in the record of how Lawson works from a programming standpoint or a calculation standpoint. [00:03:46] Speaker 04: I mean, it just wasn't developed in the record by the parties. [00:03:48] Speaker 02: So it was paying the right amount, but deducting a larger amount. [00:03:53] Speaker 04: So for the first year in question, 2003, it was set to deduct at the right rate of employees. [00:04:00] Speaker 02: So answer my question. [00:04:02] Speaker 04: I'm sorry? [00:04:03] Speaker 02: Answer my question. [00:04:03] Speaker 02: Because as I understood it, they were deducting a larger amount but paying the correct amount. [00:04:11] Speaker 02: Why can't we just say we were imputing that knowledge? [00:04:15] Speaker 04: The company was paying the right amount to the state of Oregon. [00:04:19] Speaker 04: You're correct. [00:04:20] Speaker 04: That's what I refer to as the overall assessment. [00:04:22] Speaker 04: Sure. [00:04:22] Speaker 04: But the deductions, and that entitled, jack of the box, to take one half of that overall amount from employees. [00:04:32] Speaker 04: That's statutory. [00:04:34] Speaker 04: That's the program. [00:04:35] Speaker 04: And because the program, the Lawson program, did not change the calculation from 2003 to 2004, it over-deducted. [00:04:45] Speaker 04: And if you decide that imputation of knowledge is proper, I would beg to differ. [00:04:54] Speaker 04: I don't think that's proper. [00:04:55] Speaker 04: It's not that the law says. [00:04:56] Speaker 04: The law says the standard is willfulness, which is knowing, voluntary, and intentional without inadvertence. [00:05:03] Speaker 04: So I don't think that it's proper to impute knowledge. [00:05:06] Speaker 02: And still, I understand that. [00:05:09] Speaker 02: I guess my question is, how could it be [00:05:15] Speaker 02: that you were paying the correct amount yet deducting a larger amount. [00:05:20] Speaker 02: How could it be that, if not intentional? [00:05:24] Speaker 04: Because nobody knew it was happening. [00:05:25] Speaker 04: And this is not developed in the record, but because nobody at the company took responsibility for the loss in component of things to go make sure that got changed. [00:05:36] Speaker 04: Because maybe the loss in component [00:05:39] Speaker 00: glitched and miscalculated We don't know separately to this to the state Than what the deductions are absolutely your honor so totally different so you get a bill for what's owed to the state and and Jack in the box paid that but you deduct using the Lawson [00:06:04] Speaker 04: From the employee side that's roughly correct. [00:06:05] Speaker 04: I would say we don't get a bill from the state we get a an assessment rate. [00:06:10] Speaker 04: And then we are supposed to go do a calculation we being in this case the tax department of Jack in the box. [00:06:17] Speaker 04: goes and looks at how many employees they had over some period of time, and based on that rate, figures out what is owed to the state, then that total amount is then statutorily, Jackalox is statutorily entitled to take 50% of it. [00:06:33] Speaker 02: But that seems to be sort of willful ignorance. [00:06:35] Speaker 02: You know, just separate your departments aside, not know what's going on on the other side, and therefore we're never gonna really know, oh no, surprise, we were underpaying some folks. [00:06:45] Speaker 02: or over-deducting some folks. [00:06:47] Speaker 02: I mean, it seems, it stands to reason that this, and you may be right, it might be clearly a factual dispute and therefore it goes back, but it just, it seems incredulous at least that you wouldn't know what was going on even though you were paying the correct amount and deducting a larger amount from the employees. [00:07:13] Speaker 04: I don't know how to respond that. [00:07:15] Speaker 04: I totally disagree. [00:07:16] Speaker 04: I do think it is a factual issue, no matter what. [00:07:18] Speaker 00: How much money are we talking about here? [00:07:21] Speaker 04: In terms of the over deductions, there was a total of about $13,500 over a three-year period for approximately 2,500 employees, I think. [00:07:31] Speaker 01: I think that's what really boils down to me. [00:07:35] Speaker 01: You have a company that was basically leaving business in, I think, 2010, and then it got franchised, is that right? [00:07:41] Speaker 01: Yes, Your Honor. [00:07:41] Speaker 01: So basically, it was shutting down. [00:07:43] Speaker 01: Your employee indicated nobody knew. [00:07:47] Speaker 01: You said that was first discovered I think in 2012 I think when Mr. Egan did a deposition. [00:07:55] Speaker 01: You have, he said nobody responded. [00:07:59] Speaker 01: Clear factual distinction, an important distinction unless the imputed issue is the law. [00:08:06] Speaker 01: This is a classic [00:08:08] Speaker 01: misuse of the summary judgment approach from your perspective, right? [00:08:13] Speaker 01: Classic. [00:08:13] Speaker 01: Yes, Your Honor. [00:08:14] Speaker 01: It needs to go back to a jury. [00:08:16] Speaker 01: Classic. [00:08:16] Speaker 01: They'll put on their part. [00:08:17] Speaker 01: You'll put on your part. [00:08:18] Speaker 01: You'll respond to my colleagues' questions. [00:08:21] Speaker 01: But none of that is known now. [00:08:23] Speaker 01: The trial judge appears who just have said, hey, this is it. [00:08:28] Speaker 01: And it's an important point. [00:08:29] Speaker 01: Was it Willful? [00:08:30] Speaker 01: Nobody knows in terms of a trier of fact except the judge who should not be doing it at this point. [00:08:36] Speaker 01: Is that your position? [00:08:37] Speaker 04: That is my position. [00:08:39] Speaker 04: It is Jack of the Box's position. [00:08:40] Speaker 04: Yes. [00:08:41] Speaker 00: And that you might lose at trial. [00:08:43] Speaker 00: We might. [00:08:44] Speaker 00: You just shouldn't have lost at the gate. [00:08:47] Speaker 04: To Judge Mendoza's point, maybe it's a thin case. [00:08:49] Speaker 04: I don't think so. [00:08:50] Speaker 04: But I hear you. [00:08:50] Speaker 04: I see that somebody could think that reasonably. [00:08:54] Speaker 04: So we could lose. [00:08:55] Speaker 04: I think we'll win. [00:08:56] Speaker 04: But yes, that's the whole point. [00:08:58] Speaker 04: A trier of fact has to look at this. [00:09:02] Speaker 00: As to the last final pay damages theory, you assert that Judge Hernandez improperly reconsidered Judge Brown's ruling after the case was reassigned. [00:09:14] Speaker 00: But pursuant to Amaral versus Connell, which is the Ninth Circuit, Kate, rulings made pretrial may be modified even if the case is reassigned to another judge. [00:09:24] Speaker 00: So I guess I'm not seeing your point there. [00:09:30] Speaker 00: I can change my mind. [00:09:32] Speaker 00: And I can change and I can and someone else can change it when they they can say that's not right So you're just saying because someone said it it's over and done Well How do you how did how is this case not governed by Amaral which says you can't do it and [00:09:52] Speaker 04: I'm not remembering the Amaral case, Your Honor, and I do know the general rule that district courts are afforded wide latitude to change prior rulings even of prior district courts. [00:10:04] Speaker 04: The difference in this case is that Judge Hernandez found [00:10:09] Speaker 04: As a matter of fact, the plaintiffs had waived those claims in the summary judgment proceedings before Judge Brown. [00:10:16] Speaker 04: He then went on to say that he thought justice required that he return those claims to the case. [00:10:24] Speaker 04: And the problem is the standard that should have been used in our opinion is manifest injustice. [00:10:30] Speaker 04: That is what the cases we cited say in terms of the ability of a district court to change another district court's opinion. [00:10:42] Speaker 01: Can I ask a question about the prejudgment interest? [00:10:45] Speaker 01: You take the position that Oregon law gives the courts the discretion to reduce prejudgment interest payments, but I don't see any language in the statute that says that. [00:10:56] Speaker 01: I don't see any language from other circuits that say that. [00:10:59] Speaker 01: It seems like what the law says is you've lost the use of your money and we're going to pay you for it. [00:11:06] Speaker 01: What's your best authority for your position that because of, in your opinion, the delays, in quotes, on the part of the other party, that there's an ability to reduce the prejudgment interest, whatever it may be in this case? [00:11:22] Speaker 04: The best authority is extra-jurisdictional. [00:11:24] Speaker 04: It is, in several cases, extra-jurisdictional outside of Oregon. [00:11:28] Speaker 04: In other words, I grieve, Your Honor, in not seeing it in Oregon law. [00:11:32] Speaker 01: Isn't the statute really clear, though? [00:11:35] Speaker 01: It doesn't seem to contain any exceptions. [00:11:38] Speaker 04: Yeah, yes. [00:11:40] Speaker 04: I'll admit that. [00:11:42] Speaker 04: But there's always an exception when fairness really dictates. [00:11:46] Speaker 01: Sounds like a lawyer. [00:11:49] Speaker 04: That's the first I've heard that. [00:11:53] Speaker 04: Your honor's correct about what he's seeing, and we believe, though, that the facts of this case are such that... For example, a lot of the interest is for time spent in the litigation of Jessily 1, what we refer to as Jessily 1, which is the case that got dismissed. [00:12:10] Speaker 04: Why should Jack in the Box, as a matter of fairness or anything else, have to pay interest on that? [00:12:15] Speaker 01: That seems from my perspective, the Pesky old law. [00:12:23] Speaker 01: I don't it if if money is owed this and you don't pay and that pretty time they're entitled the interest basically doesn't have any exceptions for justly one or anything like that. [00:12:36] Speaker 01: Can that a correct reading of the statute? [00:12:40] Speaker 04: I believe it is. [00:12:40] Speaker 01: Okay, can I basically conceding that point then? [00:12:43] Speaker 04: I still think you have discretion. [00:12:45] Speaker 04: I do. [00:12:46] Speaker 01: Why would you have discretion? [00:12:49] Speaker 04: From extra-jurisdictional cases that say, even in clear cases of clear statutes like we're talking about here, when the facts warrant courts [00:13:00] Speaker 01: But the cases you cited with respect deal with different statutes. [00:13:03] Speaker 01: They're worded differently. [00:13:05] Speaker 01: Absolutely. [00:13:05] Speaker 01: And I think you're saying you agree that the Oregon prejudgment interest statute is quite clear. [00:13:11] Speaker 01: There are no exceptions. [00:13:13] Speaker 01: I do agree with that, Your Honor. [00:13:14] Speaker 01: And if that's true, then we don't even get to extra-jurisdictional law, do we? [00:13:21] Speaker 04: I believe you're probably correct. [00:13:22] Speaker 02: Okay. [00:13:23] Speaker 04: Thank you. [00:13:23] Speaker 02: Can I ask a separate question about the shoes and going to your point about the first issue being [00:13:32] Speaker 02: You know seems to be according to your argument. [00:13:35] Speaker 02: There are some factual issues that shouldn't have been decided by the judge then I guess why? [00:13:40] Speaker 02: Why isn't it the same case that it shouldn't have decided the issues with regards to the shoes? [00:13:47] Speaker 02: And whether or not there was a benefit that was given to Jack in the box whether or not the indemnity that was being given to [00:13:58] Speaker 02: something that should have been decided by a jury. [00:14:02] Speaker 02: Shouldn't that have gone to the jury as well? [00:14:05] Speaker 04: I do not believe so, Your Honor, and here's why. [00:14:08] Speaker 04: The WBF question is really a pure question of fact, I believe. [00:14:14] Speaker 00: But the thing is, the question is whether the SHUM requirement benefited the plaintiffs seems like a disputed question right for jury consideration because [00:14:24] Speaker 00: You could make an argument that the plaintiffs overpaid for their shoes so that Jack in the box could collect a rebate and indemnities, not for the benefit of the employee, because you got that $2 issue. [00:14:39] Speaker 00: So what's good for the goose is good for the gander here. [00:14:44] Speaker 04: I generally agree with that principle, but not here. [00:14:45] Speaker 04: Yes. [00:14:47] Speaker 04: Well, no, I do. [00:14:48] Speaker 04: And I mean, I'm being as honest as I can. [00:14:50] Speaker 00: You were the goose before, and now you're the gander. [00:14:52] Speaker 00: But it's like, yeah. [00:14:54] Speaker 00: Why? [00:14:54] Speaker 04: Because the statute that we're talking about now on the shoes talks about for the employees benefit. [00:15:00] Speaker 04: There was undisputed evidence in the record that the employees benefited. [00:15:03] Speaker 04: They got to keep the shoes. [00:15:05] Speaker 04: They got to wear the shoes outside of work. [00:15:07] Speaker 02: I went back and I looked at the shoes here. [00:15:10] Speaker 02: And with all due respect to the shoemaker, I mean, people were going to go out there and wear these shoes out. [00:15:16] Speaker 02: I mean, because that's the argument that they were using these shoes for their own benefit. [00:15:21] Speaker 02: Again, I saw the shoes and are you telling me that folks were going to run out and get these shoes so they could wear them out? [00:15:30] Speaker 02: I mean, what's your argument? [00:15:31] Speaker 04: Anything like that, your honor? [00:15:32] Speaker 04: No, I don't believe that's the case. [00:15:34] Speaker 04: There was disputed evidence from the plaintiffs themselves as to whether they liked the shoes. [00:15:39] Speaker 00: But the reason the employer, there's an argument, the reason the employers picked the ones that cost more is they get $2 back and there was [00:15:50] Speaker 00: they get indemnified because there's evidence in the record, my understanding, is that these people were slipping and falling at a 25% higher rate than other people were slipping and falling. [00:16:01] Speaker 00: And if your people slip and fall, it costs you money, right? [00:16:06] Speaker 00: You had lawsuits for that. [00:16:08] Speaker 00: So if this other, for the $2, you get the rebate and you also get whatever the shoes were called, [00:16:16] Speaker 00: that they'll indemnify for people that slip and fall in them. [00:16:25] Speaker 00: But you're appealing that [00:16:34] Speaker 00: But you're arguing that the court should exclude class members. [00:16:39] Speaker 00: Well, I'm sorry. [00:16:40] Speaker 00: No. [00:16:40] Speaker 00: But they're not appealing that. [00:16:43] Speaker 00: But you're saying that it's for the reasonable benefit of the employees, that there's no disputed fact on that. [00:16:51] Speaker 04: I'm saying that there was undisputed evidence that there was benefit to the employee. [00:16:55] Speaker 00: Well, yes. [00:16:56] Speaker 00: But that doesn't mean that there wasn't benefit to the employer. [00:16:59] Speaker 04: There might have been, but the statute allows that. [00:17:02] Speaker 04: And the reason we know that is because it's not for the exclusive or the sole benefit of the employee. [00:17:07] Speaker 04: And the reason we know that's why you don't interpret this section of the statute that way is because a section, two sections down, when it talks about employers who give loans to employees, [00:17:19] Speaker 04: It says the employers can deduct from loans, from paychecks for loans given to employees, but only if the loan was for the sole benefit of the employee. [00:17:29] Speaker 02: So that I understand your argument. [00:17:30] Speaker 02: What you're saying is that there was some benefit to the employee. [00:17:32] Speaker 02: And because there were some benefits to the employee in the use of this shoe, therefore it could have been decided as a matter of law, is what you're saying. [00:17:39] Speaker 04: I'm saying because there's some benefit to the employee. [00:17:41] Speaker 04: But the fact that there was some benefit to the employer is not a relevant inquiry. [00:17:45] Speaker 04: The question is whether there is some benefit to the employee. [00:17:47] Speaker 00: I think we know your argument, but you're eating your rebuttal time. [00:17:51] Speaker 00: I see that, Your Honor. [00:17:52] Speaker 04: I'm very worried about that, because I've almost used all the time. [00:17:55] Speaker 00: OK. [00:17:55] Speaker 00: Well, we'll make proper adjustments. [00:17:59] Speaker 00: Thank you, Your Honors. [00:18:00] Speaker 00: Let's hear from the other side. [00:18:09] Speaker 00: Good morning. [00:18:10] Speaker 03: Good morning, Your Honour. [00:18:12] Speaker 03: My name is John Egan. [00:18:13] Speaker 03: I represent the plaintiffs. [00:18:15] Speaker 03: May it please the court? [00:18:18] Speaker 03: I'll address a couple of things from Mr. Symes before I start in with plaintiff's assignments of error. [00:18:24] Speaker 03: On the shoes, the trial court did find that as long as it gives some benefit to the employee, it doesn't matter if it also benefits the employer. [00:18:35] Speaker 03: But if you look at the legislative history of this deduction section, and this is, we put that in that legislative history at SCR 273 to 279. [00:18:44] Speaker 03: The Bowley administrator who proposed this bill testified that it reflects the legislative intent that whatever the deduction is, it does not go to the benefit of the employer, but to the benefit of the employee. [00:18:59] Speaker 00: Okay, I don't really care about legislative history until you show me the text is ambiguous and then I'll peek under the covers. [00:19:06] Speaker 03: Well, I think that's the rule for interpreting federal law. [00:19:10] Speaker 01: Unless you're talking to Justice Scalia. [00:19:13] Speaker 03: Well, but in Oregon, under State v. Gaines, the actual rubric for analyzing Oregon statutes is that you do include legislative history before, whether or not there's relevant legislative history before having to find that there is ambiguity. [00:19:31] Speaker 03: So I'll just point out that one thing. [00:19:33] Speaker 03: Okay, thanks. [00:19:33] Speaker 03: Sure. [00:19:34] Speaker 03: And then for the Workers Benefit Fund, you know, we pointed out the case of the willful computer from the bankruptcy appellate panel. [00:19:42] Speaker 03: Oregon Supreme Court law says that penalties aren't meant to protect employees from careless employers as well. [00:19:55] Speaker 03: So there's a layer, there has to be a level of knowledge that's below intentional. [00:20:05] Speaker 02: Counsel I you know I understand your argument, but they don't they raise a good point I mean it really does come down to this factual dispute and for the judge to have decided it as a matter of law That may not be correct. [00:20:20] Speaker 03: I mean I understand what you're saying I don't think that any reasonable jury can look at the fact that they knew what the correct rate was any reasonable jury yeah, I [00:20:29] Speaker 01: So that's a remarkable statement. [00:20:32] Speaker 01: I mean, you have a tiny, tiny, tiny amount of money for lots and lots and lots of people. [00:20:38] Speaker 01: You have an employee who says, hey, we didn't know about this. [00:20:42] Speaker 01: My colleagues are brought up the point, how could this be? [00:20:44] Speaker 01: It's a machine. [00:20:44] Speaker 01: It's a program. [00:20:46] Speaker 01: Why didn't you get it right? [00:20:46] Speaker 01: But it's all factual. [00:20:48] Speaker 01: And you're talking about a penal statute, a penal statute. [00:20:53] Speaker 01: I'm surprised that you are pushing back on this idea that a jury ought to decide this unless they're going to give the right to the judge to be the trier of fact. [00:21:05] Speaker 01: This is an important issue. [00:21:07] Speaker 01: It's a very important issue. [00:21:08] Speaker 01: But there are so many things that seems to me at least some juror, some reasonable person could disagree with you. [00:21:15] Speaker 01: Doesn't that argue that at least in this point, this needs to go back? [00:21:20] Speaker 01: for a trial before a jury on this point. [00:21:22] Speaker 01: Not the rest of it. [00:21:23] Speaker 01: There are lots of other things, but this one. [00:21:25] Speaker 03: I understand the point that all of your honors have made on that. [00:21:29] Speaker 03: I understand how a judge could look at it both ways. [00:21:32] Speaker 01: But willfulness under Oregon... [00:21:36] Speaker 01: Not the same? [00:21:37] Speaker 03: I think that when presented with the proper legal definition of willfulness under Oregon law, no reasonable juror could find that this was not willful. [00:21:44] Speaker 01: But with respect, counsel, you're a good lawyer. [00:21:47] Speaker 01: You're going to make your arguments and you're going to say, oh, this, this, this, this, this. [00:21:51] Speaker 01: He's going to make his arguments and say the opposite. [00:21:54] Speaker 01: And then the jury will decide. [00:21:55] Speaker 01: You may be persuasive. [00:21:57] Speaker 01: You may win. [00:21:58] Speaker 01: But it's up to them to decide, not the trial judge, is it not? [00:22:03] Speaker 03: I mean, I disagree with the result. [00:22:07] Speaker 03: I agree with you that that's the process that the judge goes through in deciding a motion for summary judgment. [00:22:13] Speaker 00: Let's say we go back in conference, which we haven't conferenced yet. [00:22:16] Speaker 00: We go back. [00:22:17] Speaker 00: And just hypothetically, let's say that Judge Callahan doesn't think that the Willfulness Standards met. [00:22:25] Speaker 00: Judge Mendoza thinks it has. [00:22:28] Speaker 00: Judge Smith thinks it has. [00:22:30] Speaker 00: But I'm reasonable. [00:22:32] Speaker 00: Doesn't that tell you right there? [00:22:34] Speaker 00: It's sort of like when I just sent on a case and my colleagues say, well, no reasonable person could think that. [00:22:46] Speaker 00: So if we don't agree on it, that's almost like we're the reasonable jurors there. [00:22:50] Speaker 00: Now, I don't know how we feel about it. [00:22:52] Speaker 00: We haven't discussed it. [00:22:53] Speaker 03: Absolutely. [00:22:54] Speaker 03: And if when you go in conference, you decide to send it back to the trial court, we will happily retry the case. [00:22:59] Speaker 01: And you would do an excellent job. [00:23:01] Speaker 03: Oh, thank you very much, Your Honor. [00:23:02] Speaker 03: I appreciate that. [00:23:05] Speaker 03: So those were the things I wanted to address with the things that Mr. Symes said. [00:23:10] Speaker 03: On plaintiff's first cross-assignment of error, that's the denial of certification on the unpaid meal breaks class. [00:23:19] Speaker 03: The meal periods went through several rounds of briefing in the trial court. [00:23:24] Speaker 03: the trial court denied certification each time based on a different reason and so each time when that particular reason that was given was reversed by either by the Oregon Court of Appeals or the Ninth Circuit. [00:23:36] Speaker 02: I guess what I understood the district court judge to ultimately conclude is that the folks from prior to 2010, they were paid. [00:23:44] Speaker 02: So then what's left? [00:23:46] Speaker 02: Weren't they paid by the employer? [00:23:48] Speaker 02: No. [00:23:48] Speaker 02: According to what the law was at the time? [00:23:50] Speaker 03: No, no. [00:23:52] Speaker 03: The judge concluded that prior to 2010, there was no requirement in the rule that employees receive pay for shortened meal periods. [00:24:02] Speaker 03: We're alleging that that was an erroneous legal conclusion, that that's not what the law said prior to 2010. [00:24:07] Speaker 01: I mean, in 2010... But with having said that, aren't you agreeing that at least according to what people understood at the time, that the employer did that? [00:24:20] Speaker 01: In other words, the law was such that they didn't have to do other than what they did at that time. [00:24:25] Speaker 03: No, no they did. [00:24:27] Speaker 03: So here's what happened in 2010. [00:24:28] Speaker 00: I thought you were arguing that the change was retroactive and then that's. [00:24:32] Speaker 03: Well, so there wasn't, so Maza interpreted certain language in that administrative rule, that interpretation is retroactive under Oregon law. [00:24:43] Speaker 03: So the words, me, always meant what Maza said they meant. [00:24:47] Speaker 03: That was the second denial of class certification. [00:24:50] Speaker 03: Then the Ninth Circuit said no, Oregon applies [00:24:54] Speaker 03: legislative gloss on statutory language retroactively. [00:24:59] Speaker 02: I want to come back to this point because I want to make sure that I'm understanding. [00:25:03] Speaker 02: You're saying that they did not get paid according to what the law was prior to 2010. [00:25:09] Speaker 02: Absolutely. [00:25:09] Speaker 02: Point me to that in the record. [00:25:11] Speaker 02: At some point today, I need you to point that to me because I'm not sure that's accurate. [00:25:16] Speaker 03: Well, so what we argued was prior to 2010, the language was the same. [00:25:22] Speaker 03: The cell provide language that Mazza interpreted. [00:25:24] Speaker 03: I mean, the trial court said Mazza was interpreting the post 2010 version of the rule, but the language that they interpreted was the same both before and after that change. [00:25:35] Speaker 01: But if the statute changed, but the requirement was the same, was it a superfluous change? [00:25:42] Speaker 03: Well, no, when Boley put that change in, both their administrative report in the Oregon reports and the declaration by the Boley Wage and Hour Administrator that are in the record, both said, we're doing this to clarify that this must be paid. [00:26:02] Speaker 01: The other two- But nobody understood it before that time, right? [00:26:06] Speaker 03: Well, we think they did. [00:26:08] Speaker 01: I mean, there's a couple of- Why the clarification? [00:26:10] Speaker 03: Because apparently there were some people who didn't understand. [00:26:12] Speaker 03: There was a split in authority before that. [00:26:15] Speaker 01: OK, so at least it wasn't willful, right? [00:26:18] Speaker 01: Because they didn't know what the law was. [00:26:20] Speaker 01: It was confusing. [00:26:22] Speaker 03: I don't think that's what the standard for willfulness is in Oregon law. [00:26:25] Speaker 01: It's a criminal statute. [00:26:27] Speaker 03: Well, no, this isn't a criminal statute. [00:26:30] Speaker 03: They're called penalty wages, but it's mainly to deter and get to allow employees to be paid quickly and to deter other people from not paying quickly. [00:26:39] Speaker 01: But with respect, you're the Oregon lawyer, but I thought that Oregon law was quite clear that when wages are owed and they're intentionally not paid, that's a criminal offense. [00:26:52] Speaker 01: Is that wrong? [00:26:53] Speaker 03: It is, but this is a civil case. [00:26:56] Speaker 01: I understand that, but it's treated for purposes of enforcing the law as if it were a criminal statute, right? [00:27:03] Speaker 03: No, because the willfulness standard, there's a different standard for willfulness and intentional on the criminal side. [00:27:10] Speaker 03: In Oregon, willfulness just means a reasonable lack of knowledge of the historical facts. [00:27:16] Speaker 03: So when cases in Oregon have found that things were not willful, it's been when like people sneak back into work and do a bunch of overtime that the employer doesn't even know about. [00:27:25] Speaker 03: They don't know the historical facts that create the liability. [00:27:29] Speaker 03: If they know the historical facts, but they think that they can offset some other debt that the employee owes, or they think that they have an affirmative defense, they don't pay it. [00:27:39] Speaker 03: If they're wrong on the law, but they know all the facts that end up creating the liability to pay wages, that's willful under Oregon law. [00:27:47] Speaker 03: It's a very kind of niche definition of willfulness that's developed over time specifically for reaching out a law. [00:27:54] Speaker 01: And I respect that, but what I'm thinking is, [00:27:56] Speaker 01: If you're the employer, it's your law firm, and you don't know what it is, but you're hoisted on your own petard if you choose the wrong box, right? [00:28:08] Speaker 01: And it's a big penalty. [00:28:10] Speaker 01: Is that what Oregon law requires? [00:28:12] Speaker 03: Yeah. [00:28:12] Speaker 03: I mean, that's what the penalty wages are. [00:28:15] Speaker 03: Because there's specific Oregon administrative rules that say that you're presumed to know the requirements of the law. [00:28:23] Speaker 03: You can't hide behind, well, I thought that- Everyone does. [00:28:26] Speaker 03: Sorry? [00:28:27] Speaker 01: Everyone does know. [00:28:28] Speaker 03: Oh, of course. [00:28:29] Speaker 03: We all know that. [00:28:32] Speaker 03: So that's what we say about the meal periods. [00:28:34] Speaker 03: The law was the same before and after that change. [00:28:38] Speaker 03: Boley said, we're going to clarify that you have to pay for these short meal periods. [00:28:44] Speaker 03: And the other two changes that they made at the same time, they said, we're making this change to conform to federal law. [00:28:51] Speaker 03: So that difference between clarify and conform. [00:28:54] Speaker 00: Are you making a retroactive argument or not? [00:28:57] Speaker 03: The applicable language existed both before and after the 2010 change. [00:29:03] Speaker 03: MASA's interpretation of that language is applied retroactive. [00:29:07] Speaker 00: Well, in your reply brief, you assert the rule that the employers must pay for short meal breaks could apply retroactively. [00:29:14] Speaker 00: But I did not see that argument raised below or even in your opening brief. [00:29:18] Speaker 00: So isn't that retroactive argument forfeited? [00:29:21] Speaker 03: No, no. [00:29:22] Speaker 03: In both of the times that it came up, when we specifically moved to reconsider the trial court's denial of certification, because the trial court had denied certification by saying, I'm not applying MASA retroactively. [00:29:36] Speaker 03: And we moved to reconsider saying, well, the Ninth Circuit in this footnote has said that helper in the pits requires you to apply cases retroactively. [00:29:44] Speaker 00: So did you ever argue in the district court that Jack in the Box breached the on-duty meal policy agreement? [00:29:51] Speaker 00: And if so, where on the record can I find those arguments? [00:29:54] Speaker 03: Yes, we did in the complaint. [00:29:56] Speaker 03: We did it in the pre-trial memo. [00:29:59] Speaker 00: Well, my reading of the record indicates that the unpaid break claims were pleaded and tried as a regulatory violation. [00:30:07] Speaker 00: Where in the record did you clearly articulate a breach of contract theory? [00:30:12] Speaker 03: Yeah, that's the difference. [00:30:13] Speaker 03: Because in Oregon, you don't have to plead breach of contract to bring a wage claim. [00:30:19] Speaker 03: All wages that are due are as a result of the employment contract. [00:30:24] Speaker 03: for the unpaid wage statute. [00:30:26] Speaker 03: There's another set of statutes for minimum wage and overtime where the statute provides the minimum or the statute says how much you have to be paid. [00:30:33] Speaker 03: But Erickson versus American Golf Corporation says unpaid wages for a wage claim are the wages that are due under the contract. [00:30:41] Speaker 03: So for unpaid wages, if a contract says you're owed this amount, then you're owed it for the wage statutes. [00:30:47] Speaker 03: And I should say on the minimum wage side, both the Buero case, Buero versus Amazon, that this circuit referred to the Oregon Supreme Court and they answered the question, and Oregon Administrative Rule OAR [00:31:00] Speaker 03: 839-020-0043 sub 3 says that even something that wouldn't otherwise be hours worked for the purposes of minimum wage and overtime becomes hours worked if the parties agree that it is hours worked. [00:31:17] Speaker 03: And that's the same rule under the federal, Code of Federal Regulations. [00:31:21] Speaker 03: So that's where the on-duty meal period agreements come in because even if Jack in the Box says the statute didn't require us to pay for that at the time, when they tell all their employees and require them to sign it when they come in, if we make you come back early from a meal period, we're going to pay you, that then becomes hours work for purposes of the hours work statutes. [00:31:47] Speaker 03: So that's the meal period portion. [00:31:49] Speaker 03: On the shoes, I think there's a couple of different statutory problems with the trial court's decertification. [00:31:57] Speaker 03: First is we've argued about whether they're for the employee's benefit. [00:32:01] Speaker 03: We're not gonna argue about whether something was authorized in writing. [00:32:06] Speaker 03: The jury found that the plaintiffs did authorize these deductions in writing. [00:32:11] Speaker 03: This defense now solely [00:32:14] Speaker 03: turns on whether they were for the employee's benefit. [00:32:17] Speaker 03: So we've talked about that. [00:32:18] Speaker 03: But the trial court also then said, well, if it's authorized in writing, then it can't be a minimum wage or overtime violation. [00:32:27] Speaker 03: And that's wrong. [00:32:29] Speaker 03: This minimum wage and overtime statutes have lots of other requirements that you have to meet, even if something is authorized in writing. [00:32:37] Speaker 03: Uniforms can't be deducted from the minimum wage, regardless of whether they're authorized in writing. [00:32:42] Speaker 03: You can't charge more than the cost to the employer, which was done here. [00:32:45] Speaker 03: That's unequivocal. [00:32:49] Speaker 03: You have to make the full deduction in one payday. [00:32:52] Speaker 03: These were made over three or four paydays. [00:32:54] Speaker 03: And it has to be voluntary and uncoerced, which does not apply to regular wage deductions. [00:32:59] Speaker 03: So employers and employees can make lots of deductions from wages that are legal under the wage deduction statute. [00:33:06] Speaker 03: So high earners. [00:33:07] Speaker 03: You know, if they have a deduction that you authorize, that's a fine. [00:33:13] Speaker 03: But minimum wage employees, you can't make the deduction unless it meets all these requirements. [00:33:18] Speaker 03: Judge Brown initially said, well, obviously, this doesn't meet those requirements. [00:33:24] Speaker 03: Judge Hernandez didn't really explain why he said that authorized in writing for the wage statute automatically means that it qualifies under the minimum wage and overtime. [00:33:34] Speaker 03: And that applies to both the [00:33:36] Speaker 03: and the motion to correct the jury verdict that Jack in the Box filed after the case. [00:33:43] Speaker 03: I'd like to reserve the remainder of my time if that's all right. [00:33:46] Speaker 00: Okay. [00:33:46] Speaker 03: Thank you. [00:33:53] Speaker 04: Thank you, Your Honor. [00:33:54] Speaker 04: This is a lot harder than I thought it was going to be. [00:33:57] Speaker 00: Well, that's OK. [00:33:59] Speaker 00: I'm going to give you a couple extra minutes, and I'll give him a couple extra minutes. [00:34:03] Speaker 00: So that gives you a little, four minutes. [00:34:07] Speaker 00: Thank you. [00:34:08] Speaker 04: I'm going to go to meal breaks first then. [00:34:09] Speaker 04: Mr. Egan said the language, this is the same. [00:34:14] Speaker 04: between 2010 when the regulation changed and prior. [00:34:18] Speaker 04: That is unequivocally false. [00:34:21] Speaker 04: In the record at docket 36.1 pages 86 and 90 are the regulations that we're talking about. [00:34:31] Speaker 04: The page 86 is the 2009 regulation and in that regulation is 050 sub 2 sub B. [00:34:42] Speaker 02: Council, what's the ER number? [00:34:45] Speaker 02: What's the ER number? [00:34:47] Speaker 02: Do we have that? [00:34:50] Speaker 02: A12. [00:34:51] Speaker 02: Thank you. [00:34:52] Speaker 04: A12 and A16. [00:34:55] Speaker 04: And A16, so the language is totally different. [00:34:59] Speaker 04: In 2010, the following provision was added. [00:35:02] Speaker 04: except as otherwise provided in the rule, if an employee is not relieved of all duties for 30 continuous minutes during the meal period, the employer must pay the employee for the entire 30-minute period. [00:35:13] Speaker 04: Prior to 2010, that was never in the law. [00:35:16] Speaker 04: And to some of the judge's questions, it was never decided to be in the law. [00:35:20] Speaker 04: In fact, the Oregon Supreme Court case of Gaffuris, there's not even a private right of action for a failure to provide a meal break. [00:35:28] Speaker 04: Now, if you bring somebody back and make them work prior to any meal break and don't pay them for that, well, that's a problem, but that didn't happen in this case. [00:35:38] Speaker 00: The plain assault has tried to... Did your friend on the other side argue retroactivity? [00:35:43] Speaker 04: That is not clear, Your Honor. [00:35:44] Speaker 04: We had that same question. [00:35:45] Speaker 04: I think he did previously. [00:35:47] Speaker 04: It's not clear to me that he preserved it for appeal. [00:35:50] Speaker 04: But look, it doesn't matter, because Maza's retroactivity is irrelevant. [00:35:55] Speaker 04: Here's why. [00:35:56] Speaker 04: Maza decided the question, those same regulations, if you look at sub 2a, every employer shall provide [00:36:05] Speaker 04: to each employee a meal period shall provide. [00:36:08] Speaker 04: That's the language Mazza interpreted. [00:36:11] Speaker 04: And it interpreted whether, essentially, whether employers have an obligation to police their workforce and make sure that an employee gets a meal break or whether just the opportunity is enough. [00:36:23] Speaker 04: shall provide was determined to be essentially the employer must go do it, give the 30 minutes. [00:36:30] Speaker 04: The whole question that we're talking about here is under subsection B, a totally separate subsection, and that was brand new to the law in 2010, didn't apply in any of this case, so it doesn't matter. [00:36:43] Speaker 04: And so he's just wrong. [00:36:48] Speaker 04: There's no easy way to say it. [00:36:51] Speaker 00: OK, you have a minute and a half of what I'm giving you extra, so you might want to use that wisely. [00:36:57] Speaker 04: I wanted to go back to willfulness, because Mr. Egan said that the willful standard, I wrote down a quote. [00:37:05] Speaker 04: He said, it's a reasonable lack of knowledge on historical facts, end quote. [00:37:11] Speaker 04: That's what he said the standard was. [00:37:12] Speaker 04: I have never seen that articulated in any of the cases. [00:37:15] Speaker 04: I cannot represent that there's not a case somewhere in DICTA makes a point like that. [00:37:19] Speaker 04: But the standard is almost always. [00:37:22] Speaker 00: What does the jury instruction look like? [00:37:26] Speaker 04: Well, we didn't have one. [00:37:27] Speaker 00: We didn't have it here. [00:37:28] Speaker 00: But you have standard jury instructions, right? [00:37:31] Speaker 04: You're correct. [00:37:32] Speaker 04: I do not know if there's one on this one off the top of my head. [00:37:37] Speaker 04: But the cases are all. [00:37:41] Speaker 04: very consistent. [00:37:42] Speaker 04: Now, they go all over the map in some ways on the actual application of the standard. [00:37:48] Speaker 04: But it merely indicates that the act of remission, Wilfairness merely indicates that the act of remission was purposeful and not the product of inadvertence. [00:37:59] Speaker 04: In another case, 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. [00:38:06] Speaker 04: I have never seen a standard articulated like Mr. Egan just argued to this court. [00:38:10] Speaker 04: Again, maybe there's some language like that in one case somewhere, but I'm not aware of it, and it certainly wasn't analyzed here. [00:38:17] Speaker 00: Do my colleagues have it? [00:38:19] Speaker 00: We don't have any additional questions. [00:38:20] Speaker 00: Thank you, Your Honor. [00:38:21] Speaker 00: I'll give you two minutes extra. [00:38:22] Speaker 00: You're done. [00:38:23] Speaker 00: Thank you. [00:38:25] Speaker 00: Okay, I'm going to add two minutes to yours, or when the light goes on, you can go up two minutes over time. [00:38:32] Speaker 03: Thank you, Your Honor. [00:38:33] Speaker 03: I wanted to point out that the meal language that Mr. Symes, my friend, pointed out [00:38:40] Speaker 03: That, the language that Gaffer interpreted, before 2010 it said the employer shall provide a meal period that's 30, and an appropriate meal period is 30 minutes long, or it's a time to eat that's not deducted from the employee's hours worked. [00:39:01] Speaker 03: So you either have to give them 30 minutes or you can't deduct it from their hours work. [00:39:04] Speaker 03: That was pre-2010. [00:39:05] Speaker 03: After 2010, it just changed the formulation. [00:39:09] Speaker 03: It says, if you don't get 30 minutes, you have to pay them. [00:39:12] Speaker 03: But that's the same. [00:39:13] Speaker 03: Not deducting it from your hours worked is the same as saying you have to pay them. [00:39:17] Speaker 03: That's the clarification that Boley put in because there were cases that had gone either way. [00:39:23] Speaker 03: And the case that specifically interpreted it this way was in 2007. [00:39:27] Speaker 03: It's a California case, but it was out there saying it's a reasonable inference that when an employer has deducted pay for meal and rest periods, the employee is entitled to recover those wages because the rule expressly prohibits such deductions. [00:39:44] Speaker 03: That's REN versus RGIS. [00:39:48] Speaker 00: Well, is there a difference that before in 2010 [00:39:53] Speaker 00: they would just get paid for the part that they got called back in. [00:39:58] Speaker 00: Say, like, you go out for your break, and then suddenly the store, everything breaks loose. [00:40:05] Speaker 00: And they say, you don't get the rest of your break. [00:40:08] Speaker 00: We need you back on the floor. [00:40:09] Speaker 00: Now, my understanding is that then it would come down to, you'd subtract the minutes that they lost. [00:40:16] Speaker 00: Then after, if they don't get the full thing, then you just [00:40:20] Speaker 00: They're paid for the whole 30, not just a part of the 30. [00:40:25] Speaker 00: Am I wrong? [00:40:27] Speaker 03: Well, I mean, some trial court opinions did interpret it the way you're saying. [00:40:32] Speaker 03: But it says if you don't get the full 30 minutes, then it can't be deducted from your hours worked. [00:40:38] Speaker 03: And that, by the way, under the Buero case, Buero versus Amazon, Oregon says that [00:40:43] Speaker 03: or the Oregon Supreme Court said that Oregon has adopted the federal standards on these hours worked, and that's the same rule under the FLSA. [00:40:50] Speaker 03: If you don't get 30 minutes, you're supposed to be paid for your lunch. [00:40:53] Speaker 03: Now, the Gaffer case that my friend referred to, that said that if you work eight hours and get paid for eight hours, you don't get extra time because you didn't get a meal period, you know. [00:41:03] Speaker 03: That's not the case that we have here where they worked for seven hours and 35 minutes, and they got paid for seven hours and 35 minutes, but they were supposed to get paid for eight hours. [00:41:13] Speaker 03: That's the difference. [00:41:15] Speaker 03: And then the last thing I'll note, under willfulness, I think the case that my friend was looking for... Do you know what the jury instruction looks like on willfulness? [00:41:24] Speaker 03: No, I don't. [00:41:25] Speaker 00: Okay, but that's what, if it had gone to the jury, that's what the judge would have instructed the jury, right? [00:41:31] Speaker 03: Probably. [00:41:31] Speaker 03: I mean, Wilson versus Smurfit is the 2004 Oregon Court of Appeals case. [00:41:35] Speaker 00: I was a trial judge, so I know how to do jury instructions. [00:41:38] Speaker 00: Exactly. [00:41:38] Speaker 00: So, and we get together on that. [00:41:40] Speaker 03: It says, an employer willfully fails to pay wages owed at termination when it knows or reasonably should know all of the facts that trigger the obligation to pay. [00:41:49] Speaker 03: A reasonable lack of knowledge of those historical facts immunizes the employer from penalties. [00:41:55] Speaker 03: So that's the case that my friend was trying to remember. [00:41:58] Speaker 03: A reasonable lack of knowledge of historical facts is what makes it not willful. [00:42:02] Speaker 03: If you know all the facts, then they assume you know the law. [00:42:06] Speaker 00: I just, that doesn't sound like a jury instruction. [00:42:09] Speaker 03: It's not. [00:42:10] Speaker 00: It's from the kids. [00:42:11] Speaker 00: I know, but I'm just saying, because we're arguing whether the issue of willfulness should have gone to the jury, that would be the law that the [00:42:19] Speaker 00: that the judge would give to the jurors to decide that. [00:42:22] Speaker 00: I've never seen a jury instruct in this as a reasonable knowledge of the historic. [00:42:27] Speaker 00: I mean, that would blow me away. [00:42:28] Speaker 00: I don't understand that. [00:42:31] Speaker 03: Well, oftentimes, in my experience, we usually end up using language drawn explicitly from cases because that's the only thing that the parties can agree on in terms of dumbing it down in language that might help one side or the other. [00:42:45] Speaker 03: OK. [00:42:47] Speaker 03: If the court has no further questions. [00:42:49] Speaker 00: We don't. [00:42:50] Speaker 00: Thank you both for your helpful arguments in this. [00:42:53] Speaker 00: All right. [00:42:54] Speaker 00: Thank you. [00:42:55] Speaker 00: This matter stands submitted.