The panel reversed in part and affirmed in part the district court’s judgment in a wage-and-hour case brought by plaintiffs against their former employer, Jack in the Box (JITB), on behalf of themselves and a class of other former employees.

Plaintiffs challenged three JITB policies: JITB overdeducted its employees’ wages for the Oregon Workers’ Benefit Fund (WBF), JITB did not pay workers for interrupted meal periods more than 20 minutes long, and JITB deducted employees’ pay for non-slip shoes.

Plaintiffs prevailed on the WBF claims, and JITB defeated the unpaid break and shoe claims. JITB appealed, and plaintiffs cross-appealed. The panel reversed the district court’s judgment on the WBF and shoe claims, and remanded, and affirmed the district court’s judgment on the unpaid break claims.

Addressing JITB’s appeal concerning the WBF overdeductions, the panel held that the district court erred in finding, at summary judgment, that JITB’s overdeductions were willful such that JITB owed penalty wages, and remanded for a trial on willfulness. To help the district court and the parties retry the case, the panel also provided guidance on a penalty wage theory the parties call “Late Final Pay 1”—a claim for penalty wages for WBF overdeductions but not minimum wage or overtime violations—and the constitutional limits on penalty wages.

Next, the panel held that the district court did not abuse its discretion in declining to exclude the class members whose mailed notices were undeliverable, nor did the district court err in refusing to reduce the prejudgment interest for plaintiffs’ alleged delays. However, on remand, the district court will have to recalculate the prejudgment interest in light of the holding on willfulness.

Addressing plaintiffs’ cross-appeal, the panel held that it had jurisdiction. Because the district court granted JITB’s Fed. R. Civ. P. 50(b) motion, the 30-day deadline of Fed. R. App. P. 4(a)(1)(A) ran from the amended judgment, and the cross-appeal was timely.

The panel rejected plaintiffs’ challenges to how the district court’s rulings on their unpaid break claims. First, the district court did not abuse its discretion in refusing to certify the unpaid break class. Second, the district court did not err in granting JITB’s renewed motion for judgment as a matter of law on the named plaintiffs’ individual claims because plaintiffs waived the theory that they could prevail individually by proving JITB breached its On-Duty Meal Policy Agreements with plaintiffs.

The panel reversed the district court’s judgment on the shoe claims. The panel held that the district court erred in granting partial summary judgment to JITB on its affirmative defense that the shoe deductions were for its employees’ benefit, and reversed and remanded so a jury can decide whether the shoe requirement was for the employees’ benefit. The panel also remanded so the district court can reconsider whether to certify the shoe class.

https://cdn.ca9.uscourts.gov/datastore/opinions/2025/11/25/23-2522.pdf