Ninth Circuit Reverses Denial of Class Certification for Unpaid Meal Breaks, Holding Oregon Regulation Applies Retroactively

Plaintiffs Jessica Gessele and four other former employees sued Jack in the Box for three alleged wage violations: overdeductions for the Workers’ Benefit Fund, failure to pay for interrupted meal periods longer than 20 minutes, and deductions for non-slip shoes. The Ninth Circuit reversed the district court’s judgment on all three claims and remanded the case.

The central issue for the cross-appeal was whether Jack in the Box owed wages for meal breaks cut short by management before the Oregon Bureau of Labor and Industries clarified the rule in June 2010. The district court had refused to certify a class for these claims, reasoning that liability depended on individualized inquiries into why each break was shortened.

The Ninth Circuit held that the district court abused its discretion. Relying on the Oregon Court of Appeals’ decision in Maza v. Waterford Operations, LLC, the panel determined that Oregon employers must enforce 30-minute meal breaks regardless of the reason for their shortening. The court rejected Jack in the Box’s argument that Maza applied only prospectively, noting that judicial interpretation of regulations applies retrospectively.

Although Maza relied on regulatory text added in June 2010, the Ninth Circuit concluded that the obligation to pay for shortened breaks existed before that date. The panel cited Athena v. Pelican Brewing Co. and the Oregon Bureau of Labor and Industries’ characterization of the 2010 amendment as a clarification of existing law to support the finding that employers must pay for the full 30 minutes of shortened meal periods pursuant to OAR § 839-020-0050 before June 2010.

Consequently, the Ninth Circuit reversed the denial of class certification for the unpaid break claims and remanded for further proceedings. The court also reversed the district court’s grant of judgment as a matter of law on the named plaintiffs’ individual unpaid break claims for the same reason.

On the Workers’ Benefit Fund claims, the panel reversed the district court’s summary judgment finding that Jack in the Box’s overdeductions were willful, remanding for a trial on that issue. The court also addressed the shoe deduction claims, reversing summary judgment for the defendant and remanding for a jury to decide whether the shoe requirement benefited the employees.