|9 Months Ended|
Oct. 27, 2012
|LITIGATION MATTERS [Abstract]|
9. LITIGATION MATTERS
In 2006, a former store manager filed a collective action against the Company in Alabama federal court. She claims that she and other store managers should have been classified as non-exempt employees under the Fair Labor Standards Act and received overtime compensation. The Court preliminarily allowed nationwide (except California) certification. The Company’s motion to decertify the collective action was dismissed without prejudice in 2010. The Company filed another motion to decertify on February 29, 2012. That motion was granted on November 2, 2012. The individual claims of the four named plaintiffs will proceed to trial on February 25, 2013. The individual claims of the 261 opt-in plaintiffs were dismissed without prejudice and these plaintiffs have 90 days to file individually to preserve their claims.
In 2009, 34 plaintiffs filed a class action Complaint in a federal court in Virginia, alleging gender pay and promotion discrimination under Title VII. In 2010, the case was dismissed with prejudice. On September 13, 2012, a three judge panel of the appellate court denied plaintiffs’ appeal and affirmed the decision of the lower court. Thereafter it further denied plaintiffs’ petition for rehearing before the entire court.
In April 2011, a former assistant store manager, on behalf of himself and those similarly situated, instituted a class action in a California state court primarily alleging a failure by the Company to provide meal breaks, to compensate for all hours worked, and to pay overtime compensation. The Company removed the case to federal court which denied plaintiffs’ motion for remand of the case to state court. Discovery in this case is at an early stage. There is no trial date.
In June 2011, Winn-Dixie Stores, Inc. and various of its affiliates instituted suit in federal court in Florida alleging that the Company, in approximately 48 shopping centers in the state of Florida and five other states where Dollar Tree and Winn-Dixie are both tenants, is selling goods and products in Dollar Tree stores in violation of an exclusive right of Winn-Dixie to sell and distribute such items. It seeks both monetary damages and injunctive relief. At approximately the same time, Winn-Dixie also sued Dollar General, Inc. and Big Lots, Inc. making essentially the same allegations against them and seeking the same relief. The Court consolidated the three cases and they proceeded to trial, without a jury, in May of this year. On August 10, 2012, the Court issued a Findings of Fact and Conclusions of Law. The ruling denied Winn-Dixie’s claim for monetary damages, either compensatory or punitive, and, of the original 48 Dollar Tree stores at issue, granted plaintiff’s request for injunctive relief with respect to just one store. A final Order incorporating these findings and conclusions was entered and Winn-Dixie has appealed to the U.S. Court of Appeals for the 11th Circuit.
In the summer and fall of 2011, five collective action lawsuits were filed against the Company in federal courts in Georgia, Colorado, Florida, Michigan and Illinois by different assistant store managers, each alleging he or she was forced to work off the clock in violation of the federal Fair Labor Standards Act. Plaintiffs also assert various state law claims for which they seek class treatment. The Michigan case is currently stayed. The Florida case has been transferred to the U.S. District Court for the Eastern District of Virginia but no substantive issues have been decided to date. The Georgia suit sought statewide class certification. Those state law claims were ultimately dismissed prior to the case also being transferred to the U.S. District Court for the Eastern District of Virginia. The Virginia federal judge then dismissed all the nationwide federal claims of the putative class on the basis those claims could be adjudicated in the companion case filed in Colorado. The Colorado case is farthest along in litigation posture. Although the statewide class claims were dismissed, the Court did conditionally certify under the Fair Labor Standards Act a class of all assistant store managers who worked for Dollar Tree from July 16, 2008 to the present. Notice to potential class members has been sent and the time for all potential plaintiffs to opt-in to the Colorado collective action ends on December 10, 2012. The Illinois case in addition to assistant store managers, also included a putative class of all other hourly store associates, and made the same allegations on their behalf. The Illinois case was transferred to the Eastern District of Virginia in June and the Virginia federal judge ruled that all claims made on behalf of assistant store managers under the Fair Labor Standards Act should be dismissed on the basis those claims could be adjudicated in the companion case filed in Colorado. The state law assistant store manager class claims remain and are the subject matter of a pending motion to dismiss. The judge, however, did conditionally certify under the Fair Labor Standards Act a class of all sales associates who worked for Dollar Tree from October 2, 2009 to the present. Notice to the putative class has not gone out yet as there are current motions pending about the content of the notice.
In May 2012, three associates who were formerly employed at the Company’s distribution center in Joliet, Illinois filed a Rule 23 class action lawsuit in federal court in Illinois alleging that at the time of their termination of employment, they failed to receive compensation for their accrued paid time off. They brought this case on behalf of themselves and those former associates similarly situated. At the request of the parties, the case was stayed and referred to a U.S. Magistrate Judge for a settlement conference. A settlement was reached and preliminarily approved by the Court. Notice of the proposed settlement will in the near future be delivered to the individual potential class members. No date has yet been set for a Fairness Hearing on the settlement. The settlement amount is immaterial and has been accrued in the accompanying condensed consolidated financial statements.
In July 2012, a former non-exempt hourly associate who alleges his primary duty was to work the cash register, on behalf of himself and those similarly situated, filed a Complaint under the California Private Attorneys General Act (“PAGA”), in a California state court, alleging the Company failed to provide suitable seating as allegedly required by state law. The Company removed the case to federal court and filed its Answer to the Complaint. Discovery is presently under way and the case has been scheduled for trial in July of next year.
In July 2012, a former assistant store manager, on behalf of himself and those similarly situated, filed a class action Complaint in a California state court, alleging the Company failed to provide to assistant store managers who worked one or more work periods in excess of three and one-half hours paid ten-minute rest breaks during which they were relieved of all duties. The alleged relevant time period is July 13, 2008 to the present. The Company has just begun its investigation of the allegations contained in the Complaint.
The Company will vigorously defend itself in these matters. The Company does not believe that any of these matters will, individually or in the aggregate, have a material effect on its business or financial condition. The Company cannot give assurance, however, that one or more of these lawsuits will not have a material effect on its results of operations for the period in which they are resolved. Based on the information available to the Company, including the amount of time remaining before trial, the results of discovery and the judgment of internal and external counsel, the Company is unable to express an opinion as to the outcome of these matters which are not settled and cannot estimate a potential range of loss.
Tabular disclosure of the loss contingencies that were reported in the period or disclosed as of the balance sheet date.
Reference 1: http://www.xbrl.org/2003/role/presentationRef