CarMax 2015 Annual Report Download - page 21

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17
Expansion
Since opening our first used car store in 1993, we have grown organically, through the construction and opening of
company-operated stores. We do not franchise our operations. As of February 28, 2015, we operated 144 used car
stores in 73 U.S. markets, which covered approximately 61% of the U.S. population. We believe that further
geographic expansion and additional fill-in opportunities in existing markets will provide a foundation for future sales
and earnings growth. We currently plan to open between 13 and 16 stores in each of the next three fiscal years. In
fiscal 2016, we plan to open 14 new stores and relocate one store whose lease is expiring.
For additional details on our future expansion plans, see “Fiscal 2016 Planned Store Openings,” included in Part II,
Item 7, of this Form 10-K.
Item 3. Legal Proceedings.
On April 2, 2008, Mr. John Fowler filed a putative class action lawsuit against CarMax Auto Superstores California,
LLC and CarMax Auto Superstores West Coast, Inc. in the Superior Court of California, County of Los Angeles.
Subsequently, two other lawsuits, Leena Areso et al. v. CarMax Auto Superstores California, LLC and Justin Weaver
v. CarMax Auto Superstores California, LLC, were consolidated as part of the Fowler case. The allegations in the
consolidated case involved: (1) failure to provide meal and rest breaks or compensation in lieu thereof; (2) failure to
pay wages of terminated or resigned employees related to meal and rest breaks and overtime; (3) failure to pay
overtime; (4) failure to comply with itemized employee wage statement provisions; (5) unfair competition; and
(6) California’s Labor Code Private Attorney General Act. The putative class consisted of sales consultants, sales
managers, and other hourly employees who worked for the company in California from April 2, 2004, to the present.
On May 12, 2009, the court dismissed all of the class claims with respect to the sales manager putative class. On
June 16, 2009, the court dismissed all claims related to the failure to comply with the itemized employee wage
statement provisions. The court also granted CarMax's motion for summary adjudication with regard to CarMax's
alleged failure to pay overtime to the sales consultant putative class.
The claims currently remaining in the lawsuit regarding the sales consultant putative class are: (1 failure to provide
meal and rest breaks or compensation in lieu thereof; (2) failure to pay wages of terminated or resigned employees
related to meal and rest breaks; (3) unfair competition; and (4) California’s Labor Code Private Attorney General Act.
On November 21, 2011, the court granted CarMax’s motion to compel the plaintiffs’ remaining claims into arbitration
on an individual basis. The plaintiffs appealed the court’s ruling and on March 26, 2013, the California Court of
Appeal reversed the trial court's order granting CarMax's motion to compel arbitration. On October 8, 2013, CarMax
filed a petition for a writ of certiorari seeking review in the United States Supreme Court. On February 24, 2014, the
United States Supreme Court granted CarMax's petition for certiorari, vacated the California Court of Appeal decision
and remanded the case to the California Court of Appeal for further consideration. The California Court of Appeal
determined that Plaintiffs' Labor Code Private Attorney General Act claim is not subject to arbitration, but the
remaining claims are subject to arbitration on an individual basis. CarMax appealed this decision on March 9, 2015
by filing a petition for review with the California Supreme Court. The Fowler lawsuit seeks compensatory and special
damages, wages, interest, civil and statutory penalties, restitution, injunctive relief and the recovery of attorneys’ fees.
We are unable to make a reasonable estimate of the amount or range of loss that could result from an unfavorable
outcome in this matter.
We are involved in various other legal proceedings in the normal course of business. Based upon our evaluation of
information currently available, we believe that the ultimate resolution of any such proceedings will not have a
material adverse effect, either individually or in the aggregate, on our financial condition, results of operations or cash
flows.
Item 4. Mine Safety Disclosures.
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table identifies our executive officers as of February 28, 2015. We are not aware of any family
relationships among any of our executive officers or between any of our executive officers and any directors. All
executive officers are elected annually and serve for one year or until their successors are elected and qualify. The
next election of officers will occur in June 2015.