Costco 2008 Annual Report Download - page 80

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was signed/finalized by the court on May 13, 2008. The Company is seeking appellate review in part of
that decision. Williams has been stayed pending the class certification outcome in Randall, but the stay
has not yet been lifted. The parties in Randall have agreed in principle on a partial settlement of the
action, requiring a payment of up to $16 million by the Company, which was reserved for in 2008. Any
settlement would be subject to court approval.
On December 26, 2007, another putative class action was filed principally alleging denial of overtime.
The complaint alleges misclassification of certain California managers. On March 6, 2008, Costco filed
a motion to dismiss. On May 15, 2008, the Court partially granted the motion, dismissing the Labor
Code 226 claims and refusing to expand the statute of limitations for the remaining claims. An answer
was filed on May 27, 2008. Jesse Drenckhahn v. Costco Wholesale Corp., United States District Court
(Los Angeles), Case No. CV08-1408 FMC (JMJ).
An overtime compensation case certified as a class action on behalf of present and former hourly
employees in California, in which plaintiffs principally allege that Costco’s semi-annual bonus formula is
improper with regard to retroactive overtime pay. Anthony Marin v. Costco Wholesale Corp., Superior
Court for the County of Alameda, Case No. RG-04150447. Costco has filed an appeal challenging the
entry of a $5.3 million judgment in favor of the class.
A case purportedly brought as a class action on behalf of present and former hourly employees in
California, in which the plaintiff principally alleges that the Company’s routine closing procedures and
security checks cause employees to incur delays that qualify as uncompensated working time and that
effectively deny them statutorily guaranteed meal periods and rest breaks. The complaint was filed on
October 2, 2008. Anthony Castaneda v. Costco Wholesale Corp., Superior Court for the County of Los
Angeles, Case No. BC-399302.
A putative class action, filed on January 24, 2008, purportedly brought on behalf of two groups of
former California employees—an “Unpaid Wage Class” and a “Wage Statement Class.” The “Unpaid
Wage Class” focuses on an allegation that Costco improperly deducts employee credit card balances
from final paychecks, while the “Wage Statement Class” focuses on an allegation that Costco’s final
paychecks do not contain the accurate and itemized information required for wage statements by
applicable law. On May 29, 2008, the Court granted Costco’s motion to dismiss, dismissing with
prejudice the Labor Code 2236 (wage-itemization) claims. Carrie Ward v. Costco Wholesale Corp.,
United States District Court (Los Angeles), Case No. CV08-02013 FMC (FFM).
Claims in these six actions are made under various provisions of the California Labor Code and the
California Business and Professions Code. Plaintiffs seek restitution/disgorgement, compensatory
damages, various statutory penalties, punitive damages, interest, and attorneys’ fees.
A case brought as a class action on behalf of certain present and former female managers, in which
plaintiffs allege denial of promotion based on gender in violation of Title VII of the Civil Rights Act of
1964 and California state law. Shirley “Rae” Ellis v. Costco Wholesale Corp., United States District
Court (San Francisco), Case No. C-04-3341-MHP. Plaintiffs seek compensatory damages, punitive
damages, injunctive relief, interest and attorneys’ fees. Class certification was granted by the district
court on January 11, 2007. On May 11, 2007, the United States Court of Appeals for the Ninth Circuit
granted a petition to hear the Company’s appeal of the certification. Proceedings in the district court
have been stayed during the appeal.
Class actions stated to have been brought on behalf of certain present and former Costco members.
In Evans, et ano., v. Costco Wholesale Corp., No. BC351869 (Superior Court for the County of Los
Angeles), and Dupler v. Costco Wholesale Corp., Index No. 06-007555 (commenced in the Supreme
Court of Nassau County, New York and removed to the United States District Court for the Eastern
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