Costco 2011 Annual Report Download - page 77

law for full-time employees who were subject to the closing procedures between March 1, 2008, and
October 1, 2009. The case has been renamed Eric Stiller v. Costco Wholesale Corp. and the parties
are conducting discovery. A similar class action was filed on November 20, 2009, in the State of
Washington. Raven Hawk v. Costco Wholesale Corp., King County Superior Court,
Case No. 09-242196-0-SEA. On December 3, 2010, the court granted in part plaintiff’s motion for class
certification; the class certified consists of people employed in Washington state warehouses from
November 2006 through November 2009 who had clocked out and were detained during closing
procedures without compensation. Trial has been scheduled for February 13, 2012.
On July 14, 2010, a putative class action was filed alleging that the Company unlawfully failed to pay
overtime compensation, denied meal and rest breaks, failed to pay minimum wages, failed to provide
accurate wage-itemization statements, and willfully failed to pay termination wages allegedly resulting
from misclassification of certain California department managers as exempt employees. On
September 3, 2010, the Company removed the case to federal court. The court remanded the action,
and the Company’s petition to the Ninth Circuit for permission to appeal the remand order was denied.
On June 24, 2011, defendants filed a motion to strike the class and certain other allegations from the
complaint. On July 26, 2011, the court granted the motion in part, without leave to amend, striking
allegations predating December 31, 2008, which are covered by a prior class settlement. The Court
also granted the motion with respect to allegations post-dating December 31, 2008, but granted plaintiff
leave to amend. On August 25, 2011, plaintiff filed an amended complaint, and on September 20,
2011, defendants renewed the motion to strike. The motion is set for hearing on October 13, 2011.
Manuel Medrano v. Costco Wholesale Corp., and Costco Wholesale Membership, Inc., Superior Court
of California (Los Angeles), Case No. BC441597.
In Velazquez v. Costco, filed April 4, 2011, now pending in U.S. District Court for the Central District of
California, Case No. CV11-00508 JVS (RNBx), three former California Receiving Managers seek class
treatment for their claim that Costco misclassified California Receiving Managers as exempt. On
October 11, 2011, the court denied plaintiffs’ motion for class certification.
On May 12, 2011, a putative class action was filed on behalf of California employees alleging that the
Company failed to provide its cashiers with seats, in violation of California law. The complaint also
alluded to purported overtime violations and missed meal periods and rest breaks. On August 10,
2011, the Company removed the case to federal court. On August, 17, 2011, the Company filed a
motion to dismiss the class action complaint. On August 30, 2011, the plaintiff voluntarily dismissed the
case, and a dismissal without prejudice was entered. Suzanne Justice v. Costco Wholesale Corp.,
United States District Court (Los Angeles), Case No. LACV11-6563-ODW (JEMx).
Claims in the above actions (other than Hawk) 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 September 16, 2011, the United States Court of Appeals for the Ninth
Circuit reversed the order of class certification and remanded to the district court for further
proceedings.
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