Dollar General 2011 Annual Report Download - page 181

10-K
DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Commitments and contingencies (Continued)
Legal proceedings
On August 7, 2006, a lawsuit entitled Cynthia Richter, et al. v. Dolgencorp, Inc., et al. was filed in
the United States District Court for the Northern District of Alabama (Case No. 7:06-cv-01537-LSC)
(‘‘Richter’’) in which the plaintiff alleges that she and other current and former Dollar General store
managers were improperly classified as exempt executive employees under the Fair Labor Standards
Act (‘‘FLSA’’) and seeks to recover overtime pay, liquidated damages, and attorneys’ fees and costs. On
August 15, 2006, the Richter plaintiff filed a motion in which she asked the court to certify a nationwide
class of current and former store managers. The Company opposed the plaintiff’s motion. On
March 23, 2007, the court conditionally certified a nationwide class. On December 2, 2009, notice was
mailed to over 28,000 current or former Dollar General store managers. Approximately 3,950
individuals have opted into the lawsuit, approximately 800 of whom have been dismissed for various
reasons, including failure to cooperate in discovery.
On January 31, 2012, the court entered an amended scheduling order that governs, among other
things, an extended deadline for certain limited fact discovery (March 9, 2012) and the Company’s
anticipated decertification motion (April 2, 2012). No deadline currently exists for potentially
dispositive motions, and the Court has not set a trial date.
The Company believes that its store managers are and have been properly classified as exempt
employees under the FLSA and that the Richter action is not appropriate for collective action
treatment. The Company has obtained summary judgment in some, although not all, of its pending
individual or single-plaintiff store manager exemption cases in which it has filed such a motion.
The Company is vigorously defending the Richter matter. However, at this time, it is not possible
to predict whether Richter ultimately will be permitted to proceed collectively, and no assurances can be
given that the Company will be successful in its defense of the action on the merits or otherwise.
Similarly, at this time the Company cannot estimate either the size of any potential class or the value
of the claims asserted in Richter. For these reasons, the Company is unable to estimate any potential
loss or range of loss in the matter; however, if the Company is not successful in its defense efforts, the
resolution of Richter could have a material adverse effect on the Company’s financial statements as a
whole.
On May 18, 2006, the Company was served with a lawsuit entitled Tammy Brickey, Becky Norman,
Rose Rochow, Sandra Cogswell and Melinda Sappington v. Dolgencorp, Inc. and Dollar General
Corporation (Western District of New York, Case No. 6:06-cv-06084-DGL, originally filed on
February 9, 2006 and amended on May 12, 2006 (‘‘Brickey’’)). The Brickey plaintiffs sought to proceed
collectively under the FLSA and as a class under New York, Ohio, Maryland and North Carolina wage
and hour statutes on behalf of, among others, assistant store managers who claim to be owed wages
(including overtime wages) under those statutes. On February 22, 2011, the court denied the plaintiffs’
class certification motion in its entirety and ordered that the matter proceed only as to the named
plaintiffs. On March 22, 2011, the plaintiffs moved the court for reconsideration of its Order denying
their class certification motion. On March 30, 2011, the plaintiffs’ reconsideration motion was denied,
and the plaintiffs did not appeal that ruling. The case is proceeding now only as to the named
plaintiffs, and the Company does not expect the outcome to be material to its financial statements as a
whole.
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