Dollar General 2013 Annual Report Download - page 155

DOLLAR GENERAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. Commitments and contingencies (Continued)
The Company and the EEOC engaged in the statutorily required conciliation process, and despite
the Company’s good faith efforts to resolve the matter, the Commission notified the Company on
July 26, 2012 of its view that conciliation had failed.
On June 11, 2013, the EEOC filed a lawsuit in the United States District Court for the Northern
District of Illinois entitled Equal Opportunity Commission v. Dolgencorp, LLC d/b/a Dollar General
(Case No. 1:13-cv-04307) in which the Commission alleges that the Company’s criminal background
check policy has a disparate impact on ‘‘Black Applicants’’ in violation of Title VII and seeks to
recover monetary damages and injunctive relief on behalf of a class of ‘‘Black Applicants.’’ The
Company filed its Answer to the Complaint on August 9, 2013.
On January 29, 2014, the court entered an order, which, among other things, bifurcates the issues
of liability and damages during discovery and at trial. Under this order, fact discovery relating to
liability is to be completed by September 15, 2014. A status conference is scheduled for June 17, 2014.
The Company believes that its criminal background check process is both lawful and necessary to a
safe environment for its employees and customers and the protection of its assets and shareholders’
investments. The Company also does not believe that this matter is amenable to class or similar
treatment. However, at this time, it is not possible to predict whether the action will ultimately be
permitted to proceed as a class or in a similar fashion or the size of any putative class. Likewise, at this
time, it is not possible to estimate the value of the claims asserted, and, therefore, the Company cannot
estimate the potential exposure or range of potential loss. If the matter were to proceed successfully as
a class or similar action or the Company is unsuccessful in its defense efforts as to the merits of the
action, it could have a material adverse effect on the Company’s consolidated financial statements as a
whole.
On May 23, 2013, a lawsuit entitled Juan Varela v. Dolgen California and Does 1 through 50 (Case
No. RIC 1306158) (‘‘Varela’’) was filed in the Superior Court of the State of California for the County
of Riverside in which the plaintiff alleges that he and other ‘‘key carriers’’ were not provided with meal
and rest periods in violation of California law and seeks to recover alleged unpaid wages, injunctive
relief, consequential damages, pre-judgment interest, statutory penalties and attorneys’ fees and costs.
The Varela plaintiff seeks to represent a putative class of California ‘‘key carriers’’ as to these claims.
The Varela plaintiff also asserts a claim for unfair business practices and seeks to proceed under
California’s Private Attorney General Act (‘‘PAGA’’).
The Company removed the action to the United States District Court for the Central District of
California (Case No. 5:13-cv-01172VAP-SP) on July 1, 2013, and filed its Answer to the Complaint on
July 1, 2013. On July 30, 2013, the plaintiff moved to remand the action to state court. The Company’s
response to that motion was filed on August 19, 2013.
On September 13, 2013, the court granted plaintiff’s motion and remanded the case. The Company
filed a Petition for Permission to Appeal to the United States Court of Appeals for the Ninth Circuit
on September 23, 2013. The Petition for Permission to Appeal is pending.
A status conference has been scheduled by the Superior Court for July 23, 2014. The parties have
agreed to informally stay discovery pending a decision by the Ninth Circuit on the Petition for
Permission to Appeal.
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