Family Dollar 2010 Annual Report Download - page 59

January 26, 2010, in the Circuit Court of Jackson County, Missouri. The Company removed it to federal court,
and the plaintiff voluntarily dismissed. The plaintiff later re-filed the case in the Circuit Court of Jackson County.
The MDL Panel has ordered that three other state-law misclassification cases should not be (or should not
remain) consolidated with the related MDL cases pending in the N.C. Federal Court. Barker v. Family Dollar,
Inc., alleging violations of the Kentucky Wages and Hours Law, was filed in Circuit Court in Jefferson County,
Kentucky on February 17, 2010, and removed to the United States District Court for the Western District of
Kentucky. The MDL Panel declined to transfer and consolidate this case with the related misclassification cases.
Youngblood, et al. v. Family Dollar Stores, Inc., Family Dollar, Inc., Family Dollar Stores of New York, Inc. and
Does 1 through 10, 3:09-cv-1941, was filed in the United States District Court for the Southern District of New
York on April 2, 2009. Rancharan v. Family Dollar Stores, Inc., was filed in the Supreme Court of the State of
New York, Queens County on March 4, 2009, and removed to the United States District Court for the Eastern
District of New York on May 6, 2009. Both Youngblood and Rancharan involve alleged violations of the New
York Labor Law. These cases had been transferred to the N.C. Federal Court and consolidated with the MDL
cases, on June 8, 2009, and June 30, 2009, respectively, but the MDL Panel remanded them on August 17, 2010.
The plaintiffs in these cases seek recovery of overtime pay, liquidated damages, and attorneys’ fees and court
costs.
In general, the Company continues to believe that its Store Managers are “exempt” employees under the FLSA
and have been and are being properly compensated under both federal and state laws. The Company further
believes that these actions are not appropriate for collective or class action treatment. The Company intends to
vigorously defend the claims in these actions. While the N.C. Federal Court has previously found that the Grace
and Ward actions are not appropriate for collective action treatment, at this time it is not possible to predict
whether one or more of the remaining cases may be permitted to proceed collectively on a nationwide or other
basis. No assurances can be given that the Company will be successful in the defense of these actions, on the
merits or otherwise. The Company cannot reasonably estimate the possible loss or range of loss that may result
from these actions.
If at some point in the future the Company determines that a reclassification of some or all of its Store Managers
as non-exempt employees under the FLSA is required, such action could have a material adverse effect on the
Company’s financial position, liquidity or results of operation. At this time, the Company cannot quantify the
impact of such a determination.
Two putative state law class actions have been filed on behalf of store Team Members who are paid on an hourly
basis. The first case, McCauley et al. v. Family Dollar, Inc., was filed on April 27, 2010, in Circuit Court in
Jefferson County, Kentucky, and was removed to the United States District Court for the Western District of
Kentucky. The plaintiffs allege that they and a putative class of similarly situated store Team Members
throughout Kentucky were required to work off the clock and without breaks in violation of the Kentucky Wages
and Hours Law. The plaintiffs seek the value of their unpaid wages (off-the-clock time and statutory breaks),
liquidated damages in an equal amount, attorneys’ fees and costs, and pre- and post-judgment interest. The
second case, Wright v. Family Dollar, Inc., was filed in the Circuit Court of Cook County, Illinois on June 11,
2010, and was removed to the United States District Court for the Northern District of Illinois on July 15, 2010.
Plaintiffs claim that they were required to work off the clock in violation of the Illinois Minimum Wage Law and
the Illinois Wage Payment and Collections Act. The plaintiffs seek the value of their unpaid wages (off-the-clock
time), liquidated damages in an equal amount, equitable relief, attorneys’ fees and costs, and pre-judgment
interest. The Company maintains strict policies prohibiting off-the-clock work and requiring employees to take
all breaks required by applicable law, and intends to vigorously defend these actions. The Company cannot
reasonably estimate the possible loss or range of loss that may result from these actions.
On October 14, 2008, a complaint was filed in the U.S. District Court in Birmingham, Alabama, captioned Scott,
et al. v. Family Dollar Stores, Inc., alleging discriminatory pay practices with respect to the Company’s female
store managers. This case was pled as a putative class action or collective action under applicable statutes on
behalf of all Family Dollar female store managers. The plaintiffs seek recovery of compensatory and punitive
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