HP 2014 Annual Report Download - page 166

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 15: Litigation and Contingencies (Continued)
on the copying speed when operated in the normal print mode set by default in the device. On
November 16, 2012, the court issued a decision holding that Belgium law is not in conformity with EU
law in a number of respects and ordered that, by November 2013, Reprobel substantiate that the
amounts claimed by Reprobel are commensurate with the harm resulting from legitimate copying under
the reprographic exception. HP subsequently appealed that court decision to the Courts of Appeal in
Brussels seeking to confirm that the Belgian law is not in conformity with EU law and that, if Belgian
law is interpreted in a manner consistent with EU law, no payments by HP are required or,
alternatively, the payments already made by HP are sufficient to comply with its obligations under
Belgian law. On October 23, 2013, the Court of Appeal in Brussels stayed the proceedings and referred
several questions to the CJEU relating to whether the Belgian reprographic copyright levies system is
in conformity with EU law.
Based on industry opposition to the extension of levies to digital products, HP’s assessments of the
merits of various proceedings and HP’s estimates of the number of units impacted and the amounts of
the levies, HP has accrued amounts that it believes are adequate to address the matters described
above. However, the ultimate resolution of these matters and the associated financial impact on HP,
including the number of units impacted and the amount of levies imposed, remains uncertain.
Fair Labor Standards Act Litigation. HP is involved in several lawsuits in which the plaintiffs are
seeking unpaid overtime compensation and other damages based on allegations that various employees
of Electronic Data Systems Corporation (‘‘EDS’’) or HP have been misclassified as exempt employees
under the Fair Labor Standards Act and/or in violation of the California Labor Code or other state
laws. Those matters include the following:
•Cunningham and Cunningham, et al. v. Electronic Data Systems Corporation is a purported
collective action filed on May 10, 2006 in the United States District Court for the Southern
District of New York claiming that current and former EDS employees allegedly involved in
installing and/or maintaining computer software and hardware were misclassified as exempt
employees. Another purported collective action, Steavens, et al. v. Electronic Data Systems
Corporation, was filed on October 23, 2007 in the same court alleging similar facts. The Steavens
case has been consolidated for pretrial purposes with the Cunningham case. On December 14,
2010, the court granted conditional certification of a class consisting of employees in 20 legacy
EDS job codes in the consolidated Cunningham and Steavens matter. On December 11, 2013,
HP and plaintiffs’ counsel in the consolidated Cunningham/Steavens matter, and the Salva matter
described below, mediated these cases and reached a settlement agreement. The court
preliminarily approved the settlement on November 4, 2014. The final approval hearing is
scheduled for June 8, 2015.
•Salva v. Hewlett-Packard Company is a purported collective action filed on June 15, 2012 in the
United States District Court for the Western District of New York alleging that certain
information technology employees allegedly involved in installing and/or maintaining computer
software and hardware were misclassified as exempt employees under the Fair Labor Standards
Act. On December 11, 2013, HP and plaintiffs’ counsel in the consolidated Cunningham/Steavens
matter and the Salva matter mediated these cases and reached a settlement agreement. The
court consolidated the Salva matter into the Cunningham/Steavens matter and preliminarily
approved the settlement on November 4, 2014. The final approval hearing is scheduled for
June 8, 2015.
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