Panera Bread 2009 Annual Report Download - page 74

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Company is not presently able to reasonably estimate potential losses, if any, related to the lawsuit and as such, has
not recorded a liability in its Consolidated Balance Sheets.
On February 22, 2008, a purported class action lawsuit was filed against the Company and one of its
subsidiaries by Pati Johns, a former employee of the Company, in the United States District Court for the District of
Northern California. The complaint alleged, among other things, violations of the Fair Labor Standards Act and the
California Labor Code for failure to pay overtime and termination compensation. Although the Company believes
that its policies and practices were lawful and that it had meritorious defenses to each of the claims in this case,
following mediation with the plaintiff, the Company entered into a Court-approved settlement agreement in late
fiscal 2008. As a result, the Company accrued approximately $0.5 million in legal settlement costs for the fiscal year
ended December 30, 2008, which it paid in fiscal 2009.
On December 9, 2009, a purported class action lawsuit was filed against the Company and one of its
subsidiaries by Nick Sotoudeh, a former employee of the Company. The lawsuit was filed in the California Superior
Court, County of Contra Costa. The complaint alleges, among other things, violations of the California Labor Code,
failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of
California’s Unfair Competition Law. The complaint seeks, among other relief, collective and class certification of
the lawsuit, unspecified damages, costs and expenses, including attorneys’ fees, and such other relief as the Court
might find just and proper. The Company believes it and the other defendant have meritorious defenses to each of
the claims in this lawsuit and the Company is prepared to vigorously defend the lawsuit. There can be no assurance,
however, that the Company will be successful, and an adverse resolution of the lawsuit could have a material
adverse effect on the Company’s consolidated financial position and results of operations in the period in which the
lawsuit is resolved. The Company is not presently able to reasonably estimate potential losses, if any, related to the
lawsuit and as such, has not recorded a liability in its accompanying Consolidated Balance Sheets.
In addition, the Company is subject to other routine legal proceedings, claims and litigation in the ordinary
course of its business. Defending lawsuits requires significant management attention and financial resources and the
outcome of any litigation, including the matters described above, is inherently uncertain. The Company does not,
however, currently expect that the costs to resolve these routine matters will have a material adverse effect on its
consolidated financial position, results of operations or cash flows.
Other
The Company is subject to on-going federal and state income tax audits and sales tax audits and any
unfavorable rulings could materially and adversely affect its financial condition or results of operations. The
Company believes reserves for these matters are adequately provided for in its consolidated financial statements.
68
PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)