Pizza Hut 2009 Annual Report Download - page 203

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On March 26, 2009, Taco Bell was served with a putative class action lawsuit filed in Orange County Superior Court
against Taco Bell and the Company styled Endang Widjaja vs. Taco Bell Corp., et al. The case was filed on behalf of
Widjaja, a former California hourly assistant manager, and purportedly all other individuals employed in Taco Bell’s
California restaurants as managers and alleges failure to reimburse for business related expenses, failure to provide rest
periods, unfair business practices and conversion. Taco Bell removed the case to federal district court and filed a notice
of related case. On June 18, 2009 the case was transferred to the Eastern District of California.
On May 19, 2009 the court granted Taco Bell’s motion to consolidate the Medlock, Hardiman, Leyva and Naranjo
matters, and the consolidated case is styled In Re Taco Bell Wage and Hour Actions. On July 22, 2009, Taco Bell filed a
motion to dismiss, stay or consolidate the Widjaja case with the In Re Taco Bell Wage and Hour Actions, and Taco Bell’s
motion to consolidate was granted on October 19, 2009.
The In Re Taco Bell Wage and Hour Actions plaintiffs filed a consolidated complaint on June 29, 2009, and the court set
a filing deadline of August 26, 2010 for motions regarding class certification. The hearing on any class certification
motion is currently scheduled for January 10, 2011. Discovery is underway.
Taco Bell and the Company deny liability and intend to vigorously defend against all claims in this lawsuit. However, in
view of the inherent uncertainties of litigation, the outcome of this case cannot be predicted at this time. Likewise, the
amount of any potential loss cannot be reasonably estimated.
On September 28, 2009, a putative class action styled Marisela Rosales v. Taco Bell Corp. was filed in Orange County
Superior Court. The plaintiff, a former Taco Bell crew member, alleges that Taco Bell failed to timely pay her final
wages upon termination, and seeks restitution and late payment penalties on behalf of herself and similarly situated
employees. This case appears to be duplicative of the In Re Taco Bell Wage and Hour Actions case described above.
Taco Bell removed the case to federal court on November 5, 2009, and subsequently filed a motion to dismiss, stay or
transfer the case to the same district court as the In Re Taco Bell Wage and Hour Actions case. The plaintiff did not move
to remand, but the court on its own motion ordered Taco Bell to show cause why the case should not be remanded to state
court. Taco Bell must file its response to the order to show cause by March 22, 2010. A hearing on Taco Bell’s motion to
dismiss is currently scheduled for April 12, 2010.
Taco Bell denies liability and intends to vigorously defend against all claims in this lawsuit. However, in view of the
inherent uncertainties of litigation, the outcome of this case cannot be predicted at this time. Likewise, the amount of any
potential loss cannot be reasonably estimated.
On October 14, 2008, a putative class action, styled Kenny Archila v. KFC U.S. Properties, Inc., was filed in California
state court on behalf of all California hourly employees alleging various California Labor Code violations, including rest
and meal break violations, overtime violations, wage statement violations and waiting time penalties. KFC removed the
case to the United States District Court for the Central District of California on January 7, 2009. On July 7, 2009, the
Judge ruled that the case would not go forward as a class action. Plaintiff also sought recovery of civil penalties under the
California Private Attorney General Act as a representative of other “aggrieved employees.” On August 3, 2009, the
Court ruled that the plaintiff could not assert such claims and the case had to proceed as a single plaintiff action. On the
eve of the August 18, 2009 trial, the plaintiff stipulated to a dismissal of his individual claims with prejudice but reserved
his right to appeal the Court’s rulings regarding class and PAGA claims. KFC reserved its right to make any and all
challenges to the appeal. On or about September 16, 2009, plaintiff filed a notice of appeal. The Ninth Circuit Court of
Appeals has set a briefing schedule for the appeal and plaintiff’s opening brief and KFC’s response are each due in March
2010.
KFC denies liability and intends to vigorously defend against all claims in this lawsuit. However, in view of the inherent
uncertainties of litigation, the outcome of this case cannot be predicted at this time. Likewise, the amount of any potential
loss cannot be reasonably estimated.
Form 10-K