Pizza Hut 2010 Annual Report Download - page 215

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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 December 1, 2010, a putative class action styled Teresa Nave v. Taco Bell Corp. and Taco Bell of America, Inc. was
filed in the United States District Court for the Eastern District of California, Fresno division. The plaintiff seeks to
represent a California state-wide class of hourly employees who were allegedly not timely paid all earned vacation at the
end of their employment and were denied required rest breaks. Plaintiff additionally seeks statutory “waiting time”
penalties and alleges violations of California’s Unfair Business Practices Act (B&P Code §17200 et. seq.). On December
9, 2010, the plaintiff filed a First Amended Complaint adding three individuals as named plaintiffs.
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. On December 16, 2010, the court ordered the Nave matter
consolidated with the In Re Taco Bell Wage and Hour Actions.
The In Re Taco Bell Wage and Hour Actions plaintiffs filed a consolidated complaint on June 29, 2009, and on March 30,
2010 the court approved the parties’ stipulation to dismiss the Company from the action. The parties participated in
mediation on August 5, 2010 without reaching resolution. Plaintiffs filed their motion for class certification on December
30, 2010, and the hearing on plaintiffs’ class certification motion has been scheduled for May 23, 2011.
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 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 parties stipulated to
remand of the case to Orange County Superior Court on March 18, 2010. The state court granted Taco Bell’s motion to
stay the Rosales case on May 28, 2010, but required Taco Bell to give notice to Rosales’ counsel of the In Re Taco Bell
Wage and Hour Actions mediation.
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.
Form 10-K