Rite Aid 2013 Annual Report Download - page 108

RITE AID CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the Years Ended March 2, 2013, March 3, 2012 and February 26, 2011
(In thousands, except per share amounts)
17. Multiemployer Plans that Provide Pension Benefits (Continued)
During fiscal 2013, the Company withdrew from the 1360 New Jersey Pension effective August
2011 and incurred a $2,032 withdrawal liability and Central Ohio Locals 1059 and 75 effective
March 31, 2013 and incurred a liability of $3,000.
During fiscal 2012, the Company withdrew from the NW OH Pension Fund effective December
2011 and incurred a $1,300 withdrawal liability.
18. Commitments, Contingencies and Guarantees
Legal Matters
The Company is a party to legal proceedings, investigations and claims in the ordinary course of its
business, including the matters described below. The Company records accruals for outstanding legal
matters when it believes it is probable that a loss will be incurred and the amount can be reasonably
estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect
the amount of any accrual and developments that would make a loss contingency both probable and
reasonably estimable. If a loss contingency is not both probable and estimable, the Company does not
establish an accrued liability.
The Company’s contingencies are subject to significant uncertainties, including, among other
factors: (i) proceedings are in early stages; (ii) whether class or collective action status is sought and
the likelihood of a class being certified; (iii) the outcome of pending appeals or motions; (iv) the extent
of potential damages, fines or penalties, which are often unspecified or indeterminate; (v) the impact of
discovery on the matter; (vi) whether novel or unsettled legal theories are at issue; (vii) there are
significant factual issues to be resolved; and/or (viii) in the case of certain government agency
investigations, whether a sealed qui tam lawsuit (‘‘whistleblower’’ action) has been filed and whether
the government agency makes a decision to intervene in the lawsuit following investigation.
Since December 2008, the Company has been named in a series of fifteen (15) currently pending
putative collective and class action lawsuits filed in federal and state courts around the country, purportedly
on behalf of current and former assistant store managers and co-managers working in the Company’s stores
at various locations outside California, including Craig et al v. Rite Aid Corporation et al pending in the
United States District Court for the Middle District of Pennsylvania (the ‘‘Court’’) and Ibea et al v. Rite Aid
Corporation pending in the United States District Court for the Southern District of New York. The
lawsuits allege that the Company failed to pay overtime to salaried assistant store managers and co-
managers as purportedly required under the Fair Labor Standards Act (‘‘FLSA’’) and certain state statutes.
The lawsuits also seek other relief, including liquidated damages, punitive damages, attorneys’ fees, costs
and injunctive relief arising out of the state and federal claims for overtime pay. The Company aggressively
challenged both the merits of the lawsuits and the allegation that the cases should be certified as class or
collective actions. However, in light of the cost and uncertainty involved in these lawsuits, in May 2012, the
Company entered into a settlement agreement with Plaintiffs’ counsel to resolve the series of lawsuits. The
parties filed a joint motion for preliminary approval of the settlement with the Court which was granted on
June 18, 2012. A final resolution of these matters was subject to final Court approval. The Court held a
final approval hearing on December 4, 2012 and issued an Order approving the settlement on
107