Tyson Foods 2006 Annual Report Download - page 58

former employees of the Company, and plaintiffs seek reimburse-
ment for an unspecified amount of unpaid wages, liquidated
damages, attorney fees and costs. To date, approximately 5,100
consents have been filed with the District Court. Plaintiffs filed
their Renewed Motion for Court Supervised Notice to Potential
Collective Action Members on April 18, 2006, to which the
Company filed its response on June 27, 2006. A hearing on the
motion was held October 24, 2006. On November 16, 2006, the
Court denied the Plantiffs’ motion. No trial date has been set.
On August 22, 2000, seven employees of the Company filed the
case of De Asencio v. Tyson Foods, Inc.in the U.S. District Court for
the Eastern District of Pennsylvania. This lawsuit is similar to Fox in
that employees claim violations of the FLSA for allegedly failing to
pay for time taken to put on, take off and sanitize certain working
supplies, and violations of the Pennsylvania Wage Payment and
Collection Law. Plaintiffs sought to represent themselves and all
similarly situated current and former employees of the poultry
processing plant in New Holland, Pennsylvania, and plaintiffs
sought reimbursement for an unspecified amount of unpaid wages,
liquidated damages, attorney fees and costs. Approximately 560
additional current or former employees filed consents to join the
lawsuit. A two-week jury trial beginning on June 5, 2006, ended with
a verdict in Tyson’s favor. Final judgment was entered on June 22,
2006, and the Plaintiffs filed their notice of appeal July 21, 2006.
The appeal of this matter is now pending in the U. S. Court of
Appeals for the Third Circuit. Appellants filed their opening brief
October 30, 2006. The Company’s Appellee brief was filed on
November 29, 2006.
On November 5, 2001, Maria Chavez, et al. v. IBP, Lasso Acquisition
Corporation and Tyson Foods, Inc. (Chavez) was filed in the U.S.
District Court for the Eastern District of Washington by employees
of Tyson Fresh Meat’s (TFM) Pasco, Washington, beef slaughter,
processing and hides facilities, alleging violations of the FLSA,
29 U.S.C. Sections 201–219, as well as violations of the Washington
State Minimum Wage Act, RCW chapter 49.46, Industrial Welfare
Act, RCW chapter 49.12, and the Wage Deductions-Contribution-
Rebates Act, RCW chapter 49.52. The Chavez lawsuit alleges TFM
and/or the Company required employees to perform unpaid work
related to donning and doffing certain personal protective clothing
and equipment, both prior to and after their shifts, as well as during
meal periods. Plaintiffs further allege the holdings in Alvarez, et al.
v. IBP support a claim of collateral estoppel and/or res judicata as
to many of the issues raised in this litigation. On July 20, 2005, judg-
ment was entered for $11.4 million, exclusive of costs and attorney
fees. Attorneys for the Chavez plaintiffs have indicated to the
Company their intention to file a follow-on suit to Chavez for
different potential claimants alleging similar violations to those
raised in Chavez. On November 28, 2005, the District Court
awarded the attorneys for the Chavez plaintiffs approximately
$1.9 million in fees and expenses. On December 12, 2005, the District
Court awarded additional costs of $19,651. On December 8, 2005,
the Company filed a notice of appeal with the Ninth Circuit Court
of Appeals. The parties later met and reached an agreement that
will resolveChavez and certain post-Chavez claims for $10.2 mil-
lion. On May 19, 2006, a Settlement Agreement and a Joint Motion
to Approve Class Action Settlement was filed by the parties. The
District Court held a Final Approval Hearing on September 26, 2006,
at which time it considered the terms of settlement. The settle-
ment was approved by the District Court on September 28, 2006,
and distribution of the settlement amounts are scheduled to occur
in the first and second quarters of fiscal 2007.
On November 21, 2002, a lawsuit titled Emily D. Jordan, et al. v.
IBP, inc. and Tyson Foods, Inc., was filed in the U.S. District Court
for the Middle District of Tennessee. Ten current and former hourly
employees of TFM’s case-ready facility in Goodlettsville, Tennessee,
filed a complaint on behalf of themselves and other unspecified,
allegedly similarly situated employees, claiming the defendants
violated the overtime provisions of the FLSA. The suit alleges the
defendants failed to pay employees for all hours worked from
the plant’s commencement of operations in April 2001. In partic-
ular, the suit alleges employees should be paid for the time it takes
to collect, assemble and put on, take off and wash their health,
safety and production gear at the beginning and end of their shifts
and during their meal period. The suit also alleges the Company
deducts 30 minutes per day from employees’ paychecks regardless
of whether employees obtain a full 30-minute period for their
meal. Plaintiffs are seeking a declaration the defendants did not
comply with the FLSA, and an award for an unspecified amount of
back pay compensation and benefits, unpaid entitlements, liqui-
dated damages, prejudgment and post-judgment interest, attorney
fees and costs. On November 17, 2003, the District Court condition-
ally certified a collective action composed of similarly situated
current and former employees at the Goodlettsville facility based
on clothes changing and washing activities and unpaid production
work during meal periods, since the plant operations began in April
2001. Class Notices to approximately 4,500 prospective class mem-
bers were mailed on January 21, 2004. Approximately 525 current
and former employees opted into the class. A second, opt-in Class
Notice was mailed to 1,996 current and former employees who were
hired after December 16, 2003. In March 2006, Plaintiffs reported a
total of 48 additional persons who opted into the class. Discovery
is scheduled to conclude December 31, 2006, after which the District
Court will hold a status conference to discuss the need for disposi-
tive motions and trial.
NOTE 21 SUBSEQUENT EVENT
In November 2006, Tyson Limited Partnership converted approxi-
mately five million shares of Class B stock to Class A stock on a
one for one basis.
56 Ty s on Foods, Inc. 2006 Annual Report
Notes to Consolidated Financial Statements continued