Tyson Foods 2012 Annual Report Download - page 72

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Additionally, we enter into future purchase commitments for various items, such as grains, livestock contracts and fixed grower fees.
At September 29, 2012, these commitments totaled:
in millions
2013 $ 819
2014 73
2015 36
2016 35
2017 26
2018 and beyond 86
Total $ 1,075
Contingencies
We are involved in various claims and legal proceedings. We routinely assess the likelihood of adverse judgments or outcomes to
those matters, as well as ranges of probable losses, to the extent losses are reasonably estimable. We record accruals for such matters
to the extent that we conclude a loss is probable and the financial impact, should an adverse outcome occur, is reasonably estimable.
Such accruals are reflected in the Company’s Consolidated Financial Statements. In our opinion, we have made appropriate and
adequate accruals for these matters and believe the probability of a material loss beyond the amounts accrued to be remote; however,
the ultimate liability for these matters is uncertain, and if accruals are not adequate, an adverse outcome could have a material effect
on the consolidated financial condition or results of operations. Listed below are certain claims made against the Company and/or our
subsidiaries for which the potential exposure is considered material to the Company’s Consolidated Financial Statements. We believe
we have substantial defenses to the claims made and intend to vigorously defend these matters.
We have pending against us a lawsuit styled DeAsencio v. Tyson Foods, Inc. (E. Dist. Pennsylvania, August 22, 2000) in which the
plaintiffs allege that we failed to compensate certain poultry plant employees for the time it takes to engage in pre- and post-shift
activities such as changing into and out of protective and sanitary clothing and walking to and from the changing area, work areas and
break areas in violation of the Federal Labor Standards Act (FLSA). They seek back wages, liquidated damages, pre- and post-
judgment interest, and attorneys’ fees. Plaintiffs appealed a jury verdict and final judgment entered in our favor on June 22, 2006. On
September 7, 2007, the U.S. Court of Appeals for the Third Circuit reversed the jury verdict and remanded the case to the District
Court for further proceedings. We sought rehearing en banc, which was denied by the Court of Appeals on October 5, 2007. The
United States Supreme Court denied our petition for a writ of certiorari on June 9, 2008. The new trial date has not been set.
We have pending twelve separate wage and hour actions involving Tyson Fresh Meats Inc.’s plants located in Lexington, Nebraska
(Lopez, et al. v. Tyson Foods, Inc., D. Nebraska, June 30, 2006), Garden City and Emporia, Kansas (Garcia, et al. v. Tyson Foods, Inc.,
Tyson Fresh Meats, Inc., D. Kansas, May 15, 2006), Storm Lake, Iowa (Bouaphakeo (f/k/a Sharp), et al. v. Tyson Foods, Inc., N.D.
Iowa, February 6, 2007), Columbus Junction, Iowa (Guyton (f/k/a Robinson), et al. v. Tyson Foods, Inc., d.b.a Tyson Fresh Meats,
Inc., S.D. Iowa, September 12, 2007), Joslin, Illinois (Murray, et al. v. Tyson Foods, Inc., C.D. Illinois, January 2, 2008; and DeVoss v.
Tyson Foods, Inc. d.b.a. Tyson Fresh Meats, C.D. Illinois, March 2, 2011), Dakota City, Nebraska (Gomez, et al. v. Tyson Foods, Inc.,
D. Nebraska, January 16, 2008), Madison, Nebraska (Acosta, et al. v Tyson Foods, Inc. d.b.a Tyson Fresh Meats, Inc., D. Nebraska,
February 29, 2008), Perry and Waterloo, Iowa (Edwards, et al. v. Tyson Foods, Inc. d.b.a Tyson Fresh Meats, Inc., S.D. Iowa,
March 20, 2008); Council Bluffs, Iowa (Maxwell (f/k/a Salazar), et al. v. Tyson Foods, Inc. d.b.a Tyson Fresh Meats, Inc., S.D. Iowa,
April 29, 2008); Logansport, Indiana (Carter, et al. v. Tyson Foods, Inc. and Tyson Fresh Meats, Inc., N.D. Indiana, April 29, 2008);
and Goodlettsville, Tennessee (Abadeer v. Tyson Foods, Inc., and Tyson Fresh Meats, Inc., M.D. Tennessee, February 6, 2009). The
actions allege we failed to pay employees for all hours worked, including overtime compensation for the time it takes to change into
protective work uniforms, safety equipment and other sanitary and protective clothing worn by employees, and for walking to and
from the changing area, work areas and break areas in violation of the FLSA and analogous state laws. The plaintiffs seek back wages,
liquidated damages, pre- and post-judgment interest, attorneys’ fees and costs. Each case is proceeding in its jurisdiction.
• After a trial in the Garcia case, which involved the Garden City, Kansas facility, a jury verdict in favor of the plaintiffs was
entered on March 17, 2011. Exclusive of pre- and post-judgment interest, attorneys’ fees and costs, the jury found violations
of federal and state laws for pre- and post-shift work activities and awarded damages in the amount of $503,011. Plaintiffs’
counsel has filed an application for attorneys’ fees and expenses in the amount of $3,475,422, which we have contested. The
court stayed the filing of a notice of appeal pending its decision on plaintiffs' application for attorneys' fees and expenses.
• A jury trial was held in the Lopez case, which involved the Lexington, NE beef plant, and resulted in a jury verdict in favor
of Tyson. Judgment was entered and the complaint was dismissed with prejudice on May 26, 2011. Plaintiffs filed an appeal
with the Eighth Circuit Court of Appeals on June 16, 2011, and the appellate court affirmed the jury's verdict in favor of
Tyson on September 4, 2012.