Tyson Foods 2014 Annual Report Download - page 94

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.
There are nine pending lawsuits involving our beef and pork plants, in which certain present and past employees allege that we failed to
compensate them 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 Fair Labor Standards Act and various 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.
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• Garcia, et al. v. Tyson Foods, Inc., Tyson Fresh Meats, Inc., D. Kansas, May 15, 2006 - After a trial involving our Garden City,
Kansas beef plant, 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 filed an application for attorneys’ fees and expenses which we
contested. On December 7, 2012, the court granted plaintiffs' counsel's application and awarded a total of $3,609,723 . We appealed
the jury’s verdict and trial court’s award to the Tenth Circuit Court of Appeals. The appellate court affirmed the jury verdict and
judgment and subsequently denied our petition for rehearing.
• Bouaphakeo (f/k/a Sharp), et al. v. Tyson Foods, Inc., N.D. Iowa, February 6, 2007 - A jury trial was held involving our Storm Lake,
Iowa pork plant which resulted in a jury verdict in favor of the plaintiffs for violations of federal and state laws for pre- and post-shift
work activities. The trial court also awarded the plaintiffs liquidated damages, resulting in total damages awarded in the amount of
$5,784,758 . The plaintiffs' counsel has also filed an application for attorneys' fees and expenses in the amount of $2,692,145 . We
appealed the jury's verdict and trial court's award to the Eighth Circuit Court of Appeals. The appellate court affirmed the jury verdict
and judgment on August 25, 2014, and we filed a petition for rehearing on September 22, 2014.
• Guyton (f/k/a Robinson), et al. v. Tyson Foods, Inc., d.b.a Tyson Fresh Meats, Inc., S.D. Iowa, September 12, 2007 - A jury trial was
held involving our Columbus Junction, Iowa pork plant, which resulted in a jury verdict in favor of Tyson on April 25, 2012. The
plaintiffs have appealed to the Eighth Circuit Court of Appeals. Oral arguments were held on February 11, 2014. The appellate court
affirmed the jury verdict and judgment on August 25, 2014.
• Acosta, et al. v Tyson Foods, Inc. d.b.a Tyson Fresh Meats, Inc., D. Nebraska, February 29, 200 8 - A bench trial was held involving
our Madison, Nebraska pork plant, in January 2013. In May 2013 the trial court awarded the plaintiffs $5,733,943
for unpaid overtime
wages. Subsequently, the court ordered the class of plaintiffs expanded, and the plaintiffs submitted an updated calculation of
$6,258,330 for unpaid overtime wages as reflected by payroll data through May 2013. On January 30, 2014, the trial court entered
judgment in favor of the plaintiffs in the amount of
$18,774,989 , which represents a tripling of the plaintiffs’ alleged damages. The
court denied our post-trial motions, and we appealed to the Eighth Circuit Court of Appeals.
• Gomez, et al. v. Tyson Foods, Inc., D. Nebraska, January 16, 2008 - A jury trial involving our Dakota City, Nebraska beef plant, was
held, and the jury found in favor of the plaintiffs on April 3, 2013. On October 2, 2013, the trial court denied the parties’ post-trial
motions and entered judgment awarding unpaid overtime wages, liquidated damages, and penalties totaling $4,960,787 . We appealed
the jury’s verdict and trial court’s award to the Eighth Circuit Court of Appeals.
• Edwards, et al. v. Tyson Foods, Inc. d.b.a Tyson Fresh Meats, Inc., S.D. Iowa, March 20, 2008 - The trial court in this case, which
involves our Perry and Waterloo, Iowa pork plants, decertified the state law class and granted other pre-trial motions that resulted in
judgment in our favor with respect to the plaintiffs
’ claims. The plaintiffs have filed a motion to modify this judgment.
• Abadeer v. Tyson Foods, Inc., and Tyson Fresh Meats, Inc., M.D. Tennessee, February 6, 2009 - The trial court in the Abadeer case,
which involves our Goodlettsville, Tennessee case-ready beef and pork plant, granted the plaintiffs’ motion for summary judgment in
part, finding that certain pre- and post-shift activities were compensable and our non-payment for those activities was willful and not
in good faith. The parties subsequently agreed to settle all claims for $7,750,000 . The parties' joint motion for approval of settlement
was granted.
• Abdiaziz, et al. v. Tyson Foods, Inc., Tyson Fresh Meats, Inc., D. Kansas, September 30, 2011 - this case involves our Emporia,
Kansas beef plant, and was bifurcated from the case involving our Garden City, Kansas beef plant. It is stayed pending the resolution
of that matter.