3M 2010 Annual Report Download - page 115

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current and certain former salaried employees who worked in Missouri and other states other than Minnesota and
New Jersey. In 2007, a former employee filed an age discrimination charge against the Company with the U.S. Equal
Employment Opportunity Commission and the pertinent state agency in California, asserting claims on behalf of a
class of all current and certain former salaried employees who worked in California. In January 2009, two former
employees filed age discrimination charges against the Company with the U.S. Equal Employment Opportunity
Commission and the pertinent state agency in Minnesota. The filings include allegations that the release of claims
signed by certain former employees in the purported class defined in the charges is invalid for various reasons and
assert age discrimination claims on behalf of certain current and former salaried employees in states other than
Minnesota. The same law firm represents the plaintiffs in the Whitaker lawsuit as well as the claimants in each of
these EEOC proceedings.
In January 2011, 3M reached an agreement in principle with plaintiffs’ counsel to resolve the Whitaker and Garcia
lawsuits. The tentative agreement is subject to required court procedures and preparation of the necessary
documents and will be subject to court review and approval. 3M is currently in discussions with the Equal
Employment Opportunity Commission to resolve related charges described above. If finalized and approved by the
court, administration of the settlement agreements will take several months to complete. The amount of the proposed
settlements is not material to the Company’s consolidated results of operations or financial condition.
Compliance Matters
On November 12, 2009, the Company contacted the Department of Justice (DOJ) and Securities and Exchange
Commission (SEC) to voluntarily disclose that the Company was conducting an internal investigation as a result of
reports it received about its subsidiary in Turkey, alleging bid rigging and bribery and other inappropriate conduct in
connection with the supply of certain reflective and other materials and related services to Turkish government
entities. The Company also contacted certain affected government agencies in Turkey. The Company continues to
cooperate with the DOJ and SEC in the Company’s ongoing investigation of this matter. The Company retained
outside counsel to conduct an assessment of its policies, practices, and controls and to evaluate its overall
compliance with the Foreign Corrupt Practices Act, including an ongoing review of our practices in certain other
countries. The Company cannot predict at this time the outcome of its investigation or what regulatory actions may
be taken or what other consequences may result.
Other Matters
Commercial Litigation
In September 2010, various parties, on behalf of a purported class of shareholders of Cogent, Inc. (“Cogent”),
commenced three lawsuits against the Company, Cogent, and its directors in the Delaware Court of Chancery.
Plaintiffs allege that 3M, in connection with its tender offer for Cogent shares, aided and abetted the breach of
fiduciary duties by Cogent directors and seek an unspecified amount of damages. The three cases were
consolidated, expedited discovery was conducted, and Plaintiffs’ motion for a preliminary injunction to enjoin the
transaction was denied on October 1, 2010. On November 15, 2010, plaintiffs filed an amended complaint that added
directors of Cogent, Inc. appointed by 3M, as named defendants, and asserted additional claims of breach of
fiduciary duties in connection with the transaction and a subsequent offering period. The transaction closed on
December 1, 2010. The Company is defending this matter vigorously.
In September 2010, various parties, again on behalf of a purported class of Cogent shareholders, commenced six
lawsuits against the Company, Cogent and its directors in the Los Angeles Superior Court for the State of California
that contained similar claims that 3M had aided and abetted the breach of fiduciary duties by Cogent directors. The
parties have reached a resolution of these matters. A separate lawsuit was commenced in September 2010 by an
individual, again on behalf of a purported class of Cogent shareholders, against Cogent and its directors in the United
States District Court for the Central District of California that raised similar claims; plaintiff later filed an amended
complaint that also named the Company. The plaintiff has voluntarily dismissed that lawsuit.
Separately, several purported holders of Cogent shares, representing a total of approximately 5.8 million shares,
have asserted appraisal rights under Delaware law. The Company is defending this matter vigorously.
In October 2010, Avery Dennison filed a lawsuit against the Company in the United States District Court for the
Central District of California, alleging that 3M monopolized or attempted to monopolize the markets for Type XI
retroreflective sheeting and for broad high performance sheeting, both of which are used for highway signage, in
violation of the Sherman Act, as well as other claims. Avery alleges that 3M manipulated the standards setting
process of ASTM International, a private standards setting organization responsible for creating standards for