Aarons 2012 Annual Report Download - page 33

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23
FLSA when it automatically deducted 30 minutes from employees’ time for meal breaks on days when plaintiffs
allegedly did not take their meal breaks. Plaintiff claims he and other employees actually worked through meal breaks
or were interrupted during the course of their meal breaks and asked to perform work. As a result of the automatic
deduction, plaintiff alleges that the Company failed to account for all of his working hours when it calculated overtime,
and consequently underpaid him. On September 28, 2012, the Court issued an order granting conditional certification of
a class consisting of all hourly store employees from October 27, 2008 to the present. The current class size is 1,788,
which is less than seven percent of the potential class members. With limited exceptions, the time period for additional
members to be added to the class has expired.
The matter of Parish Harrigan and Carlos Urzua v. Aaron’s, Inc. was filed in the Superior Court of the State of
California, County of Sacramento on January 27, 2012 (Case No.: 34-2012-0117848). Plaintiffs allege that they were
subjected to jokes and name calling on the basis of their race and national origin. Plaintiffs further claim that they were
subject to retaliation after reporting the discrimination and harassment to the Company. The plaintiffs are seeking
damages in connection with the allegations. The Company denies the underlying allegations, believes that it took
prompt action to investigate the claims once it was notified of the allegations, denies that either plaintiff was subject to
retaliation and intends to vigorously defend itself in the litigation.
We believe we have meritorious defenses to all of the claims described above, and intend to vigorously defend against
the claims. However, these proceedings are still developing and due to the inherent uncertainty in litigation and similar
adversarial proceedings, there can be no guarantee that we will ultimately be successful in these proceedings, or in
others to which we are currently a party. Substantial losses from legal proceedings or the costs of defending them could
have a material adverse impact upon our business, financial position and results of operations.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.