Albertsons 2007 Annual Report Download - page 21

I
TEM 3. LE
G
AL PR
OC
EEDIN
GS
Th
e Company
i
ssu
bj
ect to var
i
ous
l
awsu
i
ts, c
l
a
i
ms an
d
ot
h
er
l
ega
l
matters t
h
at ar
i
se
i
nt
h
eor
di
nary course o
f
con
d
uct
i
n
gb
us
i
ness,
i
nc
l
u
di
n
g
certa
i
n matters o
f
t
h
e Acqu
i
re
d
Operat
i
ons, none o
f
w
hi
c
h
,
i
n mana
g
ement’
s
o
pinion, is expected to have a material adverse impact on the Compan
y
’s financial condition, results of
o
perat
i
ons or cas
hfl
ows. Accrua
l
s
f
or certa
i
n pre-acqu
i
s
i
t
i
on
l
ega
l
cont
i
ngenc
i
es re
l
ate
d
to t
h
e Acqu
i
re
d
Operat
i
ons were
i
nc
l
u
d
e
di
n
li
a
bili
t
i
es assume
dd
ue to t
h
e Acqu
i
s
i
t
i
on. Certa
i
nc
h
an
g
es to accrua
l
sre
l
ate
d
to
pre-acquisition le
g
al contin
g
encies ma
y
be ad
j
usted throu
g
h purchase accountin
g
for up to one
y
ear from the dat
e
of
Acqu
i
s
i
t
i
on.
I
n Apr
il
2000, a c
l
ass act
i
on comp
l
a
i
nt was
fil
e
d
aga
i
nst A
lb
ertsons, Inc., as we
ll
as Amer
i
can Stores Company,
American Dru
g
Stores, Inc., Sav-on Dru
g
Stores, Inc. and Luck
y
Stores, Inc., wholl
y
-owned subsidiaries o
f
Albertsons, Inc., in the Superior Court for the County of Los Angeles, California (Gardner, et al. v. America
n
Stores Company, et a
l
.)
b
y ass
i
stant managers see
ki
ng recovery o
f
overt
i
me
b
ase
d
on p
l
a
i
nt
iff
s’ a
ll
egat
i
on t
h
at
the
y
were improperl
y
classified as exempt under California law. In Ma
y
2001, the court certified a class wit
h
respect to Sav-on Drug Stores assistant managers. A case with very similar claims, involving the Sav-on Dru
g
Stores ass
i
stant managers an
d
operat
i
ng managers, was a
l
so
fil
e
di
n Apr
il
2000 aga
i
nst A
lb
ertsons, Inc.’s
subsidiar
y
Sav-on Dru
g
Stores, Inc. in the Superior Court for the Count
y
of Los An
g
eles, California (Rocher
,
Dahlin, et al. v. Sav-on Drug Stores, Inc.), and was certified as a class action in June 2001 with respect to
a
ss
i
stant managers an
d
operat
i
ng managers. T
h
e two cases were conso
lid
ate
di
n Decem
b
er 2001. Ne
w
Albertsons, Inc. was added as a named defendant in November 2006. Plaintiffs seek overtime wa
g
es, meal an
d
rest break penalties, other statutory penalties, punitive damages, interest, injunctive relief, and attorneys’ fees an
d
costs. T
h
e Company
i
sv
i
gorous
l
y
d
e
f
en
di
ng t
hi
s
l
awsu
i
t. A
l
t
h
oug
h
t
hi
s
l
awsu
i
t
i
ssu
bj
ect to t
h
e uncerta
i
nt
i
e
s
inherent in the liti
g
ation process, based on the information presentl
y
available to the Compan
y
, mana
g
ement does
not expect that the ultimate resolution of this lawsuit will have a material adverse effect on the Company’s
fi
nanc
i
a
l
con
di
t
i
on, resu
l
ts o
f
operat
i
ons or cas
hfl
ows.
I
n Septem
b
er 2000, an agreement was reac
h
e
d
an
d
court approva
l
grante
d
to sett
l
e ten purporte
d
c
l
ass o
r
collective actions that were consolidated in March 1996 in the United States District Court in Boise, Idaho
(Barton et a
l
.v.A
lb
ertson’s, Inc.) an
d
w
hi
c
h
ra
i
se
d
var
i
ous
i
ssues
i
nc
l
u
di
ng “o
ff
-t
h
e-c
l
oc
k
” wor
k
a
ll
egat
i
ons an
d
all
egat
i
ons regar
di
ng certa
i
nsa
l
ar
i
e
d
grocery managers’ exempt status. Un
d
er t
h
e sett
l
ement agreement, curren
t
a
nd former emplo
y
ees who met eli
g
ibilit
y
criteria have been allowed to present their off-the-clock work claims to
a
c
l
a
i
ms a
d
m
i
n
i
strator. A
ddi
t
i
ona
ll
y, current an
df
ormer grocery managers emp
l
oye
di
nt
h
e State o
f
Ca
lif
orn
i
a
h
ave
b
een a
ll
owe
d
to present t
h
e
i
r exempt status c
l
a
i
ms to a c
l
a
i
ms a
d
m
i
n
i
strator. T
h
ec
l
a
i
ms a
d
m
i
n
i
strator
h
a
s
a
ssi
g
ned values to claims. The value of these claims can be challen
g
ed b
y
either part
y
. The parties have a
g
reed to
reso
l
ve a
ll
outstan
di
ng c
l
a
i
ms an
d
t
h
e Court grante
dfi
na
l
approva
l
o
f
t
h
at agreement on Marc
h
22, 2007.
Management
d
oes not
b
e
li
eve t
h
at t
h
e sett
l
ement w
ill h
ave a mater
i
a
l
a
d
verse e
ff
ect on t
h
e Company’s
fi
nanc
i
a
l
condition, results of o
p
erations or cash flows
.
On October 13, 2000, a complaint was filed in Los An
g
eles Count
y
Superior Court (Joanne Ka
y
Ward et al. v
.
A
lb
ertson’s, Inc. et a
l
.) a
ll
eg
i
ng t
h
at A
lb
ertsons, Luc
k
y Stores an
d
Sav-on Drug Stores prov
id
e
d
term
i
nat
i
n
g
emplo
y
ees their final pa
y
checks in an untimel
y
manner. The lawsuit seeks statutor
y
penalties. On Januar
y
4,
200
5
, the case was certified as a class action. The Compan
y
is vi
g
orousl
y
defendin
g
this lawsuit. Althou
g
h this
l
awsu
i
t
i
ssu
bj
ect to t
h
e uncerta
i
nt
i
es
i
n
h
erent
i
nt
h
e
li
t
i
gat
i
on process,
b
ase
d
on t
h
e
i
n
f
ormat
i
on present
l
y
a
vailable to the Compan
y
, mana
g
ement does not expect that the ultimate resolution of this lawsuit will have
a
material adverse effect on the Compan
y
’s financial condition, results of operations or cash flows
.
On February 2, 2004, the Attorney General for the State of California filed an action in Los Angeles federal court
(Ca
lif
orn
i
a, ex re
l
Loc
k
yer v. Sa
f
eway, Inc.
db
a Vons, a Sa
f
eway Company, A
lb
ertson’s, Inc. an
d
Ra
l
p
h
s
Grocer
y
Compan
y
, a division of The Kro
g
er Co., United States District Court Central District of California, Case
No. CV04-0687) claiming that certain provisions of the agreements (the “Labor Dispute Agreements”) betwee
n
A
lb
ertsons, T
h
e Kroger Co. an
d
Sa
f
eway Inc. (t
h
e “Reta
il
ers”), w
hi
c
h
prov
id
e
df
or “
l
oc
k
-outs”
i
nt
h
e event t
h
a
t
15