Albertsons 2007 Annual Report Download - page 22

a
ny Retailer was struck at any or all of its Southern California facilities during the 2003-2004 labor dispute in
Sout
h
ern Ca
lif
orn
i
aw
h
en t
h
eot
h
er Reta
il
ers were not an
d
conta
i
ne
d
a prov
i
s
i
on
d
es
i
gne
d
to prevent t
h
eun
i
on
f
rom placin
g
disproportionate pressure on one or more Retailer b
y
picketin
g
such Retailer(s) but not the othe
r
R
etailer(s) during the labor dispute violate Section 1 of the Sherman Act. The lawsuit seeks declarative
,
i
n
j
unct
i
ve an
d
ot
h
er
l
ega
l
an
d
equ
i
ta
bl
ere
li
e
f
.T
h
e Reta
il
ers’ mot
i
on
f
or summary
j
u
d
gment was
d
en
i
e
d
o
n
Ma
y
26, 200
5
and the Retailers’ appeal of that decision was dismissed on November 29, 200
5
. On December 7
,
2006, the Attorney General’s motion for Summary Judgment was denied, and the Attorney General’s motion t
o
certify an appeal of the decision was denied on March 5, 2007. The Company continues to believe it has strong
d
efenses a
g
ainst this lawsuit and is vi
g
orousl
y
defendin
g
it. Althou
g
h this lawsuit is sub
j
ect to uncertaintie
s
inherent in the litigation process, based on the information presently available to the Company, management does
not expect t
h
at t
h
eu
l
t
i
mate reso
l
ut
i
on o
f
t
hi
s act
i
on w
ill h
ave a mater
i
a
l
a
d
verse e
ff
ect on t
h
e Company’s
f
inancial condition, results of o
p
erations or cash flows.
I
n Marc
h
2004, a
l
awsu
i
t see
ki
ng c
l
ass act
i
on status was
fil
e
d
aga
i
nst A
lb
ertsons
i
nt
h
e Super
i
or Court o
f
t
h
e
State of California in and for the Count
y
of Alameda, California (Dunbar v. Albertson’s, Inc.) b
y
a
g
rocer
y
manager seeking recovery including overtime pay based upon plaintiff’s allegation that he and other grocery
managers were improperly classified as exempt under California law. Class certification was denied in June 200
5
a
nd the Court
g
ranted plaintiffs’ motion to consolidate trial of approximatel
y
sixt
y
claims. The claims have bee
n
resolved and all com
p
laints dismissed.
I
nAu
g
ust 2004, Sall
y
Wilcox and Dennis Taber filed a complaint, later certified as a class action, in Californi
a
Superior Court in and for the County of San Diego, alleging that Albertson’s Inc. failed to pay wages for time
wor
k
e
dd
ur
i
ng mea
lb
rea
k
sto
i
ts non-exempt emp
l
oyees emp
l
oye
di
n
k
ey carr
i
er pos
i
t
i
ons. T
h
e
l
awsu
i
t
f
urt
h
e
r
a
lle
g
es that Albertson’s failed to provide itemized wa
g
e statements as required b
y
California law and that
Albertson’s failed to timely pay wages of terminated or resigned employees as required by California law. The
l
awsu
i
t
f
urt
h
er a
ll
eges a v
i
o
l
at
i
on o
f
t
h
eCa
lif
orn
i
aUn
f
a
i
r Compet
i
t
i
on Law, Bus
i
ness an
d
Pro
f
ess
i
ons Co
d
e
Section 17200 et seq. The lawsuit seeks recover
y
of all wa
g
es, compensation and/or penalties owed the member
s
o
f the class certified, including compensation of one hour of pay for rest or meal period violations and wages for
all
t
i
me wor
k
e
d
w
hil
e emp
l
oyees were c
l
oc
k
e
d
out
f
or mea
l
per
i
o
d
s or requ
i
re
d
to rema
i
nont
h
e prem
i
ses
d
ur
i
n
g
meal
p
eriods. The lawsuit further seeks to recover all
p
ast due com
p
ensation and
p
enalties for failure to
p
rovid
e
a
ccurate itemized wage statements and to pay all wages due at time of termination for members of the class
certified with interest from August
6
, 2000 to time of trial. The Company is vigorously defending this lawsuit.
Althou
g
h this lawsuit is sub
j
ect to the uncertainties inherent in the liti
g
ation process, based on the informatio
n
presently available to the Company, management does not expect that the ultimate resolution of this lawsuit will
h
ave a mater
i
a
l
a
d
verse e
ff
ect on t
h
e Company’s
fi
nanc
i
a
l
con
di
t
i
on, resu
l
ts o
f
operat
i
ons or cas
hfl
ows
.
On January 24, 2006, a class action complaint was filed in the Fourth Judicial District of the State of Idaho in an
d
f
or t
h
e County o
f
A
d
a, nam
i
ng A
lb
ertsons an
di
ts
di
rectors as
d
e
f
en
d
ants. T
h
e act
i
on (C
h
r
i
stop
h
er Carmona v.
H
enr
y
Br
y
ant et al., No. CV-OC 06012
5
1) challen
g
ed the a
g
reements entered into in connection with the serie
s
o
f transactions facilitating the sale of Albertsons to SUPERVALU, CVS Corporation and an investment group
l
ed by Cerberus Capital Management, L.P. On May 18, 200
6
, the defendants entered into a memorandum of
u
nderstandin
g
for a full settlement with the plaintiff. On December 13, 2006, the Court held a hearin
g
for final
a
pproval of the settlement, and on January 23, 2007, issued a Memorandum Decision and Order granting
a
pprova
l
. On Marc
h
9, 2007, t
h
e Court
i
ssue
d
aF
i
na
l
Ju
d
gment an
d
Or
d
er o
f
D
i
sm
i
ssa
l
w
i
t
h
Pre
j
u
di
ce.
T
he Company is also involved in routine legal proceedings incidental to its operations. Some of these routin
e
procee
di
ngs
i
nvo
l
ve c
l
ass a
ll
egat
i
ons, many o
f
w
hi
c
h
are u
l
t
i
mate
l
y
di
sm
i
sse
d
. Management
d
oes not expect t
h
at
the ultimate resolution of these le
g
al proceedin
g
s will have a material adverse effect on the Compan
y
’s financia
l
condition, results of o
p
erations or cash flows
.
T
he statements above reflect mana
g
ement’s current expectations based on the information presentl
y
available t
o
the Company. However, predicting the outcomes of claims and litigation and estimating related costs an
d
16