Big Lots 2010 Annual Report Download - page 140

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 10 — Commitments, Contingencies and Legal Proceedings
In November 2004, a civil collective action complaint was filed against us in the United States District Court
for the Eastern District of Louisiana, alleging that we violated the Fair Labor Standards Act by misclassifying
assistant store managers as exempt employees (“Louisiana matter”). The plaintiffs sought to recover, on behalf
of themselves and all other individuals who are similarly situated, alleged unpaid overtime compensation, as
well as liquidated damages, attorneys’ fees and costs. On July 5, 2005, the Court issued an order conditionally
certifying a class of all then-current and former assistant store managers who worked for us since November 23,
2001. As a result of that order, notice of the lawsuit was sent to approximately 5,500 individuals who had the
right to opt-in to the Louisiana matter. Approximately 1,100 individuals opted to join the Louisiana matter. We
filed a motion to decertify the class and the motion was denied on August 24, 2007. The trial began on May 7,
2008 and concluded on May 15, 2008. On June 20, 2008, the Court issued an order decertifying the action
and dismissed, without prejudice, the claims of the opt-in plaintiffs. After this ruling, four plaintiffs remained
before the Court. On January 26, 2009, three of the plaintiffs presented their respective cases before the Court.
Since then, the claims of one of the plaintiffs in the January 2009 action and the fourth plaintiff (who did not
participate in the January 2009 action) were dismissed with prejudice. On April 2, 2009, the Court awarded
the two remaining plaintiffs an aggregate amount of approximately $0.1 million plus attorneys’ fees and costs,
which, on June 25, 2009, were determined to be $0.4 million. We appealed both of these decisions. Subsequent
to the Court’s April 2, 2009 decision, approximately 172 of the opt-in plaintiffs filed individual actions in the
Court. On August 13, 2009, we filed a writ of mandamus challenging the Court’s jurisdiction to hear these
cases. This writ was denied on October 20, 2009. On January 12, 2010, the Louisiana matter was preliminarily
settled for $4.0 million, and on June 29, 2010, the Court conditionally approved the settlement. Following
additional administrative processing, all settled cases will be dismissed with prejudice. As of August 24, 2010,
we had received executed releases from all but one of the 172 plaintiffs. Unless and until an executed release is
received, that plaintiff’s case will not be dismissed and we will not pay a settlement amount to that plaintiff.
In June 2010, a civil collective action complaint was filed against us in the United States District Court for
the Northern District of Illinois, alleging that we violated the Fair Labor Standards Act by misclassifying
assistant store managers as exempt employees (“Gromek matter”). The plaintiffs sought to recover, on behalf of
themselves and all other individuals who were similarly situated, alleged unpaid overtime compensation, as well
as liquidated damages, interest, attorneys’ fees and costs. We answered the plaintiffs’ complaint on August 12,
2010. On October 15, 2010, the plaintiffs filed a motion requesting that the Court 1) conditionally certify a
class of then-current and former assistant store managers employed during the prior three years, excluding
those employed in California or New York, and 2) authorize the plaintiffs to send a notice of this lawsuit to
those putative class members to allow them to join this lawsuit. We have opposed the plaintiffs’ motion. On
December 17, 2010, the Court denied the plaintiffs’ motion. On February 11, 2011, we filed a motion to sever
the plaintiffs’ claims and transfer those claims to various venues around the country. On February 22, 2011, the
Court denied our motion without prejudice and granted limited discovery. We are in the preliminary stages of
discovery. The Gromek matter is similar in nature to the Louisiana matter. We cannot make a determination
as to the probability of a loss contingency resulting from the Gromek matter or the estimated range of possible
loss, if any. We intend to vigorously defend ourselves against the allegations levied in this lawsuit; however,
the ultimate resolution of this matter could have a material adverse effect on our financial condition, results of
operations, and liquidity.
In April 2009, a civil collective action complaint was filed against us in the United States District Court for
the Western District of New York, alleging that we violated the Fair Labor Standards Act by misclassifying
assistant store managers as exempt employees (“New York matter”). In addition, the plaintiff seeks class action
treatment under New York law relating to those assistant store managers working in the State of New York.
The plaintiff seeks to recover, on behalf of himself and all other individuals who are similarly situated, alleged
unpaid overtime compensation, as well as liquidated damages, attorneys’ fees and costs. On January 21, 2010,
a stipulation was filed and order rendered limiting this action to current and former assistant store managers
working in our New York stores. On March 2, 2010, plaintiff filed a motion for conditional class certification