Big Lots 2010 Annual Report Download - page 141

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 10 — Commitments, Contingencies and Legal Proceedings (Continued)
under federal law, class certification under state law and class notice. On May 14, we filed a memorandum in
opposition to plaintiff’s motion. On January 20, 2011, the Magistrate Judge issued a recommendation that the
Court deny the plaintiff’s motion. The plaintiff objected the Magistrate Judge’s recommendation, we responded
in opposition to the plaintiff’s objection, and we await the Court’s ruling. We intend to vigorously defend
ourselves against the allegations levied in this lawsuit. We cannot make a determination as to the probability
of a loss contingency resulting from this lawsuit or the estimated range of possible loss, if any; however, we
currently believe that such claims asserted in the New York matter, both individually and in the aggregate, will
be resolved without a material adverse effect on our financial condition, results of operations, or liquidity.
In September 2006, a class action complaint was filed against us in the Superior Court of California,
Los Angeles County, alleging that we violated certain California wage and hour laws by misclassifying
California store managers as exempt employees (“Seals matter”). The plaintiffs seek to recover, on their own
behalf and on behalf of all other individuals who are similarly situated, damages for alleged unpaid overtime,
unpaid minimum wages, wages not paid upon termination, improper wage statements, missed rest breaks,
missed meal periods, reimbursement of expenses, loss of unused vacation time, and attorneys’ fees and costs.
On October 29, 2009, the Court denied, with prejudice, plaintiffs’ class certification motion. On January 21,
2010, the plaintiffs filed a Notice of Appeal, and the parties will have an opportunity to brief their respective
positions in the coming months. On December 2, 2010, the California Court of Appeals notified the parties
that the case was fully briefed and that a hearing for oral argument will be scheduled. We cannot make a
determination as to the probability of a loss contingency resulting from this lawsuit 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 2010, a class action complaint was filed against us in the Superior Court of California, Los Angeles
County, alleging that we violated certain California wage and hour laws by misclassifying California store
managers as exempt employees (“Avitia matter”). The plaintiffs seek to recover damages for alleged unpaid
wages and overtime, untimely paid wages at separation, improper wage statements, and attorneys’ fees and
costs. In August 2010, the five plaintiffs named in the original complaint, which sought to recover damages on
their own behalf and on behalf of all other individuals who were similarly situated, filed an amended complaint
that removed the class and representative allegations and asserted only individual actions. We have answered
the amended complaint and are in the preliminary stages of discovery. The Avitia matter is related to and
overlaps the Seals matter. We cannot make a determination as to the probability of a loss contingency resulting
from the Avitia matter or the estimated range of possible loss, if any. We intend to vigorously defend ourselves
against the allegations levied in this lawsuit; however, we currently believe the Avitia matter will be resolved
without a material adverse effect on our financial condition, results of operations, and liquidity.
In February 2008, three alleged class action complaints were filed against us by a California resident (the
“Caron matters”). The first was filed in the Superior Court of California, Orange County. This action is
similar in nature to the Seals matter, which enabled us to successfully coordinate this matter with the Seals
matter in the Superior Court of California, Los Angeles County. The second and third matters, filed in the
United States District Court, Central District of California, and the Superior Court of California, Riverside
County, respectively, allege that we violated certain California wage and hour laws for missed meal and rest
periods and other wage and hour claims. The plaintiffs seek to recover, on their own behalf and on behalf of a
California statewide class consisting of all other individuals who are similarly situated, damages resulting from
improper wage statements, missed rest breaks, missed meal periods, non-payment of wages at termination,
reimbursement of expenses, loss of unused vacation time, and attorneys’ fees and costs. We believed these
two matters overlapped and we successfully consolidated the two cases before the United States District
Court, Central District of California. We believe the remaining allegations also overlap some portion of the
claims released through the class action settlement in the Espinosa matter, which was settled in 2008. On