Dollar General 2006 Annual Report Download - page 74

and financing obligations at February 2, 2007 and February 3, 2006, was $41.0 million and $70.5
million, respectively.
Rent expense under all operating leases is as follows:
(In thousands) 2006 2005 2004
Minimum rentals (a) $327,911 $295,061 $ 253,364
Contingent rentals 16,029 17,245 15,417
$343,940 $312,306 $ 268,781
(a) Excludes contract termination costs of $5.7 million recorded in association with the closing of 128 stores
in the fourth quarter of 2006
Legal proceedings
On March 14, 2002, a complaint was filed in the United States District Court for the
Northern District of Alabama (Edith Brown, on behalf of herself and others similarly situated v.
Dolgencorp, Inc., and Dollar General Corporation, CV02-C-0673-W (“Brown”)). Brown was a
collective action against the Company on behalf of current and former salaried store managers
claiming that these individuals were entitled to overtime pay and should not have been classified
as exempt employees under the Fair Labor Standards Act (“FLSA”). Plaintiffs sought to recover
overtime pay, liquidated damages, declaratory relief and attorneys’ fees.
On January 12, 2004, the court certified an opt-in class of plaintiffs consisting of all
persons employed by the Company as store managers at any time since March 14, 1999, who
regularly worked more than 50 hours per week and either: (1) customarily supervised less than
two employees at one time; (2) lacked authority to hire or discharge employees without
supervisor approval; or (3) sometimes worked in non-managerial positions at stores other than
the one he or she managed. The Company’ s request to appeal the certification decision on a
discretionary basis to the 11th U.S. Circuit Court of Appeals was denied.
Notice was sent to prospective class members and the deadline for individuals to opt in to
the lawsuit was May 31, 2004. Approximately 5,000 individuals opted in. Following the close of
discovery in April 2005, the Company filed several motions, including a motion to decertify the
class as a collective action. On March 31, 2006, the court denied the Company’ s motion to
decertify, but granted, either in whole or in part, certain other motions, thereby reducing the
number of class members to approximately 2,500. Trial of this matter began on July 31, 2006.
During the trial, on August 4, 2006, the court decertified the class. The Company reached a
settlement agreement with the twelve named plaintiffs in the case for an amount that was not
material to the Company’s financial statements, and the matter was dismissed as settled on
August 9, 2006.
On October 10, 2005, the Company was served with an additional lawsuit, Moldoon, et
al. v. Dolgencorp, Inc., et al. (Western District of Louisiana, Lake Charles Division, CV05-0852,
filed May 19, 2005), filed as a putative collective action in which five current or former store
managers claim to have been improperly classified as exempt executive employees under the
FLSA. Plaintiffs seek injunctive relief, back wages, liquidated damages and attorneys’ fees. On
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