Dollar Tree 2007 Annual Report Download - page 42

they should have been classified as non-exempt
employees under both the California Labor Code and
the Fair Labor Standards Act. They filed the case as a
class action on behalf of California based store man-
agers. The Company responded with a motion to dis-
miss which the Court granted with respect to
allegations of fraud. The plaintiff then filed an amend-
ed complaint which has been answered by us. The
Company was thereafter served with a second suit in a
California state court which alleges essentially the
same claims as those contained in the federal action
and which likewise seeks class certification of all
California store managers. The Company has removed
the case to the same federal court as the first suit,
answered it and the two cases have been consolidated.
The Company will defend the plaintiffs’ anticipated
effort to seek class certification.
In 2007, the Company was served with a lawsuit
filed in federal court in California by two former
employees who allege they were not paid all wages
due and owing for time worked, that they were not
paid in a timely manner upon termination of their
employment and that they did not receive accurate
itemized wage statements. They filed the suit as a
class action and seek to include in the class all of the
Company’s former employees in the state of
California. The Company responded with a motion
to dismiss which the Court denied. The Company
answered and a motion for summary judgment on
the part of the Company is presently pending before
the Court.
The Company was recently served in federal court
in California with a Complaint, on behalf of a former
employee, alleging meal and rest break violations
among other causes of action, and seeking class action
status. The settlement Order entered by the Court in
the 2003 case referenced above included an injunction
against meal and rest break claims on the part of class
members which the Company believe include this
plaintiff. The Company will seek to stay this litigation
in accordance with that injunction.
The Company will vigorously defend itself in
these lawsuits. The Company does not believe that
any of these matters will, individually or in the aggre-
gate, have a material adverse effect on its business or
financial condition. The Company cannot give assur-
ance, however, that one or more of these lawsuits will
not have a material adverse effect on its results of
operations for the period in which they are resolved.
40
DOLLAR TREE, INC. • 2007 ANNUAL REPORT
Notes to Consolidated Financial Statements continued
the Court to certify classes for their various claims and
the presiding judge did so with respect to two classes,
but denied others. After a partly successful appeal by
the plaintiffs, one additional class has been certified.
The certified classes now include two for alleged viola-
tions of that state’s labor laws concerning rest breaks
and one related to untimely payments upon termina-
tion. Discovery is now on-going and no trial is antici-
pated before the latter part of 2008.
In 2006, the Company was served with a lawsuit
by a former employee in a California state court alleg-
ing that she was paid for wages with a check drawn on
a bank which did not have any branches in the state,
an alleged violation of the state’s labor code; that she
was paid less for her work than other similar employ-
ees with the same job title based on her gender; and
that she was not paid her final wages in a timely man-
ner, also an alleged violation of the labor code. The
plaintiff requested the Court to certify the case and
those claims as a class action. The parties have reached
a settlement and executed an Agreement by which the
named plaintiff individually settled her Equal Pay Act
and late payment claims. The Court accepted the pro-
posed settlement and certified a class for the check
claim. Notices have been mailed to class members and
a hearing for final approval of the settlement has been
scheduled for April 22, 2008. The estimated settle-
ment amount has been accrued in the accompanying
consolidated balance sheet as of February 2, 2008.
In 2006, the Company was served with a lawsuit
filed in federal court in the state of Alabama by a for-
mer store manager. She claims that she should have
been classified as a non-exempt employee under the
Fair Labor Standards Act and, therefore, should have
received overtime compensation and other benefits.
She filed the case as a collective action on behalf of
herself and all other employees (store managers) simi-
larly situated. Plaintiff sought and received from the
Court an Order allowing nationwide (except for the
state of California) notice to be sent to all store man-
agers employed by the Company now or within the
past three years. Such notice has been mailed and each
involved person will determine whether he or she
wishes to opt-in to the class as a plaintiff. The
Company intends at the appropriate time to challenge
the anticipated effort by the opt-in plaintiffs to be cer-
tified as a class.
In 2007, the Company was served with a lawsuit
filed in federal court in the state of California by one
present and one former store manager. They claim