Dollar Tree 2011 Annual Report Download - page 42

Contingencies
In 2006, a former store manager filed a collective action
against the Company in Alabama federal court. She
claims that she and other store managers should have
been classified as non-exempt employees under the Fair
Labor Standards Act and received overtime compensa-
tion. e Court preliminarily allowed nationwide (except
California) certification. At present, approximately 265
individuals are included in the collective action. e
Company’s motion to decertify the collective action was
dismissed without prejudice in 2010. e Company filed
another motion to decertify on February 29, 2012. ere
is no scheduled trial date.
In 2009, 34 plaintiffs, filed a class action Complaint
in a federal court in Virginia, alleging gender pay and
promotion discrimination under Title VII. In 2010, the
case was dismissed with prejudice. Plaintiffs appealed
to the U.S. Court of Appeals for the Fourth Circuit.
e appeal has been fully briefed by the parties and oral
arguments were conducted in January 2012. e parties
await a decision of the appellate court which is expected
by late spring or summer of 2012.
In April 2011, a former assistant store manager, on
behalf of himself and those similarly situated, instituted
a class action in a California state court primarily alleging
a failure by the Company to provide meal breaks, to
compensate for all hours worked, and to pay overtime
compensation. e Company removed the case to federal
court which denied Plaintiffs’ motion for remand of the
case to state court. e case presently awaits a scheduling
order. ere is no trial date.
In June 2011, Winn-Dixie Stores, Inc. and various
of its affiliates instituted suit in federal court in Florida
alleging that the Company, in approximately 48 shopping
centers in the state of Florida and five other states where
Dollar Tree and Winn-Dixie are both tenants, is selling
goods and products in Dollar Tree stores in violation of
an exclusive right of Winn-Dixie to sell and distribute
such items. It seeks both monetary damages and injunc-
tive relief. At approximately the same time, Winn-Dixie
also sued Dollar General, Inc. and Big Lots, Inc. making
essentially the same allegations against them and seeking
the same relief. e court consolidated the three cases
and they are set for trial on May 7, 2012.
In the summer and fall of 2011 collective action
lawsuits were filed against the Company in six federal
courts by different assistant store managers, each alleging
he or she was forced to work off the clock in violation
of the Fair Labor Standards Act. e suits were filed
in Georgia, Colorado, Florida, Michigan, Illinois, and
Maryland. e Maryland case has since been dismissed.
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Related Parties
e Company leased properties for six of its stores from
partnerships owned by related parties. e total rental
payments related to these leases were $0.5 million for
each of the years ended January 28, 2012, January 29,
2011, and January 30, 2010, respectively. Total future
commitments under the five remaining related party
leases are $1.7 million.
Freight Services
e Company has contracted outbound freight services
from various contract carriers with contracts expiring
through fiscal 2014. e total amount of these commit-
ments is approximately $222.3 million, of which approxi-
mately $143.3 million is committed in 2012, $58.6
million in 2013 and $20.4 million is committed in 2014.
Technology Assets
e Company has commitments totaling approximately
$8.9 million to purchase primarily store technology
assets for its stores during 2012.
Telecom Contracts
e Company has contracted for telecommunication
services with contracts expiring in 2014. e total amount
of these commitments is approximately $3.3 million.
Letters of Credit
e Company is a party to two Letter of Credit
Reimbursement and Security Agreements providing
$110.0 million and $75.0 million, respectively for letters
of credit. Letters of credit under both of these agree-
ments are generally issued for the routine purchase of
imported merchandise and approximately $139.5 million
was committed to these letters of credit at January 28,
2012. As discussed in Note 5, the Company also has
$150.0 million of available letters of credit included in
the $550.0 million Unsecured Credit Agreement (the
Agreement) entered into in 2008. As of January 28,
2012, there were no letters of credit committed under the
Agreement.
e Company also has approximately $28.7 million
in stand-by letters of credit that serve as collateral for its
self-insurance programs and expire in fiscal 2012.
Surety Bonds
e Company has issued various surety bonds that
primarily serve as collateral for utility payments at the
Company’s stores. e total amount of the commitment
is approximately $2.5 million, which is committed
through various dates through fiscal 2013.
40 Dollar Tree, Inc.