Red Lobster 2014 Annual Report Download - page 55

Notes to Consolidated Financial Statements
Darden
2014 Annual Report 53
In September 2012, a collective action under the Fair Labor Standards
Act was filed in the United States District Court for the Southern District of
Florida, Alequin v. Darden Restaurants, Inc., in which named plaintiffs claim
that the Company required or allowed certain employees at Olive Garden,
Red Lobster, LongHorn Steakhouse, Bahama Breeze and Seasons 52 to work
off the clock and required them to perform tasks unrelated to their tipped
duties while taking a tip credit against their hourly rate of pay. The plaintiffs
seek an unspecified amount of alleged back wages, liquidated damages, and
attorneys’ fees. In July 2013, the United States District Court for the Southern
District of Florida conditionally certified a nationwide class of servers and
bartenders who worked in the aforementioned restaurants at any point from
September 6, 2009 through September 6, 2012. Unlike a class action, a
collective action requires potential class members to “opt in” rather than
“opt out” following the issuance of a notice. Out of the approximately
217,000 opt-in notices distributed, 20,225 were returned. In June 2014,
the Company filed a motion seeking to have the class de-certified. We
believe that our wage and hour policies comply with the law and that we
have meritorious defenses to the substantive claims and strong defenses
supporting de-certification. An estimate of the possible loss, if any, or the
range of loss cannot be made at this stage of the proceeding.
In November, 2011, a lawsuit entitled ChHab v. Darden Restaurants, Inc.
was filed in the United States District Court for the Southern District of
New York alleging a collective action under the Fair Labor Standards Act and
a class action under the applicable New York state wage and hour statutes.
The named plaintiffs claim that the Company required or allowed certain
employees at The Capital Grille to work off the clock, share tips with indi-
viduals who polished silverware to assist the plaintiffs, and required the
plaintiffs to perform tasks unrelated to their tipped duties while taking a tip
credit against their hourly rate of pay. The plaintiffs seek an unspecified
amount of alleged back wages, liquidated damages, and attorneys’ fees.
In September 2013, the United States District Court for the Southern
District of New York conditionally certified a nationwide class for the Fair
Labor Standards Act claims only of tipped employees who worked in the
aforementioned restaurants at any point from November 17, 2008 through
September 19, 2013. Potential class members are required to “opt in” rather
than “opt out” following the issuance of a notice. Out of the approximately
3,200 opt-in notices distributed, 541 were returned. As with the Alequin
matter, the Company will have an opportunity to seek to have the class
de-certified and/or seek to have the case dismissed on its merits. We believe
that our wage and hour policies comply with the law and that we have
meritorious defenses to the substantive claims in this matter. An estimate
of the possible loss, if any, or the range of loss cannot be made at this stage
of the proceeding.
NOTE 20
SUBSEQUENT EVENT
On June 18, 2014, the Board of Directors declared a cash dividend of
$0.55 per share to be paid August 1, 2014 to all shareholders of record
as of the close of business on July 10, 2014.