Rite Aid 2012 Annual Report Download - page 23

Item 3. Legal Proceedings
While we cannot predict with certainty the timing or outcome of the legal matters described below,
we do not believe that any of these matters will have a material effect on our business or financial
condition. We cannot give assurance, however, that an unfavorable outcome in one or more of these
matters will not have a material effect on our results of operations for the period in which they are
resolved.
We are currently a defendant in several putative collective or class action lawsuits filed in federal
or state courts in several states, including Pennsylvania, New Jersey, New York, Maryland,
Massachusetts, Maine, New Hampshire, Washington and Oregon, purportedly on behalf of, in some
cases (i) current and former assistant store managers and co-managers or (ii) current and former store
managers and assistant store managers, respectively, working in the our stores at various locations. The
lawsuits allege violations of the Fair Labor Standards Act and of certain state wage and hour statutes.
The lawsuits seek various combinations of unpaid compensation (including overtime compensation),
liquidated damages, exemplary damages, pre-and post-judgment interest as well as attorneys’ fees and
costs. In one of the cases, Craig et al v. Rite Aid Corporation et al, pending in the United States District
Court for the Middle District of Pennsylvania, brought on behalf of current and former assistant store
managers, the Court, on December 9, 2009, conditionally certified a nationwide collective group of
individuals who worked for us as assistant store managers since December 9, 2006. Notice of the Craig
action was sent to the purported members of the collective group (approximately 6,700 current and
former assistant store managers) and approximately 1,100 joined the Craig action. We have filed a
motion to decertify the class which is presently pending. In another of the cases, Indergit v. Rite Aid
Corporation et al, pending in the United States District Court for the Southern District of New York,
brought on behalf of current and former store managers, the Court, on April 2, 2010, conditionally
certified a nationwide collective group of individuals who worked for the Company as store managers
since March 31, 2007. The Court ordered that Notice of the Indergit action be sent to the purported
members of the collective group (approximately 7,000 current and former store managers) and
approximately 1,550 joined the Indergit action. In another of the cases, Ibea v. Rite Aid Corporation et
al, pending in the United States District Court for the Southern District of New York, brought on
behalf of former salaried co-managers, the Court, on January 9, 2012, conditionally certified a collective
group of individuals who worked for us as salaried co-managers. The Court ordered that Notice of the
Ibea action be sent to the purported members of the collective group (approximately 650 former
salaried co-managers) and approximately 140 joined the Ibea action. At this time, we are not able to
predict the outcome of these lawsuits, or any possible monetary exposure associated with the lawsuits.
Our management believes, however, that the lawsuits are without merit and not appropriate for
collective or class action treatment. We are vigorously defending all of these claims.
We are currently a defendant in several putative class action lawsuits filed in state courts in
California alleging violations of California wage and hour laws, rules and regulations pertaining
primarily to pay for missed meals and rest periods and failure to provide employee seating. These suits
purport to be class actions and seek substantial damages. At this time, we are not able to predict the
outcome of these lawsuits, or any possible monetary exposure associated with the lawsuits. Our
management believes, however, that the plaintiffs’ allegations are without merit and that their claims
are not appropriate for class action treatment. We are vigorously defending all of these claims.
We were served with a United States Department of Health and Human Services Office of the
Inspector General (‘‘OIG’’) subpoena dated March 5, 2010 in connection with an investigation being
conducted by the OIG, the United States Attorney’s Office for the Central District of California and
the United States Department of Justice Commercial Litigation Branch. The subpoena requests records
related to any gift card or similar programs for customers who transferred prescriptions for drugs or
medicines to our pharmacies, and whether any customers who receive federally funded prescription
benefits (e.g. Medicare and Medicaid) may have benefited from those programs. We are in the process
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