HP 2011 Annual Report Download - page 152

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 18: Litigation and Contingencies (Continued)
obtain e-credits not to exceed $5 million in the aggregate for use in purchasing printers or printer
supplies through HP’s website. As part of the proposed settlement, HP also agreed to provide class
members with additional information regarding HP inkjet printer functionality and to change the
content of certain software and user guide messaging provided to users regarding the life of inkjet
printer cartridges. In addition, class counsel and the class representatives will be paid attorneys’ fees
and expenses and stipends. On March 29, 2011, the court granted final approval of the settlement. On
April 27, 2011, certain class members who objected to the settlement filed an appeal of the court’s
order granting final approval of the settlement.
Goldblatt v. HP is a consumer class action filed against HP on December 1, 2011 in the United
States District Court for the Northern District of California alleging that HP printers have a design
defect in the software installed on the printers which could allow hackers and unauthorized users to
gain access to the printers, steal personal and confidential information from consumers and otherwise
control and cause physical damage to the printers. The plaintiff also alleges that HP was aware of this
security vulnerability and failed to disclose it to consumers. The complaint seeks certification of a
nationwide class of purchasers of all HP printers and seeks unspecified damages, restitution, punitive
damages, injunctive relief, attorneys’ fees and costs.
Fair Labor Standards Act Litigation. HP is involved in several lawsuits in which the plaintiffs are
seeking unpaid overtime compensation and other damages based on allegations that various employees
of EDS or HP have been misclassified as exempt employees under the Fair Labor Standards Act and/or
in violation of the California Labor Code or other state laws. Those matters include the following:
•Cunningham and Cunningham, et al. v. Electronic Data Systems Corporation is a purported
collective action filed on May 10, 2006 in the U.S. District Court for the Southern District of
New York claiming that current and former EDS employees allegedly involved in installing
and/or maintaining computer software and hardware were misclassified as exempt employees.
Another purported collective action, Steavens, et al. v. Electronic Data Systems Corporation, which
was filed on October 23, 2007, is also now pending in the same court alleging similar facts. The
Steavens case has been consolidated for pretrial purposes with the Cunningham case. On
December 14, 2010, the court granted conditional certification of a class consisting of employees
in 20 legacy EDS job codes in the consolidated Cunningham and Steavens matter. Plaintiffs also
allege various state law class claims for misclassification, but plaintiffs have not yet sought class
certification for those.
•Heffelfinger, et al. v. Electronic Data Systems Corporation is a class action filed in November 2006
in California Superior Court claiming that certain EDS information technology workers in
California were misclassified as exempt employees. The case was subsequently transferred to the
U.S. District Court for the Central District of California, which, on January 7, 2008, certified a
class of information technology workers in California. On June 6, 2008, the court granted the
defendant’s motion for summary judgment. The plaintiffs subsequently filed an appeal with the
U.S. Court of Appeals for the Ninth Circuit. A hearing on the appeal was held in August 2011,
and the decision is pending. Two other purported class actions originally filed in California
Superior Court, Karlbom, et al. v. Electronic Data Systems Corporation, which was filed on
March 16, 2009, and George, et al. v. Electronic Data Systems Corporation, which was filed on
April 2, 2009, allege similar facts. The Karlbom case is pending in San Diego County Superior
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