Walmart 2013 Annual Report Download - page 52

50 || Walmart 2013 Annual Report
10 Contingencies
Legal Proceedings
The Company is involved in a number of legal proceedings. The
Company has made accruals with respect to these matters, where
appropriate, which are re ected in the Company’s Consolidated Financial
Statements. For some matters, a liability is not probable or the amount
cannot be reasonably estimated and therefore an accrual has not been
made. However, where a liability is reasonably possible and material, such
matters have been disclosed. The Company may enter into discussions
regarding settlement of these matters, and may enter into settlement
agreements, if it believes settlement is in the best interest of the Company’s
shareholders. Unless stated otherwise, the matters, or groups of related
matters, discussed below, if decided adversely to or settled by the
Company, individually or in the aggregate, may result in a liability material
to the Company’s  nancial condition or results of operations.
Wage-and-Hour Class Action: The Company is a defendant in
Braun/Hummel v. Wal-Mart Stores, Inc., a class action lawsuit commenced in
March 2002 in the Court of Common Pleas in Philadelphia, Pennsylvania.
The plainti s allege that the Company failed to pay class members for all
hours worked and prevented class members from taking their full meal
and rest breaks. On October 13, 2006, a jury awarded back-pay damages
to the plainti s of approximately $78 million on their claims for o -
the-clock work and missed rest breaks. The jury found in favor of the
Company on the plainti s’ meal-period claims. On November 14, 2007,
the trial judge entered a  nal judgment in the approximate amount of
$188 million, which included the jury’s back-pay award plus statutory
penalties, prejudgment interest and attorneys’ fees. By operation of law,
post-judgment interest accrues on the judgment amount at the rate of
six percent per annum from the date of entry of the judgment, which
was November 14, 2007, until the judgment is paid, unless the judgment
is set aside on appeal. On December 7, 2007, the Company  led its Notice
of Appeal. The Company  led its opening appellate brief on February 17,
2009, plainti s  led their response brief on April 20, 2009, and the
Company  led its reply brief on June 5, 2009. Oral argument was held
before the Pennsylvania Superior Court of Appeals on August 19, 2009.
On June 10, 2011, the court issued an opinion upholding the trial court’s
certi cation of the class, the jury’s back pay award, and the awards of
statutory penalties and prejudgment interest, but reversing the award of
attorneys’ fees. On September 9, 2011, the Company  led a Petition for
Allowance of Appeal with the Pennsylvania Supreme Court. On July 2,
2012, the Pennsylvania Supreme Court granted the Company’s Petition.
The Company served its opening brief in the Pennsylvania Supreme
Court on October 22, 2012, plainti s served their response brief on January
22, 2013, and the Company served its reply on February 28, 2013. A date
for oral argument has not been scheduled by the Pennsylvania Supreme
Court. The Company believes it has substantial factual and legal defenses
to the claims at issue, and plans to continue pursuing appellate review.
Gender Discrimination Class Actions: The Company is a defendant
in Dukes v. Wal-Mart Stores, Inc., which was commenced as a class-action
lawsuit in June 2001 in the United States District Court for the Northern
District of California, asserting that the Company had engaged in a
pattern and practice of discriminating against women in promotions,
pay, training, and job assignments, and seeking, among other things,
injunctive relief, front pay, back pay, punitive damages, and attorneys’
fees. On June 21, 2004, the district court issued an order granting in part
and denying in part the plainti s’ motion for class certi cation. As
de ned by the district court, the class included “[a]ll women employed at
any Wal-Mart domestic retail store at any time since December 26, 1998,
who have been or may be subjected to Wal-Mart’s challenged pay and
management track promotions policies and practices.” The Company
appealed the order to the Ninth Circuit Court of Appeals and subsequently
to the United States Supreme Court. On June 20, 2011, the Supreme
Court issued an opinion decertifying the class and remanding the case
to the district court. On October 27, 2011, the plainti s’ attorneys  led an
amended complaint proposing a class of current and former female
associates at the Company’s California retail facilities, and the Company
 led a motion to dismiss on January 13, 2012. On September 21, 2012,
the court denied the motion. Under the current scheduling order, the
plainti s are required to  le their motion for class certi cation on or
before April 11, 2013.
On October 28, 2011, the attorneys for the plainti s in the Dukes case
 led a similar complaint in the United States District Court for the
Northern District of Texas entitled Odle v. Wal-Mart Stores, Inc., proposing
a class of current and former female associates employed in any Walmart
region that includes stores located in the state of Texas. On October 15,
2012, the court in the Odle case granted the Company’s motion to dismiss,
dismissing with prejudice the plainti s’ class-action allegations and the
individual claims of the lead plainti , Stephanie Odle. On October 2,
2012, the plainti s’ attorneys  led another similar complaint in the
United States District Court for the Middle District of Tennessee entitled
Phipps v. Wal-Mart Stores, Inc., proposing a class of current and former
female associates employed in “Region 43, centered in Middle and
Western Tennessee.” On February 20, 2013, the court in the Phipps case
granted the Company’s motion to dismiss, and dismissed the plainti s’
class action allegations with prejudice. On October 4, 2012, the plainti s’
attorneys  led another similar complaint in the United States District
Court for the Southern District of Florida, entitled Love v. Wal-Mart Stores,
Inc., proposing a class of current and former female associates employed
in certain designated stores and clubs in regions centered in the state of
Florida. On October 25, 2012, the Company  led a motion to dismiss the
Florida complaint. Finally, on February 20, 2013, the plainti s’ attorneys
 led another similar complaint in the United States District Court for
the Western District of Wisconsin, entitled Ladik v. Wal-Mart Stores, Inc.,
proposing a class of current and former female associates employed in
“Region 14, which includes Wal-Mart retail stores located in parts of
Wisconsin, Illinois, Indiana and Michigan.” On March 15, 2013, the Company
 led its motion to dismiss the Wisconsin complaint. Management does
not believe any possible loss or the range of any possible loss that may
be incurred in connection with these matters will be material to the
Company’s  nancial condition or results of operations.
Notes to Consolidated Financial Statements