Casey's Settles Suits

Retailer enters into settlement agreements regarding wage, hour lawsuits

ANKENY, Iowa -- Casey's General Stores Inc. said that it has entered into settlement agreements with plaintiffs in two alleged collective and class-action lawsuits pending in the U.S. District Court for the Southern District of Iowa. The two actions were brought by plaintiffs seeking to represent approximately 7,800 current and former assistant managers and approximately 76,000 current and former nonmanagement-level store employees with respect to wage and hour issues.

Under the settlement agreements, which are subject to court approval, the company has agreed to pay all [image-nocss] alleged plaintiffs, class members and their counsel in both actions, a total of $11.7 million, and up to an additional $400,000 in related settlement expenses. The company's directors and officers insurance company has agreed to pay $3 million of the settlement on behalf of all defendants.

As a result of the settlements and related expenses, the company expects to incur a onetime pretax charge of approximately $9.1 million in the fourth quarter of fiscal 2009, which will have an impact of approximately 12 cents on earnings per share.

"Resolving this costly and time-consuming litigation is in the best interest of the company and our hard-working and valued employees," said Robert Myers, CEO.

The first lawsuit, filed in U.S. District Court in Sioux City, Iowa, in May 2007, alleged that the company violated federal law by avoiding paying overtime. It seeks class-action status to compensate anyone who worked as an assistant manager during a three-year period prior to filing. Attorneys who filed the lawsuit on behalf of the two female managers claim there could be thousands of current and former assistant managers in the class. (Click here for previous CSP Daily News coverage.)

The second lawsuit, filed in U.S. District Court in Des Moines in January 2008, said Casey's wrongfully denied overtime pay and wages to current and former Casey's hourly employees. (Click here for previous coverage.)

The Ankeny, Iowa-based retailer runs 1,474 corporate stores in Iowa, Illinois, Indiana, Kansas, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin.