February 10, 1995, a class action lawsuit, entitled Ryder, et al. v. Taco Bell Corp.
("Ryder"), was filed in the Superior Court of the State of Washington for King
County on behalf of approximately 16,000 current and former Taco Bell employees claiming
unpaid wages resulting from alleged uniform, rest and meal period violations and unpaid
overtime. In April 1996, the Court certified the class for purposes of injunctive relief
and a finding on the issue of liability. The trial was held during the first quarter of
1997 and resulted in a liability finding. In August 1997, the Court certified the class
for purposes of damages as well. Prior to the damages phase of the trial, the parties
reached a court-approved settlement process in April 1998.
We have provided for the
estimated costs of the Bravo and Ryder litigations, based on a projection of eligible
claims, the cost of each eligible claim and the estimated legal fees incurred by
plaintiffs. We believe the ultimate cost of the Bravo and Ryder cases in excess of the
amounts already provided will not be material to our annual results of operations,
financial condition, or cash flows.
Notes to Consolidated Financial Statements