Dollar General executives say the company could soon be the target of an Equal Employment Opportunities Commission lawsuit realted to its use of criminal background checks. The retail giant's recently filed quarterly report details that EEOC officials told the company last fall that its policy of running criminal checks during the hiring process may have an unfair effect on African-Americans and thus violate the Civil Rights Act. An attempt to talk things out earlier this year went nowhere.
The Company does not believe that this matter would be amenable to class or similar treatment; however, because at this time the Company cannot estimate or determine the form that any ultimate litigation would take, the size of any putative class or the damages or other recoveries that would be sought, it cannot estimate the potential exposure. If the matter were to proceed successfully as a class or similar action, it could have a material impact on the Company’s financial statements as a whole.
On a brighter legal note, the next paragraph in Dollar General's 10-Q details that a Florida judge last month dismissed competitor Winn-Dixie's claims for damages over a 2011 suit that said 55 Dollar General stores in Florida were violating Winn-Dixie's exclusive right to sell groceries in certain shopping strips. Dollar General needs to provide more info on sales at four of its stores and Winn-Dixie has appealed the court's damages ruling.