Note 12 - Commitments and Contingencies

6 Months Ended

Dec. 01, 2015

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Litigation

We are presently, and from time to time, subject to pending claims and lawsuits arising in the ordinary course of business. We provide reserves for such claims when payment is probable and estimable in accordance with GAAP. At this time, in the opinion of management, the ultimate resolution of pending legal proceedings, including the matter referred to below, will not have a material adverse effect on our operations, financial position, or cash flows.

On July 23, 2014, a case styled

Kimberly LaFrance, et al. v. Ruby Tuesday, Inc

., was filed against the Company in the State of New York Supreme Court, County of Onondaga on behalf of the plaintiff and all other similarly situated individuals.  The plaintiff alleged violations of certain wage notice requirements under New York law and sought wages, liquidated damages and attorneys’ fees.  The matter was removed to the United States District Court for the Northern District of New York.  On November 20, 2014, the Company filed a motion to dismiss, which was followed by motions filed by the plaintiff on December 29, 2014, for class certification, and on December 31, 2014, for partial summary judgment.  The parties agreed to mediate the case, and on March 5, 2015, the court stayed all deadlines in the matter pending the completion of mediation.  On August 5, 2015, the parties agreed to resolve the matter. The window for filing claims under the settlement agreement has closed, and the court has issued its final approval of the settlement.  The parties are now undertaking the final steps to conclude the matter, which may take several months to complete.  We believe that we have accrued an appropriate amount based on the agreement approved by the court.

On January 7, 2016, the court granted the motion for final approval of the settlement without modification. After a thirty-day appeals period runs without the filing of any appeals, and none are anticipated, the settlement agreement and the court’s final approval order will become effective, final, and binding. At that point, the Company has an obligation to fund the settlement per the terms of the settlement agreement. In connection with granting final approval of the settlement, the court also dismissed the case with prejudice on January 7, 2016.