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Commitments and Contingencies
12 Months Ended
Feb. 02, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]

Note 12. Commitments and Contingencies


Legal Proceedings


The Company is subject to legal proceedings and claims that have arisen in the ordinary course of its business and have not been finally adjudicated. Although there can be no assurance as to the ultimate disposition of these matters, it is management’s opinion, based upon the information available at this time, that the expected outcome of these matters, individually and in the aggregate, will not have a material adverse effect on the results of operations and financial condition of the Company.


Loyalty Memberships and Magazine Subscriptions Class Action


On November 14, 2018, three consumers filed a putative class action complaint against Trans World Entertainment Corporation and Synapse Group, Inc. in the United States District Court for the District of Massachusetts Boston Division (Case No.1:18-cv-12377-DPW) concerning enrollment in the Company’s Backstage Pass VIP loyalty program and associated magazine subscriptions. The complaint alleges, among other things, that the Company’s “negative option marketing” misled consumers into enrolling for membership and subscriptions without obtaining the consumers’ consent. The complaint seeks statutory and actual damages.


The Company has filed a motion to dismiss the case which remains pending; however the court has already dismissed the plaintiffs’ only claim under federal law. The court has not yet decided the rest of the motion, but has indicated its preliminary agreement with significant portions of that motion, including that the case should not be able to proceed as a class action. The Company believes it has meritorious defenses to the plaintiffs’ claims and, if the court does not grant the Company’s motion to dismiss in full, the Company intends to vigorously defend the action.


Store Manager Class Actions


There are two pending class actions. The first, Spack v. Trans World Entertainment Corp. was originally filed in the District of New Jersey, April 2017 (the “Spack Action”). The Spack Action alleges that Trans World misclassified Store Managers as exempt nationwide. It also alleges violations of New Jersey and Pennsylvania State Law with respect to the Trans World’s use of the fluctuating workweek method to pay Senior Assistant Managers at stores located in those two states, and that managers and assistant managers worked “off-the-clock.” The second, Roper v. Trans World Entertainment Corp., was filed in the Northern District of New York, May 2017 (the “Roper Action”). The Roper Action also asserts a nationwide misclassification claim on behalf of Store Managers. Both actions were consolidated into the Northern District of New York, with the Spack Action being the lead case.


Plaintiffs moved for conditional certification, June 2018 and partially granted in January 2019. The opt-in period for the collective that was certified closed on April 6, 2019. Once the scope of the conditionally certified collective is known, opt-in discovery relating to that collective will commence. Company plans to move to decertify that collective.