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Contingencies
6 Months Ended
Jul. 01, 2011
Contingencies
Note 12: Contingencies

In July of 2008, the Company was served with a writ by a former client.  The writ did not articulate a claim.  The Company met with the former client in November of 2008 and again in January of 2009 and learned in those discussions of potential claims against the Company arising out of the testimony delivered by one of the Company’s employees.  The former client claims that this testimony contributed to an adverse verdict against them.  Given the uncertainty as to whether the claimant will choose to pursue one or more claims against the Company, and the nature of the potential claims against the Company, an estimated loss cannot be determined at this time.  The Company believes it has a strong defense against all such potential claims and intends to vigorously defend itself.  Further, the Company believes that some of the potential claims would be covered by insurance.  Although the Company’s ultimate liability in this matter (if any) cannot be determined, based upon information currently available, the Company believes, after consultation with legal counsel, the ultimate resolution of these potential claims will not have a material adverse effect on its financial condition, results of operations or liquidity.

In March of 2010, a lawsuit was filed against the Company which alleges, among other things, that the Company failed to provide rest and meal periods, failed to furnish accurate itemized wage statements, failed to keep accurate payroll records, incurred waiting time penalties, conducted unfair business practices and failed to comply with certain other California Labor Code requirements. In March of 2011, the Company entered into a preliminary agreement to settle these claims.  The financial impact of the preliminary settlement did not have a material effect on the Company’s financial condition, results of operations or liquidity.

In addition to the above matters, the Company is a party to various other legal actions from time to time and may be contingently liable in connection with claims and contracts arising in the normal course of business, the outcome of which the Company believes, after consultation with legal counsel, will not have a material adverse effect, individually or in the aggregate, on its financial condition, results of operations or liquidity.  All legal costs associated with litigation are expensed as incurred.