Damage claims in lawsuits against Pizza Hut paid by Tricon

March 14, 2002

LOUISVILLE, Ky. -- According to a March 12 SEC statement filed by Tricon Global Restaurants, the company paid out $15 million in damages to settle two separate lawsuits against its Pizza Hut chain.

Specific awards to each plaintiff are not known as the company stated in its filing that it had "provided for the costs of this settlement as unusual items."

On May 11, 1998, a class action lawsuit against Pizza Hut, Inc., and one of its franchisees, PacPizza, LLC, was filed in San Francisco by three former Pizza Hut restaurant general managers purporting to represent approximately 1,450 current and former California restaurant general managers of Pizza Hut and PacPizza, LLC. The suit alleged violations of wage and hour laws involving unpaid overtime wages and vacation pay.

Last May the parties reached an agreement to settle, and closed the case on Dec. 20.

In an unrelated suit originally filed in 1993, Chicago meat packer C&F Packing Co., Inc., alleged that Pizza Hut misappropriated trade secrets relating to C&F's process for manufacturing a precooked Italian sausage pizza topping. C&F's claims were originally dismissed by an Illinois trial court on statute of limitations grounds, but that ruling was later overturned by the U.S. Court of Appeals for the Federal Circuit in August of 2000.

The lawsuit was scheduled for trial in January, but the parties agreed to dismiss the case in exchange for a lump-sum payment.

Topics: Public Companies

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