Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies [Abstract]

14.	Commitments and Contingencies

Kelley v. Sensient Natural Ingredients LLC

Walters v. Sensient Natural Ingredients LLC

Sofia Rodriguez v. Sensient Natural Ingredients LLC and One Source Staffing Solutions, Inc.

On March 4, 2020, Monique Kelley filed a Class Action Complaint against SNI in Merced County Superior Court in California. Ms. Kelley worked at SNI for less than a week in 2017 through a temporary staffing company. Ms. Kelley has brought suit for purported violations of the California Labor Code and the California Business and Professions Code on her own behalf, and on behalf of all current and former California-based hourly-paid or non-exempt employees of SNI. Ms. Kelley specifically asserts claims for unpaid overtime wages, unpaid minimum wages, unpaid meal and rest break premiums, failure to timely pay final wages upon termination, non-compliant wage statements, and unreimbursed business expenses. Following motion practice, Ms. Kelley amended her original pleading, asserting the same causes of action, and SNI filed a responsive pleading. The parties then entered the discovery process.

On April 26, 2021, the same law firm representing Ms. Kelley filed an additional notice with the State of California of the intent to pursue a claim on a representative basis pursuant to the California Private Attorneys General Act of 2004 (PAGA). This notice was served on behalf of Patrick Walters, an employee of SNI. The notice states the intent to pursue relief on behalf of Mr. Walters as well as other alleged aggrieved employees, identified as all current and former hourly or non-exempt employees of SNI, whether hired directly or through staffing agencies. The notice alleges that SNI failed to properly pay Mr. Walters and the other alleged aggrieved employees for all hours worked, failed to properly provide or compensate minimum and overtime wages and for meal and rest breaks, failed to issue compliant wage statements, and failed to reimburse for all necessary business-related expenses, in violation of the California Labor Code and California Industrial Welfare Commission Orders. On July 30, 2021, Mr. Walters filed a Complaint in Merced County Superior Court asserting the claims set forth in his PAGA notice. SNI filed its Answer and Affirmative Defenses in response.

On June 10, 2021, Sofia Rodriguez filed notice with the State of California of the intent to pursue a claim on a representative basis pursuant to PAGA. The notice was served on behalf of Ms. Rodriguez, who worked at SNI through One Source Staffing Solutions, Inc. for five months in 2020. The notice states the intent to pursue relief on behalf of Ms. Rodriguez as well as other alleged aggrieved employees, identified as all non-exempt employees who worked for Defendants in the State of California, and who were paid on an hourly basis. The notice alleges that SNI failed to allow Ms. Rodriguez and the other alleged aggrieved employees to take statutorily required meal and rest periods. The notice further alleges that Defendants suffered and permitted Ms. Rodriguez and other alleged aggrieved employees to work off the clock, failed to pay for all hours worked, failed to properly provide or compensate for minimum and overtime wages, failed to issue compliant wage statements, and failed to pay wages owed upon termination of employment, in violation of the California Labor Code. Ms. Rodriguez also asserts that she was taken off the schedule and not returned to work after complaining about the alleged wage and hour violations set forth in the PAGA notice. On August 17, 2021, Ms. Rodriguez filed a Complaint in Stanislaus County Superior Court asserting the claims set forth in her PAGA notice. SNI filed its Answer and Affirmative Defenses in response.

Previously, SNI had agreed to attempt a joint mediation of the Kelley, Walters, and Rodriguez matters, which was scheduled for August 2022. Before the mediation occurred, however, on June 15, 2022, the United States Supreme Court issued its decision in Viking River Cruises, Inc. v. Moriana, 596 U.S. ___ (2022), in which the Court ruled that the Federal Arbitration Act requires enforcement of an arbitration agreement that waives an employee’s right to bring individual claims under PAGA, and that an individual with such an agreement to arbitrate does not have standing to pursue the remaining non-individual claims in Court. As a result of the decision, SNI withdrew its agreement to mediate.

In the Walters case, SNI has demanded that Walters submit his individual PAGA claims to arbitration in accordance with his arbitration agreement. Pending litigation in the California Supreme Court concerning the standing issue addressed in Viking River Cruises may result in a stay of the Walters case. In the Kelley and Rodriguez cases, SNI will seek to compel individual arbitration as to any claims made on behalf of individuals with arbitration agreements. In addition, in the Kelley matter, SNI intends to seek summary judgment based upon a prior adjudication, in which Kelley settled claims that she now asserts against SNI. In the Rodriguez case, SNI also intends to seek indemnification and contribution from the staffing firm that supplied the temporary workers in question.

SNI intends to vigorously defend its interests in the Kelley, Walters, and Rodriguez matters, absent a reasonable resolution. Based upon the legal developments and defenses described above, and the Viking River Cruises decision, we no longer believe these proceedings are material to the business or the financial condition of the Company nor do we expect the liabilities, if any, which may ultimately result from such lawsuits to have a material adverse effect on our consolidated financial statements.

Other Claims

The Company is subject to various claims and litigation arising in the normal course of business. The Company establishes reserves for claims and proceedings when it is probable that liabilities exist and reasonable estimates of loss can be made. While it is not possible to predict the outcome of these matters, based on our assessment of the facts and circumstances now known, we do not believe that these matters, individually or in the aggregate, will have a material adverse effect on our financial position. However, actual outcomes may be different from those expected and could have a material effect on our results of operations or cash flows in a particular period.

See Note 2, Divestitures, for information about estimated environmental remediation costs associated with our Granada, Spain location.