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Note 17 - Contingencies
12 Months Ended
Dec. 30, 2012
Legal Matters and Contingencies [Text Block]
17. Contingencies

The Company has received final court approval of the settlement of a single class action, Fuller v. Kelly Services, Inc. and Kelly Home Care Services, Inc., in the Superior Court of California, Los Angeles, which involved a claim for monetary damages by current and former temporary employees in the State of California.  The claims were related to alleged misclassification of personal attendants as exempt and not entitled to overtime compensation under state law and alleged technical violations of a state law governing the content of employee pay stubs.  During 2011, a $1.2 million after tax charge relating to the settlement was recognized in discontinued operations.  During the first quarter of 2012, we reduced our estimate of the costs to settle the litigation by $0.4 million after tax, which we recorded in discontinued operations.

The Company is continuously engaged in litigation arising in the ordinary course of its business, typically matters alleging employment discrimination, alleging wage and hour violations or enforcing the restrictive covenants in the Company’s employment agreements.  While there is no expectation that any of these matters will have a material adverse effect on the Company’s results of operations, financial position or cash flows, litigation is always subject to inherent uncertainty and the Company is not able to reasonably predict if any matter will be resolved in a manner that is materially adverse to the Company.  The accrual for litigation costs at year-end 2012 and 2011 amounted to $3.1 million and $4.5 million, respectively, and is included in accounts payable and accrued liabilities on the consolidated balance sheet.

The Company is undergoing unclaimed property examinations by Delaware, its state of incorporation, and five other states.  Types of property under exam include payroll and accounts payable checks and accounts receivable credits.  Generally, unclaimed property must be reported and remitted to the state of the rightful owner.  In cases where the rightful owner cannot be identified, the property must be reported and remitted to the holder’s state of incorporation.  Delaware has substantially completed the payroll and accounts payable portions of its exam, which covers years dating back to 1981, and has preliminarily calculated a potential liability of $3 million.  While the outcome of these examinations is uncertain, we believe the Company has meritorious positions against Delaware’s preliminary calculation of potential liability and will continue to vigorously defend the Company.