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Donnelley Settles Lawsuits

May 2003
CHICAGO—R.R. Donnelley plans to settle several pending age and racial discrimination lawsuits for $21 million, according to its annual 10-K filings with the Securities & Exchange Commission. The litigation stems from 1993, after Donnelley closed The Lakeside Press, located here.

Older workers at the catalog facility sued the company on age discrimination grounds, claiming Donnelley had used the plant closing as a way to push workers into retirement. In addition, some younger workers filed another related suit, claiming that they did not receive the retirement and health benefits they deserved after the closing.

Then African American workers at the closed plant filed a race discrimination suit alleging that the company had treated them unfairly. The racial discrimination suit later grew to include black workers at some other Donnelley facilities around the country, who argued that Donnelley fostered an environment of racial discrimination and that the company had violated civil-rights laws.

The age discrimination case went to trial in the summer of 2002, and the jury deliberated only two hours before rejecting the workers' claims. However, the judge in the case found that the company had improperly calculated the benefits due them when the plant closed.

In fighting the lawsuits, Donnelley had argued that the workers in The Lakeside Press facility had waited too long before filing their claims and that the two-year statute of limitations had expired. The court ruled against Donnelley. Donnelley appealed that ruling, and last September the Seventh Circuit Court of Appeals sided with Donnelley. Unless the plant workers appeal to the U.S. Supreme Court and prevail, Donnelley notes in its SEC filing, the appeals court ruling will effectively bar them from proceeding with the case.

Yet, after winning in court on the age discrimination claims, Donnelley officials have decided that a settlement has become a more cost-effective option. Until now, Donnelley steadfastly refused to settle its worker disputes. To settle the pension and benefit issues covered by the two class-action suits, known as Gerlib and Jefferson vs. Donnelley, the printer and its retirement benefit plan will pay up a total of $15 million.

The remainder of the $21 million covers Donnelley's payment to settle the race discrimination claims of workers at Donnelley plants other than the Lakeside facility. Those workers will receive from $1,000 to $7,500 apiece.

Claims of the African American Lakeside workers, Donnelley told the SEC, remain unresolved because the statute of limitations issue hasn't been cleared up.
 

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