Company Claims One-Man Carpool

Tuesday, June 19, 2012

The folks who run 99 Cents Only Stores have always relied on humor—advertising being open 9 days a week, celebrating the 99th birthday of famous people, briefly selling television sets for 99 cents—to help move merchandise and brand their stores as the spunky little guy taking on the mega-retailers.

But the South Coast Air Quality Management District prosecutors probably weren’t laughing when they accused the Commerce store of abusing a commuter-reduction program by submitting a “carpool” log for one solitary worker as evidence that it was reducing vehicle emissions. The district’s suit, filed in Superior Court last week, alleged that the company turned in a carpool log and payroll register in June 2009 for one employee covering a two-month period and failed to implement any strategies for a commuting-reduction program for a business with 250 or more employees. 

The district is asking for a $10,000-per-day penalty for each violation of its On-Road Motor Vehicle Mitigation Options rule and two sections of the Health and Safety Code.

The chain promotes car pooling on its website as part of the annual Earth Day celebration: “If you can’t think of ways of helping our planet, here’s an easy tip you can follow to go green: carpool.”   

It’s not the first time 99 Cents Only Stores got some flack for suspiciously sly moves. Two years ago, the company was hit with two class-action suits alleging unfair and deceptive business practices and misleading advertising when it raised the price of some items to 99.9 cents, which was effectively $1. The chain, which mostly operates in California but has stores in Texas, Arizona and Nevada, announced the price increase to address an anemic bottom line and estimated it would bring in $12 million annually. The suits have not been successful.

The family-run company was purchased in January 2012 by Los Angeles private equity firm Ares Management and the Canada Pension Plan Investment Board in a $1.6 billion buyout.    

-Ken Broder

To Learn More:

A One-Man Carpool, Hey? (by Matt Reynolds, Courthouse News)

99 Cents Only Stores Sued over Price Increase (by Andrea Chang, Los Angeles Times)

99 Cents Only Stores Agrees to $1.6-Billion Buyout (by Andrea Chang and Shan Li, Los Angeles Times)

Leave a comment