The NewStandard ceased publishing on April 27, 2007.

Grocery Giant Agrees to Pay Workers Backpay

by Catherine Komp

Oct. 18, 2006 – A US District judge has accepted a guilty plea from a California grocery store chain for felony charges of illegally rehiring hundreds of workers that management locked-out during a labor dispute.

Under the deal, Ralphs Grocery Company will pay $50 million into a fund to reimburse workers and their union, and another $20 million to the government in fines.

US Assistant Attorney Adam Braun said this is the first time workers will receive back pay as the result of a criminal settlement. Braun also told The NewStandard that the case is not over.

"We continue to actively investigate the role of individual executives in the criminal conduct that occurred during the 2003 lockout," he said.

Ralphs locked-out employees after grocery workers voted to strike against two other California chains, Vons and Pavilions, owned by Safeway. The United Food and Commercial Workers (UFCW) union represented workers from all stores.

Ralphs is owned by Kroger, one of the largest grocery retailers with sales of $60.6 billion in 2005. As previously reported by TNS, UFCW first brought Ralphs’s criminal conduct to light nearly three years ago with evidence that the company was rehiring workers illegally during the lock-out and asking them to use false names and social security numbers.

Although the judge accepting the plea agreement said it "imposes meaningful financial punishment on Ralphs," not all employees agree.

Ralphs employee Michael Ward told the LA Times that the plea agreement is "neither fair nor equitable."

"They are being allowed to settle for dimes on the dollar," he said.

Jackie Gitmed, who told the San Francisco Chronicle that she lost $15,000 during the lock-out, said she backs the agreement but thinks Ralphs "got off easy."

Ralphs pleaded guilty to five counts out of 53, a "representative sample" according to Braun. These included criminal conspiracy, false representation of social security numbers, identity fraud, falsification and concealment of material facts, and concealment of facts from an employee benefit plan.

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The NewStandard ceased publishing on April 27, 2007.


Catherine Komp is a contributing journalist.

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