During the lock out, Ralphs allegedly hired hundreds of workers under false names, violating employee benefit laws and allowing the lock out to continue, depriving union workers of their salary during that time.
In November, 2006 Ralphs was formally sentenced for its role in illegally hiring locked-out workers during the southern California labor dispute. Under the sentence, Ralphs must pay $70 million to settle charges against the company.
U.S. District Judge Percy Anderson, who presided over the case, found that Ralphs harmed its workers and its union by hiring union employees under false names. Furthermore, the judge found that the benefit funds, which did not receive contributions during the lock out, were also harmed by Ralphs' tactics. According to prosecutors, Ralphs secretly rehired nearly 1,000 locked-out workers in order to keep stores open during the labor dispute. In order to rehire the workers, records were falsified including using fake names and Social Security numbers.
$50 million of the sentence will be divided up amongst 19,000 Ralphs' grocery clerks, meat cutters and their unions, who were locked out during the labor dispute. The amount each union member receives will be determined based on his or her pay rate, how much regular strike pay the worker received, and how much the worker made at other jobs during the strike.
Meanwhile $20 million will be paid as a fine to the federal government.
The sentence was handed out after Ralphs pled guilty in July to five federal counts. Those counts included conspiracy, concealment of facts from an employee benefit plan, and identity fraud. Further investigations into the actions of individual company managers are on-going and could lead to charges against those individuals.
Ralphs admitted that two executives who served as negotiators during the strike (and were also trustee and alternate trustee to the trust funds providing health and pension benefits to grocery workers) concealed the illegal hiring from other executives in the company, even when asked directly if Ralphs had illegally rehired locked-out workers.
The labor dispute, which involved a strike and a lock out, began in October, 2003 and continued until February, 2004, the longest supermarket labor dispute in U.S. history. The dispute affected 852 stores, nearly 60,000 grocery workers, and cost the grocery companies involved more than $1.5 billion in sales.
The lock out at Ralphs began when union workers at Safeway Inc. supermarkets Vons and Pavilions went on strike. The next day, workers at Ralphs and Albertsons were locked out by their employers in a secret pact among the grocery chains.
Ralphs is part of the Kroger Co. chain. In addition to the $70 million payment, Ralphs is also on probation for three years, during which additional sanctions can be imposed if the company fails to meet its legal obligations.
Additionally, Safeway (Vons), Albertsons, and Kroger (Ralphs) face an antitrust lawsuit related to an agreement to support each other financially during the labor dispute. Prosecutors argue that the three companies entered into an agreement on August 4, 2003, to share profits during the strike/lockout and hurt consumers by discouraging competitive pricing.
If you worked at Ralphs Grocery Company during the lock out, you may be eligible for back pay and further compensation. Contact a lawyer to discuss your options.