The Ralphs grocery chain said Friday that it had agreed to pay $70 million in fines and restitution to settle criminal charges that it illegally rehired locked-out workers during the supermarket labor dispute in Southern California more than two years ago.
Under a proposed agreement filed Friday in U.S. District Court in Los Angeles, Ralphs would plead guilty to five felony charges included in the 53-count grand jury indictment returned against the company in December.
Ralphs was charged with violating federal laws by secretly rehiring about 1,000 locked-out workers during the 4 1/2 -month strike and lockout from October 2003 to February 2004. The case had been scheduled to go to trial Aug. 15 before U.S. District Judge Percy Anderson, who must approve the plea agreement.
In the agreement, Ralphs admitted that it used fake names and Social Security numbers to pull off the deception. Authorities said the scheme was designed to help keep stores running during the labor dispute, the longest and largest in U.S. history involving the supermarket industry.
The labor strife affected 852 stores and nearly 60,000 grocery workers at supermarkets across Southern and Central California. The dispute cost the grocery companies more than $1.5 billion in sales before it ended on Feb. 29, 2004, when workers ratified a new contract whose terms were widely seen as a defeat for the union.
"This labor dispute affected nearly everyone in Southern California," U.S. Atty. Debra Wong Yang said in a statement. "I hope that the resolution of this case will provide some relief to the thousands of workers who were injured by the criminal conduct that unfairly prolonged" the dispute.
Ralphs said it would plead guilty to violating federal laws regarding identity fraud, pension reporting and Social Security and Internal Revenue Service record-keeping, as well as one count of conspiracy.
The grocery chain said it would pay a $20-million fine to the federal government and create a $50-million restitution fund. Most of the money would be paid to the 19,000 Ralphs grocery clerks and meat cutters who were locked out during the dispute.
Officials of the United Food and Commercial Workers union, which represented the grocery employees, estimated that some workers could receive as much as $3,000 from the settlement.
The amount each union member receives from the fund would depend on factors such as the worker's pay rate, the amount of regular strike pay received and how much money, if any, the worker made at other jobs during the labor dispute.
