Ralphs to pay $70 million in strike settlement

LOS ANGELES — A federal judge Monday approved the Ralphs grocery chain's $70 million settlement and guilty plea to criminal charges that it illegally rehired locked-out workers during a Southern California supermarket labor dispute almost three years ago.

Ralphs is owned by Cincinnati-based Kroger, which also owns Fred Meyer stores and QFC supermarkets.

The California chain locked out employees after grocery workers voted to strike against Safeway's Vons and Pavilions chains.

Under the agreement, Ralphs will pay $20 million in fines and $50 million into a fund to reimburse workers and their union.

Kroger was not charged in the case

Ralphs also agreed to cooperate with the government in its ongoing investigation of the role corporate executives played in the scheme, which involved using fake names and Social Security numbers to hide the identities of workers illegally rehired during the dispute.

U.S. District Judge Percy Anderson said the company's pledge to cooperate was a key factor in his decision to approve the agreement.

The government is investigating actions of "a number of Ralphs employees," the judge said, and the plea deal doesn't restrict that inquiry.

Ralphs has agreed to waive attorney-client privilege, giving investigators access to interviews and memos from its internal investigation, said Assistant U.S. Attorney Adam Braun.

Braun declined to comment on how high up the company's chain of command the probe could lead.

According to the plea agreement, "Ralphs' vice president of human resources, at least one group vice president and a number of zone managers encouraged, condoned, permitted or directed the rehiring of locked-out employees under false names and Social Security numbers during the lockout."

A Ralphs spokesman declined to comment.

The government has said it won't prosecute rank-and-file workers who were illegally hired as long as they cooperate with investigators.

Anderson approved the appointment of a "special master" to oversee the $50-million restitution fund.

Most of that money will be paid to Ralphs' employees who were locked out during the strike and applied for restitution.

Union officials estimated that some workers could receive as much as $3,000 from the settlement.

Money from the fund also will be used to reimburse the United Food and Commercial Workers, for benefits paid to workers during the 4 1/2-month dispute.

Although he approved the plea agreement, Anderson postponed formal sentencing until Nov. 1.

In addition to paying the fine and restitution, the deal calls for Ralphs to be placed on three years' probation and establish court-supervised training programs for its workers.

Ralphs agreed June 30 to plead guilty to five felony charges included in a 53-count grand-jury indictment returned in December.

Ralphs was charged with violating federal laws by secretly rehiring about 1,000 locked-out workers during the dispute, which lasted from October 2003 until February 2004.

Material from The Associated Press was used in this report.