US: Guilty Plea in Ralphs Labor Case

The grocery chain agrees to pay $70 million for illegal hiring during the 2003-04 lockout

Ralphs grocery chain formally pleaded guilty Wednesday to felony charges that it illegally rehired locked-out employees during the 2003-04 supermarket labor dispute in Southern and Central California.

The pleas in federal court in Los Angeles followed a June 30 agreement between the supermarket chain and federal prosecutors. It called for the company to plead guilty and pay a total of $70 million in fines and restitution. The company would also be placed on three years' probation.

U.S. District Judge Percy Anderson said he would discuss the plea agreement Sept. 27 and would approve or reject it during an Oct. 16 sentencing hearing.

Mary M. Kasper, Ralphs' group vice president of legal services, entered the company's guilty pleas to five charges, which included using fake names and Social Security numbers to rehire about 1,000 workers during the 4 1/2 -month strike and lockout.

Ralphs, a unit of Kroger Co., has also admitted that it violated federal laws regarding identity fraud, conspiracy, pension reporting and record keeping for the Social Security Administration and the Internal Revenue Service.

If the plea agreement is accepted, the company will pay a $20-million fine to the federal government and create a $50-million restitution fund, most of which will go to the 19,000 Ralphs employees who were locked out.

Greg Conger, president of the United Food and Commercial Workers union, Local 324 in Orange County, attended the hearing. He said it had been an "exciting and emotional" day for him and for his 23,000 members, of which about 4,700 are Ralphs employees.

"Justice is finally being served," Conger said. "It has been a long, long, hard process."

Assistant U.S. Atty. Adam H. Braun said that the investigation was ongoing and that the government had the option to charge specific individuals.

The U.S. attorney's office said Ralphs also admitted that two executives who helped oversee the employee health and retirement funds concealed the illegal hiring from other fund trustees.

Rank-and-file Ralphs employees who cooperated with the government would not be prosecuted, Braun said. Those who refused to cooperate or provided false information to the government could be charged, he added.

AMP Section Name:Labor

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