Ralph Agrees To Plead Guilty And Pay $70 Million For Illegally Rehiring Workers During Labor Action

Ralphs Grocery Company, the owner of about 300 supermarkets across Southern California, has agreed to plead guilty to criminal charges that it covertly rehired hundreds of locked-out workers under false names and social security numbers during its 2003-2004 lockout of approximately 19,000 Ralphs grocery clerks and meat cutters. As part of a plea agreement filed this afternoon in United States District Court in Los Angeles, Ralphs has agreed to pay $70 million dollars in criminal fines and compensation to Ralphs' grocery workers and the seven union locals that represent these workers.

In addition to rehiring locked-out workers under false identities, Ralphs has admitted that it submitted false tax information to the Social Security Administration and Internal Revenue Service related to employing these workers under false identities.

The company also admitted in court documents that two of its executives, who served as trustee and alternate trustee to the trust funds that provide health and pension benefits to current and retired grocery workers, breached their fiduciary duties to the funds. When directly asked if Ralphs had illegally rehired locked-out workers, the executives concealed from other trustees the illegal rehiring. At the time of this criminal conduct, these two executives were serving as Ralphs' top negotiators with the unions. The company has admitted it benefited from this concealment because the unions did not learn of the illegal rehiring.

"This labor dispute affected nearly everyone in Southern California," said United States Attorney Debra Wong Yang, a member of the President's Corporate Fraud Task Force. "It is particularly egregious that this company engaged in pervasive criminal conduct during the nearly five months of the dispute. However, corporations that take responsibility their criminal conduct are to be commended, and Ralphs has done so in this matter. 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 length of the grocery labor dispute." Read more at usdoj.gov