Labor Expert: Ralphs Likely to 'Fare Pretty Well' in U.S. Attorney's Hiring Probe

LOS ANGELES - Ralphs' letter last week to employees, promising not to discipline any locked-out grocery clerks who voluntarily provide the false identities and Social Security numbers they used while working at the retailer's stores during the Southern California labor dispute, may have brought renewed attention to a high-profile federal investigation, but the probe is likely to conclude with minimal negative consequences for the grocer, according to labor attorney David L. Barron. Included with the letter was an U.S. Attorney's Office "advisement" that employees who worked with its lawyers would receive immunity from prosecution, published reports said.

Epstein, Becker & Green's Barron, who is not involved in the case, told Progressive Grocer: "The U.S. attorney is seeking to have employees provide information that would allow the government to indict managers or executives of Ralphs. Also, if unlawful actions were taken by managers, the company itself may be liable. Simply, the U.S. Attorney wants the big fish, i.e. Ralphs, and is not interested in pursuing criminal charges against individual employees. Indicting Ralphs managers [would] draw bigger headlines."

Barron continued: "Ralphs is probably cooperating because it wants to avoid liability. . .I expect that Ralphs will argue that any managers allowing locked-out workers to work under false identities or Social Security numbers were acting in a 'rogue' fashion and that the company had no knowledge of those activities. I understand that the company has actually disciplined some managers for this type of activity." Ralphs gave some zone managers 60-day suspensions for letting locked-out employees work.

"My best guess is that there will not be much evidence that this practice was widespread or known about by Ralphs executives," Barron added. "I would expect that there were only a few managers who were so desperate to find employees during this lockout that they would break the law in this manner. Knowingly allowing employees to work under false identities is very uncommon, even during a strike or lockout. I do not recall any other cases where employers have been prosecuted for this."

In response to a request for comment, company spokesman Terry O'Neil issued the following statement: "Ralphs has distributed to hourly store employees a letter from its legal counsel. The purpose of the letter is to complete the company's efforts to gather information so that federal, state, and local agency records can be corrected, if necessary.

"While the letter was sent to all retail clerks who were on the company's payroll last October, only employees who worked at a Ralphs store during the lockout under an incorrect name and/or incorrect Social Security number are asked to fill out the form attached to the letter, and return it to the company's legal department.

"The letter states that employees are asked to voluntarily cooperate with the company to ensure that it has complete and accurate payroll information, including Social Security, tax withholding, and related data.

"The company also provided assurances in the letter that the company will not discipline hourly employees who worked during the lockout under an incorrect name and/or Social Security number.

"The company is continuing to cooperate with the U.S. Attorney's Office."

Ralphs admitted in July that some store managers allowed locked-out employees to work during the four-month labor dispute, a violation of the grocer's own polices.

If Ralphs is found to have broken federal labor, tax, or Social Security laws, it could be ordered to give back pay to its 20,000 workers who were locked out, which could cost it hundreds of millions of dollars. The retailer could also be fined, and some of its managers or executives could be indicted.

After union officials called for the strike against Safeway's Vons and Pavilions chains on Oct. 11, Albertsons and Ralphs locked out their workers. A total of about 59,000 workers at 859 stores were affected.

"There may or may not be much here in the end, after the investigation is done," Barron said. "[I believe] that Ralphs will fare pretty well when this is all over, and that there will not be any significant criminal indictments of managers or executives."
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