Quick Stats

Quick Stats

    You are here

    Kroger Disputes Charge that it Sanctioned Illegal Hiring of Striking Workers

    CINCINNATI -- A federal grand jury returned an indictment against Ralphs Grocery Co., a wholly owned subsidiary of The Kroger Co., Cincinnati, in connection with the illegal hiring of replacement workers during the 2003-2004 labor dispute.

    CINCINNATI -- A federal grand jury returned an indictment against Ralphs Grocery Co., a wholly owned subsidiary of The Kroger Co., Cincinnati, in connection with the illegal hiring of replacement workers during the 2003-2004 labor dispute.

    According to the indictment, the grocery chain allegedly issued thousands of paychecks to falsely identified employees who had been locked out and allowed them to cash the checks at its stores. The chain also tried to conceal the practice from the workers' union by sending the employees to work at stores far from the outlets at which they regularly worked, the indictment charged.

    Kroger has previously acknowledged that during the 141-day grocery strike, a number of its store managers violated explicit company policy by rehiring striking workers and allowing them to work under false names and/or false Social Security numbers, and that Ralphs has taken disciplinary action against the management individuals involved.

    Among the charges in the 53-count indictment are false representation of a Social Security number, identity fraud, money-laundering conspiracy, concealment of money laundering, and obstruction of justice.

    The retailer said it has also made voluntary contributions to employee benefits plans, and has corrected records with the Social Security Administration and other government agencies in all cases where it was able to identify hourly employees who worked under false documentation during the strike.

    "Ralphs regrets that a number of its store managers took it upon themselves to violate company policy and federal law in order to rehire striking workers," said Paul Heldman, Kroger's s.v.p. "Although we believe many of these managers acted for humanitarian or personal reasons, their actions nonetheless were wrong and contrary to explicit company policy."

    However, while acknowledging limited improper hiring took place in some stores, Ralphs said it takes issue with allegations by the U.S. Attorney that the rehiring was approved by the company, or deliberately overlooked or condoned as part of a plan by Ralphs to prolong the strike.

    "We strongly dispute the claim that the behavior of some store managers reflected a corporate plan devised to further the company's position during the prolonged labor negotiations," said Heldman. "The federal prosecutors simply have this wrong. Ralphs hired more than 50,000 temporary workers during the strike and we believe less than 1 percent or about 200 of them were locked out employees who were rehired unlawfully. We regret that misconduct, but it had no effect whatsoever on the duration or outcome of the labor dispute."

    The labor unions involved previously filed charges making similar allegations with the National Labor Relations Board (NLRB). The NLRB is the expert federal agency with jurisdiction over labor disputes. The NLRB investigated the matter and dismissed the claims. An administrative appeal of that dismissal is pending before the NLRB in Washington. Kroger said it is confident that the NLRB's dismissal will be upheld.

    If convicted of all counts, Ralphs could face fines totaling up to twice the amount of gain received as a result of the conduct.

    Ralphs and Kroger said they have been fully cooperating with an ongoing U.S. Attorney's Office investigation of this matter.

    Related Content

    Related Content