Ralph’s Management Indicted by Federal Grand Jury
Although the announcement didn’t get much play in the media, on Friday, September 19, a federal grand jury handed down indictments against eight former and current Ralphs management employees, accusing them of 23 counts of violating federal labor law. The alleged violations occurred five years ago, during the UCFW’s (United Commercial and Food Workers) debilitating 141-day strike against Ralphs grocery store chain.
Two years ago, store executives pleaded guilty to similar charges (and paid fines amounting to $20 million), admitting that during the company’s lockout they had knowingly and illegally hired hundreds of union workers to help keep the stores running smoothly. Friday’s indictments were a follow-up to those original charges.
The case was ugly from the start. Once the UCFW called its strike, and Ralphs locked out employees at all their stores, it soon became apparent that the operation was suffering from not having competent, experienced workers running it. But as tantalizing as the notion was, hiring back selected locked out employees to man up the stores was illegal, and Ralphs knew it.
Still, the strike/lockout was crippling them. Therefore, Ralphs managers came up with a plan to conceal their strategy. They assigned these illegal hires fictitious names and phony social security numbers, and scheduled them to work at stores a good distance away from their usual jobs, so they wouldn’t be recognized by fellow workers or regular customers. Unfortunately for Ralphs, the subterfuge was almost immediately exposed.
Of course, when accusations of misconduct were initially made by the UCFW, Ralphs not only categorically denied them, they pretended to be grossly offended by even the hint that such improprieties had occurred, and went so far as to describe the charges as proof that the union was “vindictive” and “desperate.”
Only after an overwhelming amount of evidence had been amassed against them did company executives sheepishly acknowledge their crimes. In addition to the $20 million paid in fines, Ralphs agreed to establish a $50 million fund to reimburse union members for money lost by Ralphs having extended the duration of the shutdown (by keeping stores running via illegal employees).
In any event, many observers thought the stiff fines and the employee reimbursement fund would be the end of it. But because the violations were so crass, so clumsy and heavy-handed—and because Ralphs executives had lied so shamelessly throughout the investigation—the U.S. attorneys decided that the grocery chain executives needed to be treated as the criminals they were. The feds deserve credit for persevering.
Strikes have been part of the labor-management landscape for over 200 years. The historical rationale behind striking is a simple one. In order to put pressure on a company to be more generous in its contract offer, the union attempts to demonstrate to management just how much the company needs their workers, how dependent upon them they are.
And the only way for workers to do this is by withholding their labor—to “punish” themselves by voluntarily sacrificing their immediate wages, benefits and job security in return for a greater, long-term good. The logic underlying a strike can be expressed by the simple dictum: By hurting ourselves, we can, perhaps, hurt you.
In truth, a strike is the only real leverage a union has. Short of actually shutting down a company, everything else in a contract negotiation amounts to rhetoric—debating, bickering, compromising, shouting, threatening. Moreover, despite what management says about strikes being obsolete, meaningless, counterproductive, etc., don’t let them kid you. Strikes are the only weapon management fears.
So when a company like Ralphs secretly and illegally hires hundreds of locked-out workers and continues to run its operations, it’s sending a phony message. It’s saying that it doesn’t miss the striking workers, that the operation is chugging along quite nicely without them, that the strike was unsuccessful.
Worse, Ralphs’ felonies contributed to prolonging the strike, resulting not only in thousands of earnest strikers remaining out of work longer than necessary—unaware that laws were being broken—but forcing the union to accept significant contract concessions as a condition for returning to work .
The Ralphs debacle should be a lesson to anyone who thinks Corporate America is predisposed to act ethically when it comes to labor relations. Alas, more often than not, the governing consideration in these matters—especially when the stakes are high—is whether or not they get caught. Thanks to the feds’ persistence (and Ralphs own arrogance and stupidity), they got caught.
DAVID MACARAY, a playwright and writer in Los Angeles, was a former labor union rep. He can be reached at email@example.com