LOCKYER WILL SUE GROCERS REVENUE-SHARING PACT CITED.

Byline: Nicholas Grudin Staff Writer

State Attorney General Bill Lockyer will sue Ralphs, Vons, Albertson's and Food-4-Less, alleging that an agreement between the firms to share profits and losses during the grocery strike is in violation of antitrust laws, officials said Friday.

The complaint, which was delivered to the federal court in Los Angeles on Friday and will be filed Monday, comes after a two-month investigation into the ``mutual aid pact'' that has helped the stores' parent companies weather the 112-day strike.

``The grocers' agreement to share costs and revenue hurts consumers by discouraging competitive pricing,'' Lockyer said. ``The antitrust law exists to prevent that, and I intend to enforce the law.''

Lockyer's announcement comes as the supermarket strike grinds toward its fourth month, now the longest and largest in the history of the United Food and Commercial Workers union.

Some striking workers have crossed the picket lines, and others have found new jobs, but UFCW leader Rick Icaza said Lockyer's lawsuit could help shift the momentum.

``This will ratchet it up and force them to come to the table,'' Icaza said. ``More specifically, their stockholders will realize that they are not going to have the profits that Ralphs has made to help sustain their profitability.''

The grocers contend that Lockyer's suit is ``completely without merit.''

``The companies have cooperated with Mr. Lockyer's office during his inquiry, providing him with a copy of the agreement, and offering to meet with his office regarding these issues. Unfortunately, today's action was taken even as follow-up meetings were being scheduled between the companies and Mr. Lockyer's office,'' reads a joint statement from the grocers.

``The employers entered into this agreement to protect themselves in the event the unions engaged in tactics designed to drive a wedge between the employers by causing disproportionate losses to one employer as compared to another ... the unions, in fact, engaged in such tactics.''

The strike began Oct. 11, when workers from Vons and its sister store Pavilions walked off their jobs. The next day, Albertson's and Ralphs locked out their employees.

Later that month, the unions removed picket lines from Ralphs in hopes of focusing pressure on the other chains. That approach, it turned out, backfired due to the pact between the stores. While Food-4-Less, a sister of Ralphs, is involved in the pact, it is not involved in the labor dispute.

In essence, by removing the pickets from Ralphs, the union was letting revenue back into Albertson's and Vons. The pact was revealed Dec. 1 by Lockyer's inquiry.

When Lockyer initially announced his investigation, some labor attorneys argued that his suspicions about the legality of the pact were unfounded due to broad exemptions in federal labor law that allow for companies bargaining in a bloc - like Albertson's, Vons and Ralphs - to act in ways that would generally be in violation of antitrust laws.

``These are the economic weapons that unions and companies both have at their disposal,'' said Adam Abrahms, a labor lawyer who serves on the state board of directors for the California Republican Lawyers Association.

Lockyer's complaint attempts to quiet naysayers by showing two areas where exemptions do not apply.

According to the complaint, the three companies involved in the strike agreed in August to share profits and losses for the duration of a potential labor dispute, anticipating the strike two months before negotiations broke down.

The complaint also alleges that Kroger-owned stores Ralphs and Food- 4-Less, Safeway-owned Vons and Pavilions, and Albertson's stores conspired to continue to share profits and losses for two weeks beyond the end of the strike.

``This ... is not exempt from the antitrust laws ... for the following reasons, among others: (a) the agreement extends beyond the time of the labor dispute; and (b) it includes a supermarket which is not a party to the collective bargaining process, or a member of the multi-employer bargaining unit,'' according to the complaint.

Abrahms argues that even these allegations are not enough to merit Lockyer's lawsuit.

``The fact that one other grocery chain is involved means very little to me. The UFCW has gotten the Teamsters, the SEIU and many other unions involved ... Lockyer is trampling through the woods where he doesn't belong,'' Abrahms said.

But labor expert Kent Wong said discounting Lockyer's allegations out of hand would be to ignore the complexity of labor and antitrust laws.

``There's very little precedent for something like this - it's extremely unusual for three competitors to be locking arms and agreeing to a revenue-sharing pact based on their mutual interest to drive down labor costs within the industry,'' Wong said.

``The fact that the lawsuit just came out today, I'm sure they did their homework to find out what the antitrust laws are. This is a highly unusual case.''

Today, the UFCW and AFL-CIO will hold their biggest rally yet at the Great Western Forum in Inglewood, where they expect 10,000 striking and locked-out workers to gather.

The supermarkets have already announced revenue losses in the hundreds of millions of dollars as a result of the strike, and Icaza and financial experts expect even more dramatic losses when Safeway reports its fourth quarter earnings Feb. 12.

Nicholas Grudin, [phone]

nicholas.grudin(at)dailynews.com