RALPHS INDICTED IN 2003-04 STRIKE WORKERS REHIRED UNDER FAKE NAMES.

Byline: Dan Laidman Staff Writer

A federal grand jury indicted Ralphs Grocery Co. on Thursday on charges that it hired hundreds of workers under false names during the crippling 139-day strike in 2003.

Federal prosecutors said the chain knowingly rehired key employees who used false names and Social Security numbers, then obstructed the two-year investigation that led to the 106-page indictment.

``The company's actions constitute intentional identity fraud on a large scale by a major company,'' said David F. Butler of the Social Security Administration's Office of Inspector General.

While the case is rooted in labor laws restricting ``selective lockouts,'' the 53-count indictment focuses on Ralphs' conduct during and after the largest grocery strike in U.S. history.

The charges include identity fraud, money laundering and obstruction of justice. If convicted, the company could be fined more than $100 million, plus back pay and other restitution.

Ralphs' parent company, Cincinnati-based Kroger Co., acknowledged some improper hiring but said such conduct was limited to low-level managers who have since been disciplined.

``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,'' Paul Heldman, Kroger's senior vice president, said in a statement.

But the top federal prosecutor in Los Angeles countered that investigators found evidence that high-level company officials were involved.

``It appears this was much more widespread on a much more organized basis,'' U.S. Attorney Debra Wong Yang said at a news conference. ``There was a tacit acknowledgment this was going on.''

Ralphs noted that the National Labor Relations Board investigated similar allegations and dismissed the claims. Thursday's indictment, however, accuses the company of making false statements to the labor board.

The indictment also accuses the company of attempting to obstruct the grand jury investigation, which began in January 2004, by concealing documents.

While the indictment names only Ralphs as a defendant, and not its corporate parent, Kroger, or any individuals, prosecutors said their investigation is ongoing and more charges are possible.

The indictment bolsters accusations made by unions during the 139-day strike and lockout that affected nearly 70,000 workers across Southern California.

``We've been vindicated,'' said Rick Icaza, president of United Food and Commercial Workers Local 770. ``We felt from the very start they were illegally hiring these people back.''

Workers at Vons went on strike in October 2003, and Ralphs and Albertsons employees were locked out hours later as the industry united. The companies used temporary replacement workers to keep most stores open, but suffered some $2 billion in losses.

Unions unexpectedly stopped picketing Ralphs stores in late October, increasing the chain's business and creating a need for reliable workers, according to the indictment.

Ralphs proceeded to recruit locked-out employees with needed skills to return as replacement workers, the indictment said.

To conceal its actions, the company hired the workers under fictitious or other people's names and Social Security numbers, the indictment said. Ralphs then allegedly filed false government tax and employment forms and benefits records, and cashed payroll checks with the incorrect names.

Prosecutors say nearly 1,000 workers were rehired under such circumstances, while Ralphs put the number at closer to 200.

The company allegedly placed the employees at far-flung locations and moved them around so they would not be recognized.

U.S. Attorney Yang contrasted Ralphs' actions with those of Vons and Albertsons, which she said developed ``clear-cut policies'' prohibiting bringing back locked-out workers as temporary labor.

Ralphs senior management adopted a looser policy, the indictment said, and encouraged such hiring when talking to local managers.

The improper hiring strengthened Ralphs financially and helped it survive the lengthy lockout while the unions saw their resources drained, prosecutors said.

Ralphs later disclosed that it paid Albertsons and Vons' parent company, Safeway, about $147 million as part of a secret agreement the firms entered into in response to the strike.

That profit-sharing deal prompted California's attorney general to sue the companies for antitrust violations in a separate case that still is pending.

Dan Laidman, [phone]

dan.laidman(at)dailynews.com