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Albertson's settles suits alleging OT violations

The Associated Press

BOISE, Idaho-- An agreement was announced Tuesday settling eight federal lawsuits alleging that Albertson's Inc. forced employees to work overtime off the clock and discouraged them from filing disability claims.

The nation's second-largest food-and-drug chain said it took a $37 million one-time charge against third-quarter earnings as a corporate estimate of total liability under the settlement of the proposed class-action claims, which still must be approved by U.S. District Judge B. Lynn Winmill.

But the agreement stipulates the payment of $17.5 million just to cover the plaintiffs' legal bills. That would leave $19.5 million of the total Albertson's set aside to pay claims to what the United Food & Commercial Workers International Union estimated could be as many as 150,000 eligible current and former employees.

The company had no estimate of the number potentially eligible, but Albertson's Vice President Mike Read said it should be substantially fewer than the union believes.

Read said it's too soon to tell whether employees in a specific region -- like Southern Oregon -- would be entitled to part of the settlement.

It's impossible to say, he said. There's no way to know until the settlement process kicks in.

He said eligible employees will receive a notice outlining the settlement process.

The case stems from an investigation launched by the union in 1996 that resulted in lawsuits that were consolidated in 1997. The settlement addresses policies for Albertson's stores in Arizona, Arkansas, California, Colorado, Idaho, Louisiana, Mississippi, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington and Wyoming.

The union, which financed the litigation and would be compensated for its expense under the agreement, hailed the settlement as a major victory for Albertson's workers.

The UFCW is pleased that Albertson's has finally agreed to do the right thing: Clean up its act and pay employees who worked off the clock to meet arbitrary labor cost goals, union President Douglas Dority said in a statement.

Albertson's denied any wrongdoing, but Read said the settlement was fair and achieved what the company had been trying to accomplish since the case began more than three years ago: establish the extent of the alleged problem so all eligible employees can get the pay they deserve.

In essence it brings us full circle, he said. We'll finally get the information we've been requesting for years so we can evaluate claims and pay legitimate claims.

Besides the overtime claims, the settlement resolves challenges to the salary status of grocery managers under California law and claims that Albertson's store-level bonus procedures resulted in managers discouraging employees from filing claims for worker's compensation benefits.

It calls for lump-sum payments of at least $2,500 for plaintiffs who participated in depositions and at least $1,000 for those who were named as plaintiffs but did not participate in depositions. Others eligible for payments must submit claims of at least $100.

The UFCW sought to reform Albertson's employment practices, not to punish a company that employs tens of thousands of our members, Dority said.

Albertson's has 220,000 employees and operates about 2,500 retail stores in 38 states.