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Published reports this morning say that Kroger’s Ralphs division in California has been indicted by a federal grand jury for rehiring striking employees during the four-month labor strike that ended early last year and then forcing them to use false names and Social Security numbers.

The 53-count indictment says that Ralphs and Kroger senior management knew about the ploy, and that the practice gave the company an unfair advantage in dealing with the labor unions organizing the strike.

The Wall Street Journal reports that “the indictment alleges that Ralphs falsified thousands of employment records, withholding allowance certificates and income-tax statements and that it falsified reports to trust funds that provide workers' pension-and health benefits. The indictment includes several counts of money laundering.”

While Ralphs has conceded that some “limited improper hiring” took place, it has maintained that nobody in senior management knew about it. The company also noted that when similar charges were filed by the labor unions with the National Labor Relations Board, they were dismissed…though an appeal is underway.

If convicted, the WSJ reports, “the grocer could face more than $100 million in fines and five years of corporate probation.”
KC's View:
Nasty business, money laundering.

We hope that Kroger has good attorneys.