Safeway Is Dismissed From Suit
Safeway Inc. was dismissed Monday from an antitrust suit claiming that the company and two of its competitors used a mutual-aid agreement to lessen the effect of the supermarket labor dispute in Southern California that ended more than two years ago.
Safeway’s Vons unit, which operates some of the Southern California stores that were involved in the 4 1/2 -month dispute, is still a defendant in the lawsuit brought by California Atty. Gen. Bill Lockyer. U.S. District Judge George King agreed that Safeway, as Vons’ parent, was wrongly included.
For the record:
12:00 a.m. July 13, 2006 For The Record
Los Angeles Times Thursday July 13, 2006 Home Edition Main News Part A Page 2 National Desk 1 inches; 56 words Type of Material: Correction
Grocer antitrust suit: An article in Tuesday’s Business about the dismissal of Safeway Inc. from an antitrust lawsuit said Safeway’s Vons unit, Kroger Co.’s Ralphs unit and Albertsons Inc. shared nearly $150 million to assist one another during a strike and lockout that ended in February 2004. The lawsuit, however, says the chains shared $220 million.
“Safeway’s liability under the currently articulated theory is not apparent,” King said in a ruling filed in Los Angeles federal court. “The complaint does not give defendant Safeway adequate notice of its alleged role.”
Lockyer sued Safeway, Albertsons Inc. and Kroger Co. in 2004, claiming their Mutual Strike Assistance Agreement violated federal antitrust law. The strike began Oct. 11, 2003, at Safeway’s 289 Vons and Pavilions stores, after which Albertson’s and Kroger’s Ralphs unit locked out union members at their 571 stores from San Luis Obispo to San Diego.
The mutual-aid agreement was reached before the dispute began as a way to ensure that no chain could profit at the expense of another during the fight with the United Food and Commercial Workers union.
Under the pact, the chains shared nearly $150 million to help one another during the strike and lockout.
Safeway had argued that it shouldn’t be part of the lawsuit because Vons, and not the parent company, entered into a deal in which the stores would share costs and revenue during the labor dispute. Lawyers for California had said Safeway should be held liable because, even if it didn’t execute the agreement, the parent company helped negotiate and draft it.
Brian Dowling, a spokesman for Pleasanton, Calif.-based Safeway, and Tom Dresslar, a spokesman for Lockyer, didn’t return calls seeking comment.
On June 30, Kroger’s Ralphs unit said it would pay $70 million in fines and restitution to settle a separate criminal investigation into the company’s secret hiring of workers while they were locked out during the labor dispute. Under the plea agreement with the U.S. attorney’s office in Los Angeles, Ralphs was to plead guilty to counts including identity fraud and conspiracy to violate federal law, the company said.
The labor dispute affected 59,000 workers at 852 supermarkets. It ended Feb. 29, 2004.
