Kroger Unit Settles Labor Probe

Ralphs Grocery, a unit of Kroger ( KR), reached a settlement with the U.S. Attorney's Office for the Central District of California regarding its improper hiring of some employees who were locked out during a 2003-04 labor dispute.

Last December, a federal grand jury in Los Angeles returned a 53-count indictment of Ralphs. Under the terms of a plea agreement, Ralphs will plead guilty to five of the counts. If the agreement is approved by a U.S. District Court judge, the remaining counts will be dismissed.

Ralphs has agreed to pay a fine of $20 million to the government and to create a $50 million restitution fund.

Previously, Ralphs acknowledged that during the 141-day labor dispute, certain store managers and their supervisors violated company policy by illegally hiring some locked-out employees. In order to avoid detection, many of the employees worked under false names or Social Security numbers.

Shares of Kroger were slipping 8 cents to $21.78 Monday.

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