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Post date: December 17 2003

Gristedes To Pay $3.25 Million In Back Wages And Fees In Deliverymen Case

State Attorney General Spitzer today announced a $3.2 million settlement with Gristede's Foods, Inc. to resolve allegations of improper wages being paid to grocery deliverymen who worked throughout its New York City supermarket chain.

The workers, who were hired through a delivery contractor, will receive a minimum of $2.6 million in back pay and damages. As part of the settlement, Gristede's has agreed to hire the delivery workers in-house and provide benefits, including health insurance, pension, and vacation pay.

The settlement was negotiated jointly by the Attorney General's office and the National Employment Law Project (NELP), which had filed a federal lawsuit in the United States District Court, Southern District of New York. The exact amount to be paid to the delivery workers will be determined by the federal judge. A maximum of $650,000 will be provided for private attorneys fees and costs.

"This agreement is vital because it provides these workers with compensation for the wages that were owed and, more importantly, brings these jobs up out of the underground economy. The delivery workers will now be Gristede's employees just like the cashiers and the people stocking the supermarket shelves, thereby ending an arrangement that denied these workers proper pay and benefits," Spitzer said.

"Today's settlement is a victory for all immigrant workers," said Catherine Ruckelshaus, Litigation Director at the National Employment Law Project. "Following the earlier settlement in this case with A&P/Food Emporium, these immigrant workers have netted over $6 million in unpaid wages and permanent union jobs in two grocery chains."

The agreement covers delivery workers who worked in Gristede's stores between 1994 and 2002. During this time period, the delivery workers were hired and paid through delivery contracting companies who assigned them on a full-time basis to the Gristede's stores. Between forty and sixty delivery workers at a time provided the services at Gristede's Manhattan stores. For most of the time period involved, the workers were receiving between $70 and $95 per week plus tips for a sixty hour work week, far below the required minimum wage for tipped employees. The Attorney General's Office and NELP have sought to hold Gristede's responsible as an employer for the delivery workers' wages even though the company denied that it was the employer.

As part of the the agreement, the delivery workers in Gristede's stores will now earn a minimum of $6.00 per hour exclusive of tips and will be eligible for benefits provided under a union contract between Gristede's and Local 338 of the Retail, Wholesale and Department Store Union.

The joint settlement agreement was approved last week in an order issued by Judge Alvin Hellerstein of the U.S. District Court. The Attorney General's Office and NELP will administer a claims process for delivery workers who worked for Gristede's during this time period.

Delivery workers in certain Duane Reade drug stores will receive $320,000 in back pay and damages for minimum wage and overtime violations. The Federal court will determine an additional amount to be paid for attorneys fees and costs to the private attorneys. Between eight and twenty delivery workers at a time provided the services for Duane Reade and received approximately $150 per week plus tips for an over fifty hour work week. The workers in the Duane Reade stores continue to be employed by a delivery contractor but have been covered by a union contract between the delivery contractor and Local 338 since 2000. The parties have entered into a settlement and are awaiting a final order from the Federal judge.

Today's settlement is part of the Attorney General's continuing efforts to combat labor violations. The AG and NELP had previously reached agreement with Food Emporium/A&P stores for restitution and attorneys fees and costs of $3.3 million for delivery workers in those stores.

The case is being handled by Deputy Bureau Chief Jennifer S. Brand and Assistant Attorneys General Mary Hughes, Deborah Baumgarten and Alicia Young of the Attorney General's Labor Bureau, under the direction of Bureau Chief M. Patricia Smith.