Distribution FAQ
- What is this Court action about?
- How do I know if I am an Eligible Employee?
- When did the distributions to the Eligible Employees and the Unions occur?
- How were the awards calculated?
- Why was my claim denied?
- I received a letter stating that I was approved but was not eligible for payment from the RRF. What does this mean? Why didn’t I get any money?
- I thought that the amount of my check would be higher than what I actually received. What happened?
- Do I have any further recourse regarding the final status of my claim or my distribution amount?
1. What is this Court action about?
As one result of the action of the Court in the United States of America v. Ralphs Grocery Company, No. CR 05-1210-PA, Ralphs Grocery Company (“Ralphs”) established a restitution fund known as The Ralphs Restitution Fund ("RRF") in the amount of $50 million. This restitution fund is for the benefit of Eligible Employees, the Unions identified in the action and certain employee benefit funds.
The Unions identified in the aforesaid action are the following local unions of the United Food and Commercial Workers Union (“UFCW”): (1) UFCW Local 135; (2) UFCW Local 324; (3) UFCW Local 770; (4) UFCW Local 1036; (5) UFCW Local 1167; (6) UFCW Local 1428; and (7) UFCW Local 1442.
2. How do I know if I am an Eligible Employee?
“Eligible Employees” are individuals who: (1) were Ralphs employees (excluding pharmacists) covered by the Collective Bargaining Agreement; (2) were locked out by Ralphs during the Strike or Lockout; and (3) did not work for Ralphs, Albertsons, or Vons during the Strike or Lockout under any name or identity.
3. When did the distributions to the Eligible Employees and the Unions occur?
Checks were mailed on Friday, November 30, 2007 to all those Eligible Employees who were entitled to receive a portion of the RRF and submitted a timely and complete claim forms. In addition, each of the seven Unions involved in this matter received their share of the RRF based on the amount of Lockout Benefits paid to these Eligible Employees; these Union payments were also mailed on Friday, November 30, 2007.
4. How were the awards calculated?
Your initial Calculated Claim Value was determined using your job classification and hourly rate of pay. This amount was then reduced by both Lockout Benefits and other sources of income you received during the Lockout, as entered on your Claim Form.
Eligible Employees’ claim amounts were calculated using the following guidelines noted in the Plea Agreement:
- Full-time employees receive credit for 40 hours per week
- Part-time employees receive credit for 27 hours per week
a. NOTE: Part-time Courtesy Clerks receive credit for 16 hours per week
The calculation first determines the amount of income the Eligible Employee would have earned during the Lockout Period (the “Calculated Claim Value”) had the Lockout not occurred. This is accomplished by multiplying the hourly rate of pay by the number of hours worked per week (using the guidelines listed above). This amount is then multiplied by 20 weeks (the duration of the Lockout) to arrive at the Calculated Claim Value.
From the amount of the Calculated Claim Value, any Lockout Benefits paid to the Eligible Employee are deducted (since this was partial compensation for being locked out). Any other income earned by the Eligible Employee during the Lockout Period from other sources (e.g., other employment, disability payments, unemployment benefits, etc.) are also deducted from the amount of lost income. The resulting amount is called the Gross Claim Amount.
The total of all Gross Claim Amounts for all Eligible Employees who filed timely and complete claim forms and the Lockout Benefits paid to them by the Unions exceeded the available funds in the RRF. As a result, the available funds in the RRF were divided by the total Gross Claims and Lockout Benefits amount to arrive at the Pro Rata Percentage. The Pro Rata Percentage is roughly 43%.
The Gross Claim Amount for each Eligible Emplyee is then multiplied by the Pro Rata Percentage to determine the pre-tax distribution amount due to the Employee. In a similar fashion, the Lockout Benefits amount paid to each Employee is also multiplied by the Pro Rata Percentage to determine the distribution amount to the Unions.
State and federal taxes were withheld from the wage portion of the Employee’s distribution amount. These figures are noted in the box at the top right-hand corner of the check transmittal letter. The balance remaining after taxes is the issue amount of the claimant’s check.
Here are three examples of how the calculation works:
Example #1: Full-Time Employee (any job classification)
Hourly Rate: $18.00 per hour
Lockout Benefits Paid: $5,000
Other Income Earned during the Lockout: $2,500
Calculated Claim Value: [$18.00 per hour] x [40 hours per week] x [20 weeks] = $14,400
Gross Claim Amount: [$14,400] – [$5,000 in Lockout Benefits] – [$2,500 in other income] = $6,900
Pro Rata Claimant Amount (payable to Eligible Employee): [$6,900] x [approximate 43% pro rata percentage] = $3,004.95
Note: This would be the pre-tax claimant amount. State and federal taxes were withheld from the wage portion of the Pro Rata Claimant Amount in accordance with state and federal law.
Pro Rata Lockout Benefit Amount (payable to Union): [$5,000] x [approximate 43% pro rata percentage] = $2,177.50
Example #2: Part-Time General Merchandise Clerk (or any other position other than Courtesy Clerk)
Hourly Rate: $12.00 per hour
Lockout Benefits Paid: $1,350
Other Income Earned during the Lockout: $0
Calculated Claim Value: [$12.00 per hour] x [27 hours per week] x [20 weeks] = $6,480
Gross Claim Amount: [$6,480] – [$1,350 in Lockout Benefits] – [$0 in other income] = $5,130
Pro Rata Claimant Amount (payable to Eligible Employee): [$5,130] x [approximate 43% pro rata percentage] = $2,234.12
Note: This would be the pre-tax claimant amount. State and federal taxes were withheld from the wage portion of the Pro Rata Claimant Amount in accordance with state and federal law.
Pro Rata Lockout Benefit Amount (payable to Union): [$1,350] x [approximate 43% pro rata percentage] = $587.93
Example #3: Part-Time Courtesy Clerk
Hourly Rate: $8.00 per hour
Lockout Benefits Paid: $2,800
Other Income Earned during the Lockout: $0
Calculated Claim Value: [$8.00 per hour] x [16 hours per week] x [20 weeks] = $2,560
Gross Claim Amount: [$2,560] – [$2,800 in Lockout Benefits] – [$0 in other income] = -$240
Pro Rata Claimant Amount (payable to Eligible Employee): not applicable. The employee received more compensation via Lockout Benefits than the Calculated Claim Value. The employee receives no payment from the RRF.
Pro Rata Lockout Benefit Amount (payable to Union): [$2,560] x [approximate 43% pro rata percentage] = $1,114.88
Note: When Lockout Benefits paid to an employee exceeded the Calculated Claim Value, the Calculated Claim Value cannot be a negative number. Unions were reimbursed up to the Calculated Claim Value (in this example, $2,560 of the $2,800 in Lockout Benefits paid) but not for any excess payments to the employee (in this example, $240).
Claimant wage payments are taxed at the Federal supplemental income tax rate. State income taxes, federal/state disability insurance payments, and Medicare payments are also withheld. These are the standard taxes withheld in accordance with state and federal law.
The Plea Agreement establishes strict eligibility requirements, which you do not meet. As a result, you are not eligible for payment from the Ralphs Restitution Fund. Please review your “Notice of Claim Denial” letter for further explanation on the reason(s) your claim was denied.
6. I received a letter stating that I was approved but was not eligible for payment from the RRF. What does this mean? Why didn’t I get any money?
The RRF was established to provide restitution to Eligible Employees who suffered a loss of income (fully or partially) during the Lockout. Individuals who received Lockout Benefits and/or other income that met or exceeded the amount of income they would have earned at Ralphs during that time period (had they been allowed to work) did not suffer a loss of income. As such, the RRF issued payments only to those employees whose compensation during the Lockout Period (via Lockout Benefits or other income) was less than their typical Ralphs income as calculated by the formula in the Plea Agreement. Please see Example #3.
7. I thought that the amount of my check would be higher than what I actually received. What happened?
The Special Master calculated, based upon information provided by Ralphs and the Unions, what Eligible Employees would have earned during the Lockout had they been able to work, but the employees’ Claim Value is the lost income less any Lockout Benefits they already received, as well as any other income they earned from other sources during the Lockout. The RRF does not provide restitution to employees for any previous compensation they already received.
In addition, due to the high claims response rate in this matter, the total of all Gross Claim Amounts for all Eligible Employees and the Lockout Benefits paid by the Unions exceeded the available funds in the RRF. As a result, the available funds in the RRF were divided by the total Gross Claims and Lockout Benefits amount to arrive at the Pro Rata Percentage. The Pro Rata Percentage is roughly 43%. Each claimant and Union payment was multiplied by the Pro Rata Percentage to determine the actual payment amounts.
8. Do I have any further recourse regarding the final status of my claim or my distribution amount?
No. The Special Master’s Notice of Claim Denial is the final decision. Every claimant whose claim was denied had the right to appeal the Special Master’s decision within 21 days of issuance of the Notice of Claim Denial. If the claim denial was upheld by the Special Master after review of the appeal, the Special Master (via the Administrator) mailed letters to those individuals indicating that their request for reconsideration was denied.