LOS ANGELES -- Eight former middle-level management employees of Ralphs Grocery Co., Compton, Calif., are suing the chain and its chairman, Byron Allumbaugh, for $8 million for wrongful termination.
The complaint, filed late last month in Superior Court here, charges the defendants with breach of contract, fraud, misrepresentation and age and sex discrimination, and seeks compensatory damages for lost wages and benefits, plus emotional distress.
According to the complaint, Ralphs fired the eight men last May, less than a year after the company merged with Food 4 Less Supermarkets in mid-1995.
Greg Mays, executive vice president and chief financial officer at Ralphs, said the chain laid off "nearly 2,000" employees in 1996, "and we were able to work out fair and acceptable severance arrangements with all but these eight people, who decided to sue."
The eight plaintiffs are Jeffrey Bundy, who was director of operational control audit; Randall Burtch, former director of marketing analysis; David Calvert, director of engineering, manufacturing and distribution; James Huss, vice president of industrial engineering; John Lacriola, manager of engineering; Patrick Metoyer, manager of unloading dock; Robert Miller, director of labor relations; and Leon Sims, assistant director of the Carson warehouse facility.
According to the complaint, the plaintiffs entered into contracts with Ralphs, which supplemented their original contracts, "whereby [their] positions at Ralphs would be secure during and after the merger."
The complaint notes, however, that "Allumbaugh knew that there would be substantial reductions in expenses as a result of the merger, and as a result of the reductions in expenses, there would have to be layoffs of employees.
"Plaintiffs . . . believe that . . . analysis [was] done before the merger was completed regarding which employees would be terminated and who would be retained as employees."
The complaint charges that Ralphs kept assuring its employees -- as a group, as well as individually -- that the merger would be good for all personnel and that it would create more advancement opportunities in the combined operation.
"Ralphs made these assurances," the complaint alleges, "to keep plaintiffs from seeking other employment, so that Ralphs could utilize plaintiffs' skills to facilitate the merger."
As a result of the assurances, the complaint continues, "plaintiffs worked extraordinary hours and put forth exceptional physical and emotional energy to facilitate and implement the merger, many working up to 60 to 70 hours per week and six or seven days per week for the 11-month period . . . until the termination of their employment."
According to the complaint, the eight executives were terminated between May 8 and 13, 1996, and were advised that their positions were being eliminated. Noting in the complaint that their ages range from 46 to 64, the plaintiffs point out they were replaced "by younger, less experienced employees" and in some cases by women.
"Ralphs terminated plaintiffs because of their age, in that Ralphs created charts, by department, listing the employees' ages, gender, race and risk factor, to use in deciding which employees to terminate," the complaint states. While other employees, including some younger employees, were given the option of a demotion rather than termination, the eight plaintiffs were not given that option, the complaint charges. "Plaintiffs believe and allege that their age was a substantial and determining factor in Ralphs' decision to terminate their employment," it says.
The complaint also alleges that the effects of the terminations "were more detrimental to the male employees as compared to the female employees."
Among other charges:
That the plaintiffs were offered severance packages "but only conditioned upon their signing a full release. Ralphs set time deadlines for plaintiffs to accept or reject the severance packages."
That despite assurances to the contrary, the merger was led by Food 4 Less, not by Ralphs, and therefore favored Food 4 Less employees over longtime Ralphs employees.