Grocery shoppers may clip coupons to curb costs, but what measures do the stores themselves take to bolster wealth? The managers of one Sacramento, Calif.-area grocer came up with an unscrupulous answer: dissuade employees from filing legitimate workers' compensation claims.
Maintaining an injury-free record to earn bonuses seemed like a good idea at the time, but the scammers didn't consider the ramifications of cheating hardworking employees out of benefits to which they were rightfully entitled.
Now Raley's grocery chain will pay out more than a half a million dollars in penalties and must also implement a training program to ensure that workers' compensation claim-handling protocols are followed in the future.
The case originated in 2007 in Amador County, where a Raley's employee complained that store managers tried to prevent the worker from reporting an injury. The local and state investigation led to misdemeanor convictions for two managers. Perhaps even more troubling, the probe revealed a problem extending beyond the two parties' transgressions. Investigators uncovered a pervasive practice of Raley's managers discouraging workers' compensation claims and expecting employees to use their personal health coverage to cover injuries incurred on-the-job.
District attorneys in Monterey, Sacramento, Placerville, San Joaquin, and Yolo counties joined in the investigation, interviewing more than 100 Raley's employees with the cooperation of the company's managers. Prosecutors decided the greatest impact — and thus best deterrent for future infractions — would be achieved by taking civil action against the company for unfair business practices.
Raley's has now agreed to pay $580,000 to settle the civil case brought on by the Calif. counties. As part of the settlement, the grocery store chain will adopt mandatory training for store managers, improve record keeping, and contract with a telephonic medical advice company to evaluate injuries and recommend treatment. It will pay $550,000 in penalties and $30,000 to train law enforcement investigators and auditors.
If Raley's does not clean up its act, then it will have to dole out even more. For violations within the next five years, the chain could face an additional $150,000 assessment. In an interview with The Sacramento Bee, Michael Teel, Raley's president and CEO, expressed disappointment in the allegations but emphasized the company's commitment to ensuring compliance moving forward.
Retailers are commonly targeted by fraudsters as well. See also: Supermarket Creep
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