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Food Lion Settles Child Labor Complaints

August 3, 1993

WASHINGTON (AP) _ The Labor Department and Food Lion Inc. announced a $16.2 million settlement today over allegations that the supermarket chain violated child labor and overtime pay laws.

Although the supermarket chain admitted no violations, the department said its investigation, which covered 85 stores in 12 states, showed ″widespread and extensive...violations″ involving tens of thousands of workers.

The agreement is the largest settlement ever reached by the Labor Department with a private employer over a wage and hour dispute.

Under the settlement, announced by Labor Secretary Robert Reich, Food Lion, which operates grocery stores in 14 states, must pay $13.2 million in back wages to current and former employees because of past overtime and minimum- wage violations, the Labor Department said.

Thomas P. Williamson, a department solicitor, said that under the agreement between 30,000 and 40,000 current and past employees of the supermarket chain will be eligible to receive back pay. Officials said they could not say how much money each worker would get. The chain has approximately 66,000 employees.

The supermarket chain, which is based in Salisbury, N.C., has agreed under the settlement to also pay $2 million in civil penalties arising from the overtime violations and $1 million in civil penalties for child labor violations.

″A record settlement of this magnitude sends a clear signal that the Clinton administration is committed to vigorous enforcement of the federal laws that protect workers from unpaid overtime and minimum-wage abuses and that protect minors from unsafe working conditions and excessive hours,″ Reich said today in announcing the settlement.

Food Lion, in a statement, did not acknowledge wrongdoing, but said it decided to resolve its dispute with the Labor Department ″rather than spend considerable resources and years in litigation.″

The settlement concluded eight months of intense negotiations between the department and the supermarket chain over allegations, first brought by a union trying to organize the company’s workers, that employees have been required to work ″off the clock″ in violation of federal wage and hour laws.

Separate allegations, also covered by the settlement, accuse Food Lion of requiring teen-age employees to work near unsafe equipment such as bailers and cutting devices.

Food Lion in the past has denied the allegations.

The settlement was the largest ever by the Labor Department of a private employer involving wage and hour disputes. Previously, in 1987, Hudson Oil agreed to pay workers $6.8 million in back pay in an overtime dispute.

Food Lion is one of the fastest growing supermarket chains in the country, with nearly 1,000 stores in 14 states.

The investigation involved complaints from the United Food and Commercial Workers Union. The union for years has been trying unsuccessfully to organize Food Lion workers.

Food Lion repeatedly has denied the charges, maintaining that working ″off the clock″ is against company policy and that the allegations stem from a misunderstanding of its work scheduling practices.

Food Lion also has been accused of violating child labor laws after allegations that it has allowed teen-age employees to work near hazardous equipment such as package bailers and meat slicers.

Last December, Vince Watkins, a Food Lion vice president, said ″more than 90 percent″ of the allegations stemmed from 16- and 17-year-old workers ″putting cardboard into nonworking bailers″ in many cases before the federal government clarified its regulations about such equipment.

Watkins also denied violating the wage and hour requirements. He said there has been ″a lot of misunderstanding″ about the company’s scheduling system where workers are given a specific time to complete a task.

The union has argued that many of the tasks cannot be completed in the time allotted and a worker is forced to finish ″off the clock″ after having punched out, instead of earning overtime.

In recent months, the company sought to have both the child labor and scheduling issue combined into a single case.

Food Lion settled another case with the Labor Department in 1989 involving overtime complaints. In that case the department originally proposed fining the company $1.2 million, but settled for $300,000 and a promise by Food Lion not to repeat the infractions.

Food Lion also has been the subject of criticism after a television report last year that claimed unsanitary food-handling practices at some of the stores and that some stores sold spoiled meat that had been treated with bleach. The company denied selling spoiled meat and said its store conditions met sanitary requirements.

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