ENGENDERING REFORM

ELLIOT ZWIEBACH

DUBLIN, Calif. -- There's a new sense of urgency regarding supermarket personnel practices.

A series of multimillion-dollar settlements by retailers operating in northern California -- stemming from charges of sex discrimination against female employees -- serves as a warning to the industry: Any company that overlooks women as potential management candidates risks heavy fines and a dash of negative publicity.

The industry's biggest wake-up call was last month's agreement by Lucky Stores, based here, to settle a class-action sex-discrimination suit for $107.25 million -- reportedly the largest such settlement ever in the food industry and the second largest in legal history.

Since entering a tentative consent decree in October 1992, Lucky has filled 58% of its entry-level management jobs with women. (For more on Lucky's case, see related story below.)

But related suits have hit several other companies operating stores in northern California, including: Save Mart Supermarkets, which agreed to a $6.5 million settlement; Albertson's, with a $29.5 million settlement; Fry's Food & Drug, which had a suit that became moot when Save Mart acquired Fry's in early 1989, and Safeway, with a suit still pending.

While the suits have focused on California, many operators around the country are watching closely and planning strategies because they believe the same charges could hit them.

The recent actions charged operators with channeling women into lower-paying positions in the delicatessen, bakery and nonfood departments. They contend supermarkets have failed to provide female employees entry-level management positions, as well as additional hours and adequate training to pick up additional hours or to pursue entry-level management positions.

What lessons can the industry take from the spate of lawsuits?

"What I say loudly is that the industry better take a really hard look at itself," Robert M. Piccinini, chairman and chief executive officer of Save Mart, Modesto, Calif., told SN. "Because if yours is a company with any number of employees at all, you can bet every class-action attorney will be out visiting your supermarkets.

"So everyone had better clean up his act and see what needs to be done because everyone is a potential target -- and there's not a chain in this industry that has the right balance of men and women in management."

That balance, based on the total population, should be close to 50-50, Piccinini said. "But when this industry started -- long before there were forklifts and pallet jacks -- women ran the front-end and men did the heavy work.

"So in the evolution of our industry, everyone in the retail grocery business is guilty of what they claimed we were guilty of," Piccinini declared.

Not everyone in the industry is likely to heed his warning, however.

"The companies I've talked to seem to have their heads in the sand," an executive of the United Food and Commercial Workers Union told SN. "When it comes to encouraging more females to move into management, they're either taking very, very minor steps or they're taking no steps at all.

All five retailers were sued by the same Oakland, Calif.-based law firm -- Saperstein, Mayeda & Goldstein -- which specializes in class-action suits based on sex and race discrimination.

According to Jack W. Lee, a senior associate with the firm, the attorneys are looking for more potential offenders, including supermarkets and other businesses in other parts of the country. "But we haven't located one yet to go after," he told SN.

The settlements in California should alert the rest of the industry that the old ways may no longer be acceptable, Lee said.

"People [in the food industry] will be looking over their shoulders now because they'll know other people are looking over their shoulders to make sure they make the right choices when it comes to personnel promotions and advancements," he explained.

"There have been a lot of informal criteria in the supermarket industry regarding promotion policies, and those will be eliminated. From now on, the tap on the shoulder will be reduced to writing, and the industry will come into the 21st century by adopting a more businesslike approach to promotions and advancement."

In defending its position, Lucky argued in court that men and women choose different career paths when given a choice of jobs. "On their job applications, we ask individuals what they're interested in doing," a Lucky spokesman said. "And men and women answer that question differently.

"We don't know why -- we're not sociologists. But as we said in court, we've honored those requests," the spokesman added.

A suit against Safeway, Oakland, is pending, though attorneys for the chain and the class of plaintiffs are "in heavy-duty settlement negotiations," Lee noted. "They hope to wrap things up early in 1994."

Safeway has had legal brushes over sex discrimination in the past, Lee pointed out. In 1981, to settle charges filed by the Equal Employment Opportunity Commission, the chain agreed to accept a five-year consent decree for its northern California stores. And in 1991 it accepted a three-year consent decree for its Seattle division that is still in effect.

"Safeway is no stranger to dealing with the numbers in these cases, and in many ways it's a little more sophisticated than the other food companies we've pursued," Lee said. "But whatever progress Safeway made during the years the decree in northern California was in effect, it's been backsliding."

Before the latest suit was filed against it, "Safeway had better affirmative-action procedures, with more female store managers on a percentage basis, than Lucky or Albertson's," Lee pointed out. "But even though its numbers looked better, Safeway fell far short in preparing female food clerks for management positions, with women representing 46% of all employees but only 10% to 15% of managers."

Safeway officials declined comment on the suit.

To gauge the impact of settlements by Lucky, Albertson's and Save Mart on the rest of the industry, SN talked with retailers in different geographical regions to determine how much they might be affected.

According to a top executive of a Southeast chain, "Of course it makes us nervous, even though we don't think we're doing anything wrong -- though we have had incidents where store managers demanded sexual favors from female clerks for better hours.

"Every time we read about something like the Lucky situation, the message comes across that we'd better be sure we're not doing anything like that. And I can assure you that at our next store managers' meeting, I will mention the Lucky situation and tell them it could happen to us.

"But we feel good about our company. We've promoted four or five women to store managers over the last two years, and we have several female assistant managers, plus female buyers in the office.

"We are very careful to offer equal employment opportunities, and we make sure, for example, that all our assistant managers know when we give aptitude tests for store manager positions. But at the same time we could be the best people in the world and still get hammered by a smooth-talking lawyer who gets in front of a jury and makes a case."

A West Coast operator said settlements like those in northern California "certainly send signals to every company, telling them that, if they haven't already done an intense self-examination of their policies, they ought to. Companies that don't are not carrying out their obligations to their shareholders.

"The amount of the Lucky settlement is enough to rock any company -- and enough to take many companies under. And if it can happen to industry leaders like Lucky or Albertson's -- both very sophisticated companies -- then anyone is vulnerable."

His company sends for copies of every judgment against other supermarket companies, he said, "and we use those decisions as a basis to review our policies to be sure we are insulated from the kinds of charges brought against someone else."

An East Coast operator said his company plans to study the Lucky settlement "and compare our circumstances to theirs as we continue to strive to recognize women and minorities at all levels of our organization."

A Midwest retailer told SN there is no way he could overlook the implications of the lawsuits, especially given the huge sum Lucky will pay. "That would definitely encourage me to ask whether we're doing all we should be doing," he told SN.

Tom Wenning, senior vice president and general counsel of the National Grocers Association, said NGA members are "always vigilant to the changing nature of the law, and cases like these make it clear they must continue to do all they can to provide equal employment opportunities."