GRISTEDES SETTLES DELIVERY-WORKER CASE FOR $3.25 MILLION

DAVID GHITELMAN

NEW YORK -- Gristedes Foods here said last week it has agreed to pay $3.25 million to settle a lawsuit alleging the company underpaid delivery workers between 1994 and 2002.

According to the New York State Attorney General's office, which brought the suit jointly in January 2000 with the National Employment Law Project here, an advocacy group for low-wage workers, the delivery workers will receive a minimum of $2.6 million in back pay and damages, and a maximum of $650,000 will be provided for private attorney fees and costs. As part of the settlement, the Attorney General's office noted, Gristedes will bring the delivery workers, who were hired by an outside contractor, in-house, providing them with a $6-per-hour wage (exclusive of tips), along with benefits, including health insurance, pension and vacation pay.

The Attorney General's office also said it reached a settlement in the same suit with drug store chain Duane Reade here, which calls for that company to pay $320,000 in back pay and damages.

John Catsimatidis, Gristedes' chairman, president and chief executive officer, told SN he was not pleased with the settlement. "They were never our employees," he said of the delivery workers. He seemed even more displeased with the disparity between what Gristedes and what Duane Reade will pay. "Either they got a great deal, or I got a bad deal," he observed.

A&P, Montvale, N.J., whose Food Emporium subsidiary was a defendant in the original suit, settled in December 2000 for $3.3 million.