RANDALLS HAS AGREED TO PAY $2.5 MILLION IN EEOC CASE

GREG GATTUSO / Additional Reporting by Elliot Zwiebach

HOUSTON -- Randalls Food Markets here agreed last week to pay $2.5 million to settle a class-action complaint filed by the U.S. Equal Employment Opportunity Commission that alleged gender and racial employment discrimination at 50 Houston-area stores over a five-year period.

The EEOC alleged that Randalls failed to hire qualified black, Hispanic and female applicants for part-time entry-level jobs from 1988 through 1992 and failed to hire qualified black and female applicants for grocery management trainee jobs at its Houston stores from 1987 through 1992. The EEOC also alleged that Randalls' procedures for keeping employment records did not meet federal requirements.

Randalls, which operates a total of 120 supermarkets and combination stores throughout Texas and employs some 10,000, is the latest chain to settle discrimination charges. Last month, a group of black employees and job applicants charged Publix Super Markets, Lakeland, Fla., with racial discrimination just 10 weeks after it settled a sex discrimination lawsuit for $81.5 million. Also last month, a judge ruled that Dominick's Finer Foods, Northlake, Ill., must stand trial in a class-action suit brought by nine current and former female employees.

Within the last three years, other sex discrimination cases have been settled out of court by Albertson's, Boise, Idaho; Lucky Stores, a divsion of American Stores Co., Salt Lake City; and Safeway, Pleasanton, Calif.

The EEOC filed the complaint against Randalls last Wednesday in the U.S. District Court for the Southern District of Texas. The settlement was announced later that same day. It is subject to court approval before it becomes effective.

The EEOC said Randalls' agreement to settle the case does not constitute an admission that it violated any laws enforced by the EEOC.

Jim Sacher, regional director of the EEOC's Houston district, said Randalls has agreed to hire an accounting firm that will send claim forms to about 100,000 former applicants who were turned down for employment. Based on the returned forms, the EEOC will determine how many job-seekers qualify for the class.

Under the terms of the settlement, Randalls will offer three out of every five open jobs to qualified members of the class -- blacks, Hispanics and females -- over the next two years, until 5,200 good-faith job offers have been made, said the EEOC.

The company also said it would set aside 34 management-trainee posts for black and female candidates this fall.

Randalls will also offer monetary damages to qualified former applicants.

The amount of the settlement is based on the difference between the number of minorities and women in the area's population and the number of those people employed by Randalls, multiplied by $4.25 an hour (the wage rate in 1989), 20 hours a week and the four months an employee might stay on the job.

Ron Barclay, Randalls' executive vice president for human resources, said Randalls agreed to institute a refresher course for all hiring managers once a year "to reintroduce them to our hiring procedures and any new laws that have gone into effect since the prior year's meeting."

Over the last three years Randalls has introduced other new hiring and training procedures, Barclay said, including a review of EEOC regulations and other legal matters as part of a manager training program -- up to two years before those individuals are empowered to do any hiring, he noted; installation of human resources managers at high-volume stores to oversee recruitment and hiring; and posting of open positions at the front of stores where customers can see them.

Most of those new programs resulted from a proposed settlement with the EEOC in 1992 stemming from the 1989 charges filed against the chain, Barclay told SN. However, when the Clinton administration took office in 1992 -- just weeks before Randalls was ready to sign a settlement for $1.75 million -- new EEOC personnel opted to seek treble damages and raise the settlement to $6 million, which Barclay said Randalls was unwilling to pay. While Randalls contemplated legal action, a call from an EEOC regional attorney in 1995 began the process that culminated in last week's settlement for $2.5 million, Barclay said.