New York Attorney General Eliot Spitzer announced a $3.2 million settlement
with Gristede's Foods, Inc. to resolve allegations of improper wages being paid
to grocery deliverymen who worked throughout its New York City supermarket chain.
The workers, who were hired through a delivery contractor, will receive a minimum
of $2.6 million in back pay and damages. Gristede's has agreed to hire the delivery
workers in-house and provide benefits, including health insurance, pension,
and vacation pay.
The settlement was negotiated jointly by the attorney general's office and
the National Employment Law Project (NELP), which had filed a federal lawsuit
in the United States District Court, Southern District of New York. The exact
amount to be paid to the delivery workers will be determined by the federal
judge. A maximum of $650,000 will be provided for private attorneys' fees and
"This agreement is vital because it provides these workers with compensation
for the wages that were owed and, more importantly, brings these jobs up out
of the underground economy. The delivery workers will now be Gristede's employees
just like the cashiers and the people stocking the supermarket shelves, thereby
ending an arrangement that denied these workers proper pay and benefits,"
The agreement covers delivery workers who worked in Gristede's stores between
1994 and 2002. During this time period, the delivery workers were hired and
paid through delivery contracting companies who assigned them on a full-time
basis to the Gristede's stores. Between forty and sixty delivery workers at
a time provided the services at Gristede's Manhattan stores. For most of the
time period involved, the workers were receiving between $70 and $95 per week
plus tips for a sixty hour work week, far below the required minimum wage for
tipped employees. The attorney general's office and NELP have sought to hold
Gristede's responsible as an employer for the delivery workers' wages even though
the company denied that it was the employer.
Under the settlement, the delivery workers in Gristede's stores will now earn
a minimum of $6.00 per hour exclusive of tips and will be eligible for benefits
provided under a union contract between Gristede's and Local 338 of the Retail,
Wholesale and Department Store Union.