Why the West Side of the Causeway’s Silence on Raley’s Workman’s Comp Settlement?

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reisig-2009On Monday we learned that Raley’s has agreed to pay a settlement of $550,000 to resolve a case brought by the District Attorney’s offices in six counties including Yolo County, for illegal practices in handling workers’ compensation claims brought forward by injured workers.

The settlement was announced on Monday by the district attorneys from Yolo, Sacramento, Placer, San Joaquin, Amador, and Monterey counties.  Yolo County DA’s office will receive $100,000 as part of the settlement.

The Sacramento Bee covered this story on Tuesday, but neither the Davis Enterprise nor the Woodland Daily Democrat has picked up on the story.

The Bee reports that in addition to the $500,000 in penalties and costs, including $30,000 to fund training for law enforcement investigators and auditors, Raley’s “also agreed to provide mandatory workers’ compensation training for store managers, improve record-keeping and contract with a medical advice company to evaluate worker injuries and recommend treatment.”

Furthermore, the Bee reports, “The supermarket chain also agreed to an injunction prohibiting it from violating workers’ compensation laws, and to continue and expand improved practices for claims by injured workers.”

So why the silence by the DA’s office on their big victory.  To make matters more strange, the Yolo County DA’s office got the second highest amount of damages, in part because Raley’s operates out of West Sacramento, and yet the DA’s office never sent out a press release.  This despite the fact that the DA’s Office has made it a point to trumpet their crackdown on fraud.

Indeed on Tuesday, they sent out a press release about a Fraud Awareness Fair that will be held on July 8.  The release announce, “Together with local, state and federal law enforcement agencies, the District Attorney’s Office works in partnership with major corporations, banks, professional organizations and the West Sacramento Chamber of Commerce to present this educational event.”

It continues, “The fair will present and display the most modern and frequently found fraud schemes that victimize us all. Senior Citizens are particularly encouraged to attend.”

I bring up fraud in this context because fraud in fact was one of the main charges.  The case began in 2007 when Amador County DA Office along with the state Department of Insurance began investigating a complaint that a store manager had attempted to stop an injured work from filing a claim.  Two managers were eventually charged with multiple counts of insurance fraud.

According to the Bee’s report,

“Investigators said they acted on an anonymous tip and learned that the managers dissuaded injured employees from filing state workers’ comp claims in order to earn bonuses for themselves by maintaining the store’s injury-free record.

The Bel Air managers pleaded guilty to misdemeanor violations, resulting in community service, three years’ probation and fines totaling $15,000.”

Stemming from that case, further investigation revealed that this was far from an isolated practice and there were “widespread” incidents involving Raley’s managers dissuading or attempting to dissuade injured employees from filing claims. 

“Investigators said Raley’s managers pressed injured workers to file claims through their personal health insurance providers, instead of reporting workplace-related accidents and injuries, as required, under the state workers’ compensation law,” the Bee reported Tuesday.

Of course Raley’s is not accepting responsibility, the CEO sent out a statement stating that he was “disappointed and saddened with the accusations.”

“Although mistakes may have been made in the past, we’ve grown stronger as a company because of this matter. Raley’s fully cooperated with authorities from the very beginning of the investigation and immediately resolved any issues in our processes to ensure that all employees were equipped with the proper resources needed to comply with workers’ compensation regulations. I can assure you that we maintain high company standards for the health and safety of all our employees and customers — we continue to make that a top priority in our stores.”

The issue received a good amount of coverage in Sacramento.  It resulted in the awarding of $100,000 to the Yolo County DA’s Office.  So why the silence in Yolo County?  Is it because Raley’s is based in Yolo County and the local agency decided not to bring any negative press to the company at a time when it has just announced that it has issued layoff notices to 153 employees in its corporate headquarters in an effort to cut costs and be more competitive?

—David M. Greenwald

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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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8 thoughts on “Why the West Side of the Causeway’s Silence on Raley’s Workman’s Comp Settlement?”

  1. E Roberts Musser

    Is it possible that part of the settlement agreement was that neither side would talk about the case after the fact? This is pretty typical in settlement agreements (nondisclosure clause).

    The Fraud Awareness Fair is part of the DA’s ongoing efforts to educate the general public on consumer fraud, and has nothing to do with workplace issues.

  2. David M. Greenwald

    My point in mentioning that is the emphasis the DA’s office has placed on fraud juxtaopposed against the non-release of this issue.

  3. E Roberts Musser

    DMG: “My point in mentioning that is the emphasis the DA’s office has placed on fraud juxtaopposed against the non-release of this issue.”

    The non-release of this issue may be bc of a nondisclosure clause in the settlement agreement… these clauses are pretty typical in settlement agreements.

  4. David M. Greenwald

    Elaine: I don’t think so, look at the statement from Raley’s, that’s very specific. And Sac District Attorney’s office announced it, that’s how Sac bee got a hold of it.

  5. Superfluous Man

    I’m shocked nethier picked this story up. Not really though. Neither picked up the Skaggs/DA settlement, it’s what to expect anymore.

    They sometimes choose what to cover based on who is or already has covered the story, due to limited resources I suppose.

  6. E Roberts Musser

    DGM: “Elaine: I don’t think so, look at the statement from Raley’s, that’s very specific. And Sac District Attorney’s office announced it, that’s how Sac bee got a hold of it.”

    Depends on how the “nondisclosure clause” was crafted.

  7. David M. Greenwald

    Based on the available evidence, I’m going to assume that the DA had the ability to announce the settlement, how much of the details I don’t know.

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