The Los Angeles Times from Los Angeles, California • 65

2 I'urc IV Wednesday, June 4. 1986 CooAnfldce (Simce Dow Jones 30 Industrials x4Vorkers Win Bach Pay for Layoffs Without Notice Atari Settles Landmark Lawsuit Anderson, Clayton Sues 3 Firms, Cites 'Bust-Up' Plot labor Writer Writer June 3, 1966 r- "1000 1880 (High 1840 1 1820 lhill I 1800 1 1 I 1780 eo By HENRY WEINSTEIN, Timet In a landmark lawsuit settlement, Atari, once the nation's leading manufacturer of video games, has agreed to distribute more than $600,000 in back pay to about 500 former employees who lost their jobs in a massive layoff in 1983. The case stemmed from Atari's announcement on Feb. 22, 1983, that it was firing 1,700 California employees and moving most of its manufacturing to Hong Kong and Taiwan to lower production costs. The 537 employees potentially affected by the settlement were all laid off that day.

"They kept telling us how well the company was doing and then, bam, they laid us all off and moved our jobs out of the country," said Maria Carson, a former quality-control clerk and one of the plaintiffs in the case. She and 536 other former Atari employees each are eligible to collect $1,182.92 roughly the equivalent of four weeks' back pay under the settlement. "I believe it's the first time where an employer who failed to give advance notice of a layoff has had to give back pay," said John True of the Employment Laws Project of San Francisco, the lead lawyer for the plaintiffs. He announced the settlement Tuesday at a press conference in San Jose after Santa Clara County Superior Court planned tho layoffs as far bark as 1980. before the union organizing drive began.

Lawyers for the plaintiffs noted that this contradicted the company's public statements at the time of the layoffs. They asserted that Atari violated the California Labor Code and the state Business and Professions Code by concealing the layoff plans. The company filed a response asserting that it had no duty to give notice under California law. But Judge Stone rejected this argument, and the case would have gone to a jury if a settlement had not been reached. "This settlement, along with the court's earlier approval of our legal theories, means that employers will now have to notify their employees of planned layoffs or face the possibility of a costly lawsuit," said True of the Employment Law Project, a unit of the Legal Aid Society of San Francisco.

He said that Atari also will pay out $390,000 in legal fees as part of the settlement. Atari which bought the assets of Atari Inc. in 1984 and no longer manufactures video games, issued a statement saying it had settled the suit on "favorable terms," noting that the plaintiffs had originally asked for $13 million in damages when they sued in August, 1983. nies who have been approached as possible buyers" for Anderson, Clayton businesses. McDonald declined to provide details.

Anderson, Clayton also alleged that a former employee of the company's banker, Manufacturers Hanover, who received confidential information about the company, now works for Bear. Stearns. The Houston food company also said that the bidders violated federal securities laws by failing to make full disclosures about their stock purchases and charged that Quaker Oats violated federal securities laws "for failing to make any filings (with the Securities and Exchange Commission, even though it is obviously acting in concert with the others." Declined Comment In New York, a spokesman for Bear, Stearns and Gruss had no comment on the lawsuit. Quaker spokesman Ronald Bottrell said the lawsuit was "a bit hasty," adding that "we hope that after they have a chance to reflect on the charges, they will withdraw them." Anderson, Clayton also alleged that a combination of Gaines with Quaker would violate antitrust laws, since Gaines has 45 of the moist dog food market and Quaker's Ken-L-Ration has 28. However, Quaker Oats said it does not believe that a Gaines acquisition would raise antitrust problems, since moist dog food accounts for only 4 of the $3.1 -billion dog food market.

As previously reported, Bear, Stearns and Gruss said their offer depends on Anderson, Clayton's abandonment of its recapitalization plan. At the special shareholders meeting in Houston on Tuesday, W. Fenton Guinee, Anderson, Clayton's president and chief executive, said that the company's board of directors "will consider any valid, real, unconditional offer" but that "there isn't any unconditional offer available to the shareholders of Anderson, Clayton." By DENISE ELLEN Timet Stall Anderson, Clayton a Houston food company, has alleged in a federal lawsuit that two New York investment banking firms and Quaker Oats used confidential information to devise a plan to "bust up" the company. Anderson, Clayton, the maker of Gaines dog food, Seven Seas salad dressing and Chiffon margarine, is fighting a $655-million takeover announced last week by two investment firms. Bear.

Steams Co. and Gruss Co. The investment firms plan to sell Anderson, Clayton's Gaines dog food business to Quaker Oats to help finance the $54-a-share takeover deal. Details of Anderson. Clayton's lawsuit were disclosed Tuesday as its shareholders began voting on a $45-a-share recapitalization plan that, if approved, could derail the Bear, Stearns and Gruss offer.

Anderson, Clayton said it will not know the results of the voting until all the proxies are in Thursday. In the suit, filed in federal court in Houston. Anderson, Clayton said it gave confidential information about Gaines to Quaker Oats this spring after Quaker expressed interest in buying Gaines. Quaker did not make a firm offer for the dog food business at the time, Anderson, Clayton said. Allegedly Used Information Anderson, Clayton charged that Bear, Stearns and Gruss later approached Quaker with a plan to buy the whole company, and sell off chunks of it as part of a "bust-up scheme." Bear, Stearns and Gruss used confidential information obtained from Quaker Oats to devise their $54-a-share bid, Anderson, Clayton alleged.

Bear, Stearns and Gruss have said they have no plans to sell off any other Anderson. Clayton businesses, although they have not ruled out the possibility. However, Don C. McDonald, legal vice president of Anderson, Clayton, said in a telephone interview Tuesday that "we've heard from other compa BRIEFLY Blair Agrees to Merge With a Steinberg Unit By PAUL RICHTER, Times Stall NEW YORK-The marketing and broadcast firm John Blair seeking to elude a magazine publisher's hostile takeover bid, said Tuesday that it has agreed to be acquired by a unit of corporate raider Saul P. Steinberg's Reliance Group Holdings.

A source close to Blair said the Reliance Capital Group offer is worth about $300 million, or $31 a share, including what shareholders will receive in shares of Blair's ADVO-System coupon marketing unit, which is to be spun off as part of the deal. Closely held magazine publisher Macfadden Holdings last April offered $25 a share in cash for all outstanding shares of Blair, which owns five TV and four radio stations and is the largest advertising sales representative for independent TV and radio stations. In a statement, Blair President Jack Fritz said the Reliance offer would provide shareholders "superior value to the highly conditional offer" of Macfadden. He said Blair, which owns two Spanish -language television stations in Puerto Rico and one in Miami, was "well suited" to be acquired by Reliance, which owns KVEA-TV Channel 52 in Los Angeles. Macfadden President Peter Callahan was meeting late Tuesday with lawyers and financial advisers Judge Peter Stone gave preliminary approval to the pact earlier in the day.

The ex-employees' suit asserted that although officials of Atari and its then-parent company, Warner Communications, had planned the shutdown long in advance, they gave workers no notice of the impending layoffs. On the contrary, the suit asserted, workers had been told that their jobs were secure until at least 1985. Downturn at Warner At the time of the layoffs, the San Jose-based glaziers' union was waging an organizing drive at Atari. The union claimed that the layoffs were made in response to its campaign. (In November, 1983, about 200 of Atari's remaining video-game workers voted not to be represented by the union.) The company retorted that the layoffs were a matter of economic necessity, noting that the dismissals came Just one week after Warner said a downturn in video game sales had led to sharply lower profits in the last quarter of 1982.

The union accused Atari of unfair labor practices, but the National Labor Relations Board declined to issue a complaint. Union organizer Ed Jones said one of the reasons for the labor board's decision was that Atari had said it had Writer to consider how to react to the proposal. "We're still considering what they've put on the table and what we might do in return," spokesman Michael Boylan said. The publishing firm is based in New York and owns True Confessions, Teen Beat and Modern Romances magazines. A source close to Blair said the cash portion of the deal was worth about $19 a share, the debentures $7 a share and the ADVO shares about $4 each.

However, the market may place a lower valuation on the debentures and the ADVO shares. Blair stock closed at $28.25 a share in composite trading, up $1.75 a share. Blair's statement said the offer is subject to several conditions, including the tender of 51 of Blair's shares and Reliance's raising money to finance the transaction. Reliance's financial adviser, Drexel Burnham Lambert, has said it is confident that it can raise the money. William Suter, analyst with the Merrill Lynch brokerage in New York, said the offer "seems like a pretty good one." The takeover threat emerged after Blair, not long ago among the highest flying of media stocks, blundered in a heavily leveraged campaign to expand ADVO.

As its stock price plunged, the company lost $31 million on revenue of $631 million in 1985. Francisco and Los Angeles has recently been in creative and management flux as it attempts to downplay its overnight-celebrity image and promote its hands-on abilities. In the process. ChiatDay, whose haul monde advertising style prompted adoring fans to steal the Nike bus shelter placards of Olympic athletes, seems to have lost some of the luster that came with dozens of awards, industry analysts say privately. The agency continues to draw big-name clients, however, including Porsche, Maxicare Health Care Plans and California Cooler, who bring with them several million dollars in advertising billings.

(Billings are the cost of advertising placed through an agency. The agency typically is paid 15 of billings.) In the last year. ChiatDay has undergone at least three executive shake-ups that took away much of the autonomy of its three offices and concentrated oversight in the hands of Fred Goldberg, an ex-Young Rubicam advertising executive ho had been general manager of ChiatDay's San Francisco office. For his part. Rob Sirasser, a Nike vice president, said the parting with ChiatDay was rord.il.

They did a good job, but we felt we needed more ronsirtency and more day -to-day contact" with the agency. StrasMT sa4 "We ell a 4ftttj of prodjct We need Jan agency that formed on rui and bo.ii cf our prodjeta Now York Volume Millions of shares WEEK ENDED MAY I I I 9 116 I 23 I 30 I 6 Market Rallies in Late Trading; Dow Gains 8.48 From Times Wire Services NEW YORK-The stock mar ket, encouraged by hopes of lower interest rates, chalked up a modest gain after posting losses for most of the day Tuesday. The Dow Jones average of 30 industrials, which had dropped back 14.76 points Monday, rose 8.48 to close at 1,870.43 in lackluster trading. Volume on the New York Stock Exchange slowed to 114.71 million shares from 120.59 million on Monday. Analysts said investors were encouraged by a rally in the bond market that picked up following a remark by Treasury Secretary James A.

Baker III indicating that the long decline in interest rates may not be over. Concern Over Rates Recent reports pointing toward a strong economic performance in the second half have led to fears that interest rates might stabilize or even begin rising if the Federal Reserve Board moved to inhibit the return of inflation. This prospect contributed strongly to Monday's stock market decline, which was aggravated by computerized program trades-buying stock index futures contracts while selling "baskets" of individual stocks. On Tuesday, however, Baker was quoted as saying in Boston that "the improved economic environment provides scope for further declines in interest rates." Among the most active shares on the New York Stock Exchange was John Blair up at 28 V. The company was reported to have entered into an agreement to be acquired by Reliance Capital Group, a private investment partnership managed by a subsidiary of Reliance Group Holdings.

Insurance Stocks Dive Insurance stocks were down sharply in the wake of proposed Florida legislation to roll back premium rates. Travelers Corp. was down 1 at 4971. Sperry was up V4 at 74T, upVi at 244 and IBM up V4 at 1524. ITT was off to 46H.

Financial issues were mostly down. First Boston was down 1 to 55H. J. P. Morgan was off to 87.

Digital Equipment was down i at 90H. while Texas Instruments was off 2 at 136. Eastman Kodak was up IT at 61 14. Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market totaled 134.66 million shares. Large blocks of 10.000 or more shares traded on the NYSE totaled 2X27.

compared to 1337 on Monday. In the secondary market for Treasury bonds, pnees of short-term governments rose 322 pexni. intermediate maturities rose 1712 point and long-term xssjtt vert up 1 12 pomta, accord to the investment faro of Salomon Brc. Yiekii on three-tnon'Ji Treasury bills were up one bass pant, ce one-hundredta of a percentage point, to 123. Sa-monlJj fca two tfci fxxms to C4S, one-year b-'i were off four btm pct-uatti3.

180 140 llll III If1- Paramount to Buy Trans-Lux Movie Houses By KATHRYN HARRIS, Times Staff Writer Paramount Pictures, already the owner of a large chain of Canadian motion picture houses, said Tuesday that it has agreed in principle to acquire 24 Trans-Lux theater screens for about $15 million. The deal signals Paramount's re-entry into U.S. exhibition after a 37-year absence. The company divided its movie-making and exhibition businesses in 1949 as the culmination of federal antitrust action. Paramount Pictures, which retained the production unit, was not barred from theater ownership under the consent decree that it signed.

(Nor were three other studios, Universal Pictures, Columbia Pictures and United Artists. Trans-Lux Chairman Richard Brandt said the sale includes one New York theater, the Gotham Cinema, which he described as one of Manhattan's eight or 10 "key houses" for opening significant motion pictures. Trans -Lux, based in Norwalk, has been in the exhibition business since 1931 but derives two-thirds of its revenue from the production of electronic teleprinters and ticker devices for the financial markets. If Paramount, a Gulf Western subsidiary, completes the acquisition, it will become the fourth movie distributor to invest in the exhibition side of the business in less than a year. Last month, MCA acquired 50 of Cineplex Odeon for about $159 million and Cannon Group announced plans to buy Commonwealth Theatres for $24 million.

Last January, Columbia Pictures Industries paid nearly $17 million to complete its purchase of Walter Reade Organization. LIQUOR Continued from Page 1 pro-consumer result." said Lloyd Constantine. the New York attorney. Twenty states, including California, have price-setting laws patterned after New York's. "I would assume this would call our law into question since it is essentially the same." said Manuel Espinoza.

assistant director for regulatory affairs of the Department of Alcoholic Beverage Control in Sacramento. No Similar Laws for Wine, Beer "If distillers are now free to base their prices on volume, it would have a potential for lower prices in the high-volume markets like LA." Espinoza said. The state has no similar pricing laws for wine or beer, he added Eighteen other states fix a price for bquor. and Tuesday's ruling indicated that those laws are invalid, too. California wine makers said they were happy to see the high court move to deregulate the alcohol beverage industry.

"This a another step toward a free-market operation," said John De Luc a. president of the Wine Institute in San Francisco. In recent yean, he noted, the justices have struck down rveraJ rate laws that relied on the 21st Amendment to reflate the wme and Itqjat r5jrry ChiatDay Loses Nike, Its Second Major Ad Account By JUBE SHIVER Times Staff Writer Metromedia and John Kluge bought 6.5 of Orion. The equivalent in common shares and warrants were reported purchased for investment purposes by Metromedia and its chairman, Kluge. As reported to the Securities and Exchange Commission, the interest includes 105,240 shares bought at $13 each on May 22 and 532,260 stock purchase warrants bought at $7 each the same day.

Viacom International earlier this year acquired stock and warrants for the equivalent of 29 of Orion. General Dynamics got a new missile competitor. The Navy has qualified Raytheon a major competitor to General Dynamics in building tactical missiles, to become a producer of its Standard Missile 2, a ship-to-air weapon. General Dynamics' Pomona division has been a sole source producer of the weapon. The Navy plans to buy 2,000 of the missiles annually through 1995.

Last year, General Dynamics received $330,000 per missile. Raytheon has told the Navy that it can build the missiles for less. Libya is refusing to sell its minority interest in Fiat. The head of Fiat admitted that he has been unable to convince Libya to sell its 13 of common voting shares and 15 of non-voting shares in the Italian industrial giant or remove directors that represent a Libyan firm suspected of terrorist links. But Fiat Chairman Gianni Agnelli said he hopes to offer legal guarantees that Libyan leader Col.

Moammar Kadafi would not benefit from contracts that may be awarded to Fiat under President Reagan's Strategic Defense Initiative program, commonly known as "Star Wars." Time Inc. has offered to buy Science 86 magazine. According to the American Assn. for the Advancement of Science and Time Inc. sources, Time offered about $5 million for the award-winning but money-losing magazine.

In addition to Time, Life, Fortune and other publications. Time Inc. publishes Discover also an award-winning but money-losing magazine in the troubled science magazine field. The company is also reportedly seeking to buy Scientific American magazine. In addition to Time, an unidentified publishing company and a group of Science 86 employees are also negotiating to buy the magazine.

Los Angeles will lead the nation in new jobs. The National Planning Assn. said the Los Angeles metropolitan area will have the most new jobs between now and the year 2000. followed by the Boston metro area. There are expected to be just over 26 million new jobs available for Americans by 2000.

the study says. The Planning Assn. study anticipates that Los Angeles will add just over 1 million new jobs for a total of 5.3 million in 2000. But the association, an independent economic research group, said Boston will add nearly 755,000 new jobs for the second-largest growth, followed by Anaheim, San Jose and Phoenix. Consumer groups criticized banks on hidden fees.

Alan Fox. legislative director of the Consumer Federation of America, said full disclosure of all account fees and conditions is vital to consumers' ability to shop for bank accounts, but that banks do not make such information readily available. The group said a nationwide survey showed that the annual cost of interest -bearing checking, or NOW. accounts climbed 12.3 to $83 in the year ended in April. Non-interest checking account fees increased 3.3.

The consumer coalition wants new laws forcing banks to fully disclose terms and fees of all accounts. Construction contracts rebounded in ApriL According to a report by the F.W. Dodge division of McGraw-Hill Information Systems, the surge in construction contracting in April more than covered declines earlier in the year and put 19S6 activity 15 ahead of the 19S5 level for the first four months. Work began on $2417 billion of building projects in April at an annual rate, up 14.8 from March's yearly pace of $2167 billion, the report said. The Los Angeles-based ChiatDay advertising agency which rocketed to national fame by creating some of the most unorthodox and alluring commercials in recent memory has lost its second major advertising account in less than a month.

Nike the Beaverton. maker of athletic shoes and apparel, announced Tuesday that it was dropping ChiatDay and consolidating its estimated $10 million worth of advertising with the Wei-denKennedy agency of Portland. Ore. Nike's move was the latest in a siring of upheavals at ChiatDay. which on May 20 saw its biggest client, Apple Computer, lake its estimated $50 million in advertising business to another firm.

ChiatDay executives declined to comment Tuesday on the change. Weiden was Nike's original advertising agency when the shoe company was founded in 1979. but it had been handling only a small part of Nike footwear and apparel advertising since 1352. ChiatDay handJcd the much bigger Nike brand advertising account, including the much -touted "I Love LA" commercial with singer Rndy Newman. "It downl rjrprwe me; there have teen lots of rumors that perhaps Nke was unhappy," said Leonard Peartstem.

head of the Key Donna Fearisiern advertising agency of Loj ie. Ouat Day. when has XX rm-picym sfTires Sew Tort. San Uw said its stake in CBS lac to 177 from 17 by purchasing 4.1C3321 sham at pnees rarprg from $131 to $134J7 per share Great Atlantic A Pacific Tea Cw. ud rrti to acquire Sk-rH, the New Tort -based upermarket eham.

for $11 a share, or $64 mCwo Wtnrt Alrliae sad it rrw SIS fmtLion reverty pataer.ger Ruies in Kay. down from SO Vty. im.