The federal courts continue to uphold claims under the Racketeer Corrupt Influenced Organizations Act ("RICO") that involve immigration violations. Under RICO, immigration violations now are considered one of the predicate activities that can constitute a "pattern of racketeering activity" under the statute. Civil RICO violations can result in treble damages and an award of counsel fees to the financial exposure from viable RICO claims can be substantial.
The first significant RICO development occurred on April 9, 2010, when the U.S. Court of Appeals for the Eleventh Circuit upheld the right of seven former employees of a Ruth's Chris Steak House franchise in Birmingham, Alabama, to pursue RICO claims alleging that the restaurant's owners knowingly hired illegal aliens and provided them with fraudulent Social Security numbers in order to depress the employees' wages. Edwards v. Prime Inc. d/b/a/ Ruth's Chris Steak House, No. 09-11699 (11th Cir. April 9, 2010).
Reversing a federal district court's dismissal of the RICO claim, the appeals panel said that the "plaintiff's allegations that the defendants knowingly supplied illegal aliens with jobs, fake identities and fraudulent Social Security numbers can be construed to violate the immigration law's proscription on ‘encouraging or inducing' an alien to enter or reside in the United States with ‘reckless disregard' as to whether the alien's conduct is illegal." By alleging that the restaurant owners did so "far more than twice," the Court found that the plaintiffs' complaint satisfies the RICO requirement of a "pattern of racketeering activity."
A second significant RICO development occurred on April 12, 2010, when Mohawk Industries Inc. agreed to pay $18 million to a class of legally authorized hourly workers. Williams v. Mohawk Indus. Inc., N.D. Ga., No. 4:04-cv-00003-HLM (order of preliminary approval April 12, 2010). The plaintiffs alleged that their wages at Mohawk's facilities in Georgia were depressed because the company violated RICO by hiring and harboring illegal workers in violation of immigration laws. The settlement, which Judge Harold Murphy preliminarily approved on April 12, 2010, entitles approximately 48,000 former and current Mohawk workers to claim awards from an $18 million settlement fund. A hearing to consider final approval of the settlement is set for July 22, 2010.
These and other RICO cases involving alleged immigration law violations underscore the significant legal exposure that can exist from an organization's failure to comply with U.S. immigration laws.