As previously discussed in the June 2009 issue of the Immigration eAuthority, the Racketeer Influenced and Corrupt Organizations Act (RICO) is largely thought of as a law designed to combat activities of organized crime enterprises, a reasonable conclusion since it was enacted as part of the Organized Crime Control Act of 1970. RICO allows for civil actions against persons or entities that engage in a pattern of racketeering activities. In 1996, Congress extended the reach of RICO to violations of federal immigration law. So, can RICO potentially result in liability to a company that uses undocumented workers? Under certain circumstances, the answer clearly seems to be “yes.” Furthermore, a RICO claim might support a class action against an employer.

In the case of Williams v. Mohawk Industries, Inc., it was recently reported that flooring manufacturer Mohawk Industries, Inc. has agreed to pay $18 million to settle claims of employees who alleged that the company engaged in practices prohibited by RICO that resulted in its hiring of illegal workers. Such hiring was alleged to result in depressing the wages of Mohawk’s legal workforce. If given final approval, the settlement will end six years of litigation.

In another case in the Eleventh Circuit Court of Appeals, the court reversed the district court’s dismissal of the RICO claim filed by employees of Prime Inc., the operator of a Ruth’s Chris Steak House franchise in Birmingham, Alabama (see Edwards v. Prime Inc. dba Ruth’s Chris Steak House). The plaintiffs alleged that Prime knowingly hired and employed illegal aliens, allowed them to work under the names of former Ruth’s Chris employees who were U.S. citizens, and provided them with the former employees’ social security numbers.

The second case further demonstrates that courts are willing to support civil RICO claims of employees alleging damages resulting from the employment of illegal aliens by employers in certain circumstances. Employers need to be mindful of the hiring practices of supervisors and managers to ensure no activities are taking place that might put the employer at risk of such a claim.