Category: Legal Topics

Mohawk RICO case dismissed by Supreme Court

In a one paragraph ruling, the U.S. Supreme Court has dismissed the effort by a class action lawyer to use the RICO law in order to sue Mohawk Industries for its use of illegal workers. It sent the case back to the Appeals Court level for reconsideration. The Supreme Court appears in effect to be rejecting the notion that RICO can be applied. If this is the case, a dark cloud is removed from over the heads of thousands of American employers who recruited undocumented workers. For those interested in the Court’s apparent reasoning, go to The White Collar Crime Prof Blog which discusses how the Supreme Court had problems with the expansionist use of RICO in another case.
I have covered this RICO strategy in several earlier postings.
Per Reuters, “The Supreme Court on Monday dismissed a case on whether carpet and floor-covering maker Mohawk Industries Inc. can be sued under the federal anti-racketeering law for allegedly using outside recruiters to hire illegal workers.’
The story continues:

In a one-paragraph ruling, the high court said the appeal was dismissed and that it should not have been granted in the first place. The court gave no explanation why, but the ruling did not decide the main issue. The justices also set aside a U.S. appeals court ruling that the Calhoun, Ga.-based company and the recruiters can constitute an “enterprise” within the meaning of the Racketeer Influenced and Corrupt Organizations Act. The justices sent the case back to the appeals court for more consideration in view of a different Supreme Court ruling on Monday in which it held that Ideal Steel Supply Corp. cannot sue rival National Steel Supply under the anti-racketeering law for allegedly underpaying New York sales tax. The court said the direct victim of the alleged racketeering violations is New York state, not Ideal.

In the Mohawk case, a group of current and former employees claimed in the lawsuit that the carpet giant engaged in the systematic hiring of illegal workers and it was done by entering into contracts with outside recruiting firms. Mohawk has denied the allegations.

The employees said they have been hurt because the hiring practices have depressed their wages and they seek triple damages, as provided under the anti-racketeering law. The case attracted attention because it had been before the Supreme Court at a time when Congress is considering a sweeping overhaul of immigration laws and the federal government has been attempting to crack down on companies that hire illegal workers. The anti-racketeering law was initially adopted in 1970 and designed mainly to fight organized crime. But the law has been used in a number of lawsuits against businesses, and in 1996 it was expanded to include violations of federal immigration law.

Analysis of employer liabilities over illegal employees

Risk & Insurance Magazine published an article by me on the current employer dilemma with regard to hiring of illegal immigrants: the workers are needed, but the practice is illegal. Employers hiring workers who live in the United States illegally risk fines and civil lawsuits. In addition, the huge size of the illegal work force is causing the workers’ compensation system in some states to deteriorate.
Here is the full text of the article:
The last time the United States tried to reform its immigration laws was in 1986. Now the economic stakes are a lot higher, and vastly more employers are at legal risk. Twenty years ago, illegal workers were mainly in agriculture. Because the 1986 legislation did nothing to prevent more illegal workers from entering the United States, and because the law also fell short in giving them a legitimate status regarding their employment, the reform efforts of 20 years ago are considered a failure.
Since then, the illegal U.S. work force has increased to 7.5 million persons, growing at a rate of 350,000 annually. This is about equal to the number of new legally authorized foreign workers who come each year. Employers large and small who hire illegal workers risk incurring heavy fines from federal immigration authorities. They also risk being targeted by new state laws and aggressive state attorneys general. And they risk private action law suits. Any of these actions can lead to financial ruin. In addition, employers, workers’ compensation insurers and state regulators are coping with the impact of the illegal work force on the workers’ comp systems, which have deteriorated under the weight of hidden employment practices and legal quandaries.

Continue reading Analysis of employer liabilities over illegal employees

RICO suit against Mohawk Industries heard by U.S. Supreme Court

I have previously blogged about how a Chicago based law firm is waging a legal fight against employers who hire lots of illegal workers, calling the practice a violation of the nation’s anti-racketeering law, RICO. Well, the Mohawk Industries case was heard this week by the Supreme Court. Mohawk along with other carpet manufacturers hires large numbers of Hispanics at its Datlon, GA, operations. I’ve been there: huge, faded but well staffed buildings on one side of town; a slice of flag waving America on the other.

The Washington Times ran an article about the oral presentation before the Court.
The article says that “Winning parties in RICO cases can be awarded triple damages — notably higher awards than winners in non-racketeering criminal cases. Congress expanded RICO in 1996 to include violations of immigration law.”
The article goes on:

Continue reading RICO suit against Mohawk Industries heard by U.S. Supreme Court

ICE raids an employer, IFCO, for hiring illegal workers

ICE woke itself up from its indifference and made a aggressively publicized enforcement raid on an employer, pursuant of IRCA, Immigration Reform and Control Act. The Washington Post reported that ‘Federal agents on Wednesday arrested seven current and former managers of IFCO Systems, a manufacturer of crates and pallets, on criminal charges, and more than 1,100 people were arrested on administrative immigration charges at more than 40 IFCO sites in the U.S.” This is more of a publicity stunt, because ICE likely has no real resources to make many raids, but the raid might well work to temper the enthusiasm of many employers for hiring undocumented workers and to drive many employers more underground. According to the Post, ICE has only 325 agents to cover the entire country. I expect that raids of this size — in many company sites, apparently — will be rare.
The last enforcement action of this magnitude may have been the Tyson case, which I have written about here. That ended in no convictions of the company, but only of fall guys.

Continue reading ICE raids an employer, IFCO, for hiring illegal workers

New Georgia law on undocumented workers S. Bill 529: worth a look

Georgia Governor Sunny Perdue signed Senate Bill 529, Georgia Security and Immigration Compliance Act, on April 17. This law includes some very interesting provisions which, in effect, codify the role of states in immigration status verification, employer and employee responsibilities, and the provision of public services to undocumented persons. The law surely contains some problematic language. However, I am impressed by the evenhandedness and reasonableness of many of the provisions. For instance, local law officials must be certified by the state in order to enforce federal immigration law; undocumented persons under 18 can presumably continue to receive public benefits; and persons 18 and over can continue to receive Good Samaritan services. There is a special section devoted to stemming human trafficking.
This may well become a model for other states. I have excerpted large sections of the law.
For a complete copy of the law, go here. For the summary provided by the Governor’s office, go here.
Governor’s Office fact sheet on the law: go here:
Excerpts from the law:

Continue reading New Georgia law on undocumented workers S. Bill 529: worth a look

Ten reasons why illegal immigrants should file income tax returns

The very well managed About.com site, by Jennifer and Peter Wipf, on immigration issues has has a checklist of reasons why it is in the interest of undocumented workers to file income tax returns. Bob Alcorn, a Dallas CPW, prepared the list. Here is a summary.
According to Alcorn, “Non-citizens who reside in the U.S. for more than 183 days [generally] meet the definition of a ‘tax resident,’ or a ‘resident for tax purposes.’ They are “subject to the tax laws as if they were citizens (with some minor differences).”
1. It’s the Law.
2. Proof of Presence
This proof may be required if and when any future guest worker program or amnesty provisions are made.
3. Proof of Spouse’s Presence and/or Spousal Relationship
Tax returns indicate your marital status (single, married, head of household), thus possibly later improving or proving a spouse’s eligibility for any guest worker or amnesty claims.
4. Proof of Dependents’ Presence and/or Relationship
5. Proof of Income and Self-Sufficiency
6. Possible Eligibility for Tax Benefits/Credits
Tax returns allow you to receive certain tax benefits – such as the Child Tax Credit, including the refundable portion of the Additional Child Tax Credit if you otherwise qualify.
7. Tax Payer Identification Number Eligibility
Filing tax returns provides a legitimate basis for getting an Individual Taxpayer Identification Number. Having a legitimate TIN is actually much less of a red flag than using a fake Social Security number at work or for finances and taxes.
8. Proof of Income as Basis for a Mortgage and Other Credit
9. Demonstration of Good Moral Character
In any immigrant legalization process, the applicant needs to demonstrate “good moral character.”
10. It’s Good to be Prepared, Just in Case

The Tyson Foods – illegal immigrant case: past and present.

Steve Striffler’s highly informative book, “Chicken: the dangerous transformation of America’s favorite food”, gives the story behind the indictment and trial of three Tyson Food executives for systematically hiring illegal Hispanic immigrants. I will relate in skeletal form the story. It starts with the arrival of a 20 year old man from Chihuahua into the U.S. in 1979, runs through the poultry industry boom in the 1990s, the federal indictment of and subsequent jury vote in favor of Tyson Foods, and a current effort to sue Tyson for RICO violations.

Continue reading The Tyson Foods – illegal immigrant case: past and present.

The “Real ID” program to catch illegal immigrants: Stalled? Dead?

This program, hatched by Congress last Spring to impose immigrant IDs through the states’ driving license systems, seems to be going nowhere, a reflection of the lack of serious thought put into the idea at the outset. I am presenting here a summary of the bill and excerpts of an information technology magazine article from 2005.
Homeland Security Watch has been monitoring progress and as of late January 2006 found the program to be in a near-complete mess, with wildly ranging estimates of costs and an array of opponents. Consider this: to make Real ID work, you need to get the Registry of Motor Vehicle Departments to not only get their individual IT systems up to snuff, but then to coordinate with a single national IT standard.
Now for a summary of the bill and an early analysis of the IT challenges….

Continue reading The “Real ID” program to catch illegal immigrants: Stalled? Dead?

Line up of endorsers of McCain guest worker bill

McCain’s bill calls for gradual conversion of undocumented workers to a legal status. It is free of the Rube Goldberg complexity and get-tough approach of proposals of Arizona Sen. Jon Kyl and Texas Sen. John Cornyn.
According to the Phoenix Business Journal

The U.S. Chamber of Commerce is teaming with top labor unions, other business interests and the U.S. Conference of Catholic Bishops in support of a guest worker program and legal way for undocumented workers already in the U.S. to stay in the country. Arizona Congressmen Jeff Flake and Jim Kolbe, as well as the Arizona Chamber of Commerce & Industry, behind the bill

Also behind the bill are U.S. Sen. Edward Kennedy (D-Mass.) are the Service Employees International Union, the second largest union, the Laborers International Union, the American, bishops group and the American Health Care Association. The Arizona state chamber also backs that guest worker effort. The ALF-CIO has taken a position in opposition to guest worker legislation.
The Republican National Committee (RNC) officially endorsed a guest worker program.

Other heavyweight business interests backing guest worker include the Travel Industry Association of America, Ford Motor Co., Eastman Kodak, DaimlerChrysler and the California Chamber of Commerce.

Go here to get a copy of the bill, Secure America and Orderly Immigration Act – S. 1033
The New York Times today carried a profile of Eliseo Medina, vice president of the Service Employees International Union, the nation’s second-largest union, and an advocate of Bush’s guest worker program proposal.