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RICO & Employing Illegal Aliens: Corporate Racketeers?

Posted by Frank Steinberg | Apr 27, 2006 | 0 Comments

Can corporate employers be held liable as “racketeers” under RICO, the federal Racketeer Influenced and Corrupt Organizations Act of 1970? That's a question that the U.S. Supreme Court is currently confronting. And it arises out of — what else would you expect these days? — the alleged employment of illegal immigrants. As reported today, Mohawk Industries allegedly used recruiters to locate and hire illegal immigrants. Current and former employees of Mohawk now are trying to sue on the basis that the company's arrangement with the recruiters unlawfully suppressed wages. So the dispute is about money. The practical question is: how much money? The legal question is: do they have a right to sue at all? If the case is allowed to proceed as a RICO action, and the plaintiffs win, they stand to recover triple damages plus their attorney's fees. So the financial stakes are high.

And if the plaintiffs succeed, the legal stakes are higher. Allowing employees to sue for alleged “racketeering” by their employers could significantly affect the employment relationship. And it would greatly increase the financial risks to employers.

The early report of the argument suggests that some of the Justices were skeptical of the plaintiffs' ability to pursue their case as a RICO claim. Reading judicial tea leaves is always an uncertain business, however. The Court's formal opinion, when released, will provide the definitive answer.

About the Author

Frank Steinberg

Frank is the founder and principal of Steinberg Law, LLC. A Jersey boy born and bred, he focuses on employment litigation and counseling, business litigation,  and aviation law. Following law school and a clerkship in the federal district court Frank spent his early career with large litigation ...

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