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HR as mobsters: Supreme Court lets workers use organized-Crime law to sue their employers

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in Compensation and Benefits,Employment Law,Hiring,HR Management,Human Resources

The U.S. Supreme Court let stand a lower court ruling that a group of employees at a Georgia carpet company can use state and federal anti-racketeering laws to sue their employer, claiming it hired illegal immigrants in an effort to depress wages.

In most cases, civil lawsuits filed under the Racketeer Influenced and Corrupt Organizations (RICO) Act target organized crime and mobster business practices. But this new case opens the door to employees using RICO to target their employers for other types of illegal conspiracies.

In this case, the employees at Mohawk Industries claimed managers violated RICO by conspiring with employment agencies to recruit illegals to work in its Georgia factories for less than minimum wage, which depressed the wages of legal employees.

Mohawk pressed for dismissal even after lower courts had let the case proceed. The company argued that employees couldn’t use the RICO statute because its contracts with employment agencies didn’t constitute a racketeering enterprise and the nonimmigrant employees weren’t harmed by the alleged hiring of illegal workers. After a multiyear battle, the Supreme Court disagreed and sent the class-action case to trial. (Mohawk Industries Inc. v. Williams, 06-873)

Bottom line: Expect this case to encourage employees (and their lawyers) to become more creative in suing under the RICO statute.  

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