Beware potential new source of lawsuits: Lawyers try RICO in discrimination case

Lawyers are always looking for novel ways to sue on behalf of employees. For example, they may try to apply to the workplace a law meant for an entirely different purpose. The goal: to get beyond damage caps set by the federal Title VII anti-discrimination law.

One such recent attempt involves trying to apply the federal Racketeer Influenced and Corrupt Organizations (RICO) Act—originally meant to combat organized crime—against employers.

If successful, such lawsuits could result in more than lost dollars: Managers and supervisors could go to jail.

Recent case: Paul Brown and some of his co-workers sued their former employer, a doctor and a business hired by the employer to process workers’ comp claims. They based their claims on RICO violations. They alleged that the defendants used e-mail, mail and phone lines to create false medical evaluations that were then used to deny workers’ compensation benefits.

A three-judge panel of the 6th Circuit Court of Appeals dismissed the case. Two of the judges believed RICO would apply only if the defendants used interstate communication to get the employees to rely on the allegedly false medical evaluations. But one judge disagreed, and the other two judges said the entire appeals court panel of judges could reconsider the case. (Brown, et al., v. Cassens, et al., No. 05-2089, 6th Cir., 2008)

Final note:
The defendants won the first round, but this case is sure to continue making its way through the court system. Other federal appeals courts have allowed RICO suits under similar circumstances.