US companies that employ illegal foreign workers have long operated in a kind of lawless nirvana: the government seldom pursued them for breaking the law, and neither did private plaintiffs.
Now, that may be about to change: last week the government signalled an aggressive crackdown against companies that employ illegal immigrants, arresting more than 1,000 people in the largest such action in US history. In addition, US employers face legal action on a second front: private lawyers are using America’s tough anti-mafia law to target companies that employ undocumented workers.
But the success of this new two-pronged approach could be in the balance later today when the US Supreme Court hears a case that asks the fundamental question: can corporations be subject to the much-feared anti-mafia law, the Racketeer Influenced and Corrupt Organizations Act, Rico? And if so, under what conditions?
The case comes at a time of growing turmoil in the US over immigration, with Congress divided over whether to legalise millions of illegal workers or build a fence to keep them out. Large public demonstrations on the issue are expected across the country on May 1.
Today’s Supreme Court case could profoundly affect not just the private legal campaign against companies that hire illegals but also the government crackdown, which will use Rico as a weapon.
Michael Chertoff, the homeland security secretary, said last week the government would pursue companies that “promote the habouring and hiring” of illegal workers, “using a strategy that is tried and true because it has succeeded against other kinds of organised criminal groups”.
According to the US Chamber of Commerce, the case could have ramifications well beyond immigration: “Over the years Rico has been manipulated into a garden variety cause of action against companies,” says Robin Conrad, of the National Chamber Litigation Center, the Chamber’s legal arm, which filed a brief in the case arguing that Rico should be reined in.
The issue before the court today is whether Mohawk Industries, one of America’s largest carpet makers, can be subjected to Rico, one of the most powerful weapons under American law because it can impose both criminal sanctions and civil penalties, including treble damages and an award of attorney’s fees to successful plaintiffs.
The case arises from a class action lawsuit filed by legal Mohawk workers, claiming that the company conspired to depress their wages by hiring illegal immigrants. The suit claims the company conspired with outside recruiters to employ undocumented workers, including transporting them from the Texas border to the company’s plant in Georgia.
The justices will not consider the underlying facts of the case, only the more technical question: does Rico law apply to companies that work with outside contractors in this way? The dispute will centre on the language of the Rico statute, which says it “includes any individual, partnership, corporation, association or other legal entity, and any union or group of individuals associated in fact although not a legal entity”.
Does that include companies that work with third-party contractors? Or should the law be used only against gangs and organised crime families, as originally intended? In 1996, Congress tried to expand Rico to reach immigration violations: will the justices now effectively reverse that expansion?
The Chamber of Commerce says the case “threatens to convert a statute that was designed to deter organised crime into a tool primarily used to induce settlements from legitimate businesses that cannot risk either the possibility of being subjected to an award of treble damages or the reputational injury of being sued in federal court under a statute associated with racketeers and mobsters”.
Steve Yale-Loehr, professor of immigration law at Cornell University Law School, says the case “could set a precedent for the use of Rico in the immigration context and would certainly provide another arrow in the quiver of either private individuals or the government to use against companies that employ illegals”.
That, says Ted Ruthizer, an immigration law expert at law firm Kramer Levin Naftalis & Frankel in New York, could make employers “think long and hard” about the cost of hiring illegal immigrants.
