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News: Update - Court Decision Regarding Undocumented Workers

Update - Court Decision Regarding Undocumented Workers
On December 12, 2005, the United States Supreme Court decided to hear the appeal of Mohawk Industries, Inc. in a lawsuit brought by hourly employees who claim that Mohawk has violated the Racketeer Influenced and Corrupt Organizations Act (RICO) by knowingly hiring undocumented workers in an effort to drive down wages.

As I noted in an earlier posting, Mohawk Industries’ efforts to have the suit dismissed have been denied by the district court and the 11th U.S. Circuit Court of Appeals. The United States Supreme Court will now here the case and resolve a split among the circuit courts on the issue.
The case is one of several around the country in which workers say their employers are violating RICO by hiring undocumented foreign workers.

The issue that the Supreme Court has agreed to decide is whether the relationship between Mohawk Industries, the employer with its outside labor recruiters constitutes a racketeering enterprise as defined by RICO. The 11th Circuit Court of Appeals ruled that the relationship between Mohawk and the recruiters does constitute a racketeering enterprise. In a different case involving the same issue, the 7th Circuit Court of Appeals ruled the other way, (Baker v. IBP, Inc. (357 F.3d 685)).

(A case involving the same issue was settled earlier this month—apparently the first settlement ever in such a case. Fruit company Zirkle agreed to pay $1.3 million to settle claims that it violated RICO by hiring undocumented workers. The settlement received preliminary approval by the Court on January 20, 2006).

Briefs to the Supreme Court in support of Mohawk were due January 26, 2006 and those in support of the employees are due March 2, 2006. An argument date has not yet been scheduled.

The case is Mohawk Industries, Inc. v. Williams, No. 05-465. I will continue to post updates on the case.

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