SHRM reports that the case was filed by current and former hourly employees of Mohawk Industries Inc. in January 2004 under federal and state racketeering statutes, alleging that Mohawk engaged in widespread recruiting and employment of illegal aliens with the goal of suppressing the wages of legal employees such as the plaintiffs.
According to the plaintiffs, Mohawk conspired with recruiting agencies to hire and harbor illegal aliens in a scheme to keep labor costs artificially low, the SHRM report said. Mohawk employees allegedly traveled to the Mexican border to recruit undocumented aliens who had entered the US in violation of federal law and transported them to Georgia so they could obtain employment at Mohawk. Upon employment, Mohawk provided them with housing.
The employees claim that Mohawk made incentive payments to employees and outside recruiters to locate the workers it eventually employed. According to the complaint, Mohawk employees sometimes assisted the recruiters by carrying a supply of bogus Social Security cards for use when a prospective or existing employee needed to assume a new identity.
The suit further alleges that Mohawk concealed its efforts to hire and harbor illegal aliens by destroying documents and assisting illegal workers in evading detection by law enforcement during searches and inspections at Mohawk’s facilities. The 11th US Circuit Court of Appeals stated that these alleged actions would violate several aspects of US immigration laws.
The district court ruled that the plaintiffs stated a viable claim under the federal and Georgia Racketeer Influenced and Corrupt Organizations (RICO) acts. The appellate court agreed, allowing a major racketeering case alleging intentional and systematic violation of the immigration laws by a large employer, to be pursued.
The Supreme Court has agreed to examine the issue of whether the association between Mohawk and its recruiters is an “enterprise” under federal RICO. For the statute to apply, there must be a criminal organization, which RICO refers to as an “enterprise.”
The 11th Circuit defined an “enterprise” as a group of persons associated together for a common purpose of engaging in a course of conduct. In the Mohawk suit, the plaintiffs allege that Mohawk and third-party temp agencies/recruiters conspired to violate federal immigration laws, destroy documentation and harbor illegal workers.
Mohawk, in its Supreme Court appeal, said, “The 11th Circuit’s ruling impermissibly relaxes the limitations Congress placed on the imposition of RICO’s harsh penalties.” Mohawk asserted that the district court and 11th Circuit have improperly made it easier for private RICO lawsuits to survive.