Fifteen-years ago, one of the world’s largest carpet makers, Mohawk Industries Inc., agreed to an $18 million settlement with employees who asserted their employer hired illegal immigrants to depress lawful citizens’ wages. The workers had claimed, rightfully, that they received lower wages than employees at other companies in the northern Georgia region where Mohawk is based. The region is commonly known among Wall Street analysts as the “Carpet Capital of the World,” home to multiple carpet manufacturing plants.
On April 12, 2010, U.S. District Court Judge Harold Murphy granted a motion by Mohawk’s employees to preliminarily approve the settlement, effectively ending six years of legal wrangling. Mohawk’s insurer, Zurich American Insurance Co., agreed to pay $13 million of the settlement, with Mohawk contributing the remaining $5 million. The settlement allowed about 48,000 current and former Mohawk workers to claim financial awards. While Mohawk did not admit to the wrongdoing, the company also committed to training its employees about employment verification measures when required by state and federal law and to set up a hot line to report hiring violation allegations.
The 11th Circuit Court which reviews cases from Alabama, Florida and Georgia had earlier ruled that Mohawk could be considered an enterprise under the Racketeer Influenced and Corrupt Organizations Act, or RICO. The employees charged that the company violated RICO laws by conspiring with employment recruiting agencies to hire illegal workers who would agree to accept lower wages.
RICO is a federal law originally designed to fight organized crime. In 1996, Congress expanded the anti-racketeering law’s reach beyond organized crime to include violations of immigration law, such as the hiring of illegal immigrants. “We are very pleased with the settlement,” said Howard Foster, a Chicago-based lawyer for the employees, and a RICO specialist.
Knowingly hiring illegal aliens is a federal crimek. In 1986, the Immigration Reform and Control Act established what is known as “employer sanctions”, which made it illegal for employers to knowingly hire and employ illegal aliens. Congress incorporated civil penalties, generally in the form of fines, and a misdemeanor criminal offense for engaging in a “pattern or practice” of violations. In the same IRCA legislation, Congress made employers potentially liable for the preexisting crime of “harboring” illegal aliens. In 1996, the Illegal Immigration Reform and Immigrant Responsibility Act established a separate criminal offense for knowingly hiring of at least 10 illegal aliens known by the employer to have been smuggled into the U.S. IIRIRA also made harboring illegal aliens a prosecutable RICO offense. All well and good but the fines, if levied, are a tiny fraction of the guilty corporations’ multi-billion-dollar value. For example, in 2001 and 2003, the Department of Justice discovered 345 illegal aliens that toiled for Wal-Mart as night shift janitors. Subcontractors provided Wal-Mart with illegal aliens. At the time, Wal-Mart generated $288.2 billion in sales but paid out a paltry $11 million in fines.
Post-Biden is a good time to ramp up RICO and make the financial penalties for hiring illegal immigrants meaningful, i.e., painful. Before the Southwest border invasion and based on data that Pew Research compiled, an estimated eight million illegal immigrants were already employed in the U.S., many in jobs that Americans would do like construction, landscaping, forestry and hospitality. Add to the existing illegal alien labor pool, the 10 million-plus inadmissible aliens that arrived during the Biden open borders era will be seeking employment, some with work authorization that their parole status provides. RICO is a long, arduous climb for workers’ redress against illegal aliens’ labor menace. Each time the federal government brings criminal action against an employer who knew that his new hires were illegal aliens, a powerful message is sent that their employment will not be tolerated, and that same message should deter other employers from engaging in similar unlawful activity. Foster, however, believes Mohawk and the other large Georgia carpet mills continue to use massive numbers of illegal immigrants to depress wages. He promises to investigate and may bring new cases.
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