Wal-Mart made history last Friday, though probably not the kind of history it wants to be making.
Eight people employed to clean Wal-Mart stores sued Wal-Mart Corporation, along with nine other named defendants, in Federal District Court in New Jersey under the Racketeer Influenced and Corrupt Organization (RICO) Act (search).
What’s historic about the lawsuit is the basis of the complaint. Under certain circumstances private individuals, rather than the U.S. government, can commence a civil action against organizations engaged in ongoing criminal activity that causes them damage. In their complaint, the eight illegal immigrants who sued Wal-Mart (search) asserted that it was their employment relationship with Wal-Mart or its cleaning contractors -- a relationship that is consensual -- that constituted the ongoing criminal activity.
An individual’s use of the RICO statute against companies that hire illegal aliens is authorized by the 1996 immigration reforms.
To fans of "The Godfather," this would be like Frank Pentangeli using RICO to sue Michael Corleone. And that is an apt comparison, because RICO was designed to combat organized crime and its influence on labor. Now Wal-Mart, an icon of American business, finds itself the target of a RICO action.
The federal lawsuit has other features that may surprise Americans. Employment of illegal aliens is prohibited under the Immigration Reform and Control Act of 1986 (search), so each plaintiff has conceded in the complaint that he is without legal immigration status and is removable from the U.S. Nonetheless, each plaintiff asserts a right to pay, owed for work performed, that approximates that which a person with legal immigration status would have received for the same work, to include back pay and overtime.
Such claims are authorized under the National Labor Relations Act (search), which governs back pay claims for all people in the U.S. without regard to their immigration status. The Immigration Reform and Control Act of 1986 does nothing to restrict an illegal alien’s right to advance a back pay claim, in recognition of the strong American belief that all people should be paid for work they have done.
The New Jersey plaintiffs’ complaint reads like a novel. Some plaintiffs contend that companies created specifically to employ illegal immigrants and skirt employment laws hired them. They were generally paid $350.00 in cash for a seven-day workweek. Their employers withheld no payroll taxes, and as a result, they contend, paid nothing in the way of social security. Wal-Mart, they allege, was aware of these arrangements and actively conspired with plaintiffs’ employers.
To this writer’s knowledge, this case is the first in which plaintiffs cite their own employment relationship with defendants, which is a relationship that required the plaintiffs’ own ongoing participation, as the basis of a RICO claim.
There are many other potential plaintiffs that don’t labor under that disability, though. Citizens, green card holders, and U.S. companies that have been deprived of employment or business opportunities because of some employers’ practice of hiring illegal aliens have succeeded in civil RICO claims in the past.
In Mendoza v. Zirkle Fruit Co., (search) Chicago lawyer Howard Foster has succeeded in a RICO action against two fruit companies and an employment agency in the state of Washington, brought on behalf of two legally employed people. Recently, Foster won the right to proceed not only against the companies, but the companies’ individual owners.
“While the plaintiffs in the New Jersey case may see the RICO portions of their case against Wal-Mart dismissed, American businesses and citizens, and lawful permanent residents should not have the same problem,” says Craig Nelsen of Friends of Immigration Law Enforcement.
As Gilberto Garcia, the plaintiffs’ lawyer in the New Jersey Wal-Mart action recently said in an interview, his clients’ lawsuit is just as much about his own clients’ claims as “people on unemployment lines who should not be there.”
Matt Hayes began practicing immigration law shortly after graduating from Pace University School of Law in 1994, representing new immigrants in civil and criminal matters. He is the author of The New Immigration Law and Practice, to be published in October.