Undocumented Workers & New RICO Claims

A class action suit, between two cleaning companies, was recently reinstated by the U.S. 2nd Circuit Court of Appeals. Commercial Cleaning Services vs. Colin Service Systems, No. 00-7571. Commercial Cleaning Services filed a class action against its competitor Colin Service System, Inc. claiming that Colin illegally hired undocumented workers reducing its costs and allowing the company to underbid its competitors.

The claim alleges that Colin’s practices constitute unfair competition pursuant to the Racketeering Influenced and Corrupt Organizations statute (RICO). Other industries, including the agriculture and meat packing industries, may now encounter similar suits.

One of the key factors noted by the court will be Commercial Cleaning’s ability to allege that Colin had actual knowledge that the illegal aliens hired by the company were specifically brought into the country in violation of the RICO statute. This nexus appears to be imperative to a claim filed under RICO when the claim alleges unfair competition as a result of a company’s hiring practices that violate state and federal laws delineated in the RICO statute. As a result, a company’s practices in hiring the undocumented alien and the manner in which the company complies with its obligations pursuant to the employer sanctions provisions of the Immigration and Nationality Act are likely to be scrutinized.

Negligence in failing to complete I-9, Employment Eligibility Verification Forms accurately or not in "good faith" may also subject the employer to potential claims under RICO. While an employer cannot specify what documents an employee can provide to comply with I-9 requirements, it is to the employer’s benefit to ensure that originals of all documents are properly reviewed at the time of hire and I-9 documents are completed appropriately for all employees within the required timeframe.

This decision may allow more companies to allege an injury under RICO when a valid claim can be made that abuse of the immigration system has lead to unfair competition. In 1996 RICO was expanded to include immigration-related crimes. Specifically "racketeering activity" now includes any act which is indictable under several sections of Title 18 of the United Sates Code. Pursuant to RICO, the following sections may apply in cases involving employment of undocumented aliens:

• Section 1028 relating to fraud and related activity in connection with identification documents.
• Section 1425 relating to the procurement of citizenship or nationalization unlawfully.
• Section 1426 relating to the reproduction of naturalization or citizenship papers.
• Section 1427 relating to the sale of naturalization or citizenship papers.
• Section 1542 relating to false statements in applications and use of passports.
• Section 1543 relating to forgery or false use of passports.
• Section 1544 relating to misuse of passports.
• Section 1546 relating to fraud and misuse of visas, permits, and other documents.

These additions in combination with the court’s validation of this class action could be the beginning of additional efforts made in the private sector to catch companies employing undocumented workers and filing claims under RICO.