April 10, 2002

Businesses Engaged in the Hiring of Illegal Immigrants Targeted Under RICO

On April 2, 2002, Tyson Foods, Inc., the world's largest producer, processor, and marketer of poultry-based food products, was sued under the Racketeering Influenced and Corrupt Organizations statute (RICO), the largest corporation to be sued under these laws for the alleged illegal hiring of undocumented workers. The implications of this type of suit can be far-reaching, and substantial.

Background

In December 2001, a 36-count indictment was returned against Tyson Foods in Chattanooga, Tennessee, for conspiracy to smuggle illegal workers to Tyson Foods processing facilities in the United States for profit. The indictment was the result of a two-and-one-half year undercover investigation conducted by the Immigration and Naturalization Service (INS) into the business practices of Tyson Foods. In addition to the INS, the United States Attorneys Office for the Eastern District of Tennessee, the Federal Bureau of Investigation, the Internal Revenue Service, the Department of Agriculture, the Department of Labor, the Social Security Administration, the Bedford County Tennessee Sheriff's Department, the Shelbyville Tennessee Police Department and the Tennessee Highway Patrol all participated in this investigation.

The indictment includes not only Tyson Foods, but also two corporate executives, a former Human Resources Manager, and four former managers, who are accused of conspiracy to import and transport illegal workers to Tyson Foods plants throughout the United States. The U.S. government cited fifteen Tyson Foods plants in nine states as having been involved in the conspiracy.

In an announcement regarding the indictment, INS Commissioner James Ziglar asserted: "[t]his case represents the first time INS has taken action against a company of Tyson's magnitude…..INS means business and companies, regardless of size, are on notice that INS is committed to enforcing compliance with immigration laws and protecting America's workforce."

The indictment charges that the culture of Tyson Foods encouraged the hiring of illegal workers to meet production goals and cut costs so that profits would be maximized. Furthermore, the indictment charges that Tyson Foods carried out a scheme by which the defendants requested delivery of illegal workers to work at Tyson plants in the United States, and aided and abetted the illegal workers in obtaining false documents so that they could work at Tyson poultry processing plants under false pretenses.

RICO and Treble Damages

A RICO lawsuit must establish an underlying crime and that a racketeering enterprise existed. While RICO may be the basis for criminal prosecution, it also provides avenues for civil prosecution. The likely plaintiffs in such a case would be U.S. workers alleging that they were denied employment opportunities because the employers, as a result of their illegal activity, employed others at below-market wages or abominable employment conditions. A plaintiff who prevails in a civil suit under RICO can win a penalty of treble damages against the defendants. This enormous price for violations is intended to serve as deterrence to employers from hiring undocumented workers. This type of lawsuit may begin to appear more often in industries with a high percentage of undocumented workers. If this type of RICO suit is successful, the logical extension may be suits against employers who recruit and bring foreign workers under the H-2A or H-2B programs, should those employers be determined to have engaged in criminal and/or fraudulent activity when recruiting, hiring, bringing, and/or employing those workers. Scrupulous compliance with Department of Labor and INS requirements for those programs will become indispensable.

In November of 2001, the Second Circuit Court of Appeals reinstated a RICO case against two cleaning companies over the alleged illegal hiring of undocumented workers. The decision reversed a district court’s dismissal of the case and provides potential in the pursuit of RICO cases.

While employer sanctions have played a role in deterring the hiring of undocumented workers, RICO cases will have far greater effect in its substantial cost to employers.