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Can a U.S. corporation and agents acting on its behalf constitute an “enterprise” under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. ”1961-1969 (RICO)? If the answer is yes, U.S. corporations which use outside entities to carry out any of their business functions could find themselves liable under RICO for a broader range of corporate conduct than ever before, which would almost certainly have a chilling effect on U.S. business activities. So far, the Courts of Appeals have split when addressing this question. However, as is customary when there is a conflict in the Circuits on an important federal issue, the U.S. Supreme Court recently agreed to resolve this conflict in Mohawk Industries, Inc. v. Shirley Williams et al., No. 05-465, cert granted (12/12/2005), and will soon provide much-needed guidance.
Mohawk is one of several recent cases in which private parties have sought to hold employers liable for RICO violations where the employers allegedly, in conjunction with recruiters and staffing agencies, knowingly hired undocumented foreign workers. How did RICO, enacted in 1970 and designed to provide the government with a tool to eliminate the negative impact of organized crime on the nation's economy, come to be used as a civil tool for private parties seeking to enforce U.S. immigration laws? The answer lies in a little-noticed 1996 amendment to the RICO Act which opened the civil-action door for parties concerned about the growing dependence of certain sectors of the U.S. economy on low-skilled foreign labor and frustrated by the U.S. government's inefficient enforcement of its immigration laws. The expansion of civil RICO actions to include violations of immigration law has significant implications for all corporations and businesses, and not just those that must rely on a low-skilled and low-paid workforce. Employers who do not have, and follow, a comprehensive company immigration plan to ensure that their policies, contract terms, and communications with their employees and agents comply with current immigration and employment laws can find themselves at significantly greater risk not only of government sanctions, but also of the harsh financial penalties resulting from civil RICO liability.
A Broad Mandate by Congress
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