Mohawk Industries Settles Class Action for $18M

By Sarah Pierce

Illegal immigration continues to grow as a hot topic of debate in the United States. One of the hottest issues in this debate is how these undocumented workers affect the American workforce. No matter where you stand on the issue, you may find this recent class action settlement interesting in terms of a company’s responsibility in hiring illegal immigrants.

Georgia-based Mohawk Industries agreed to settle a six-year-old class action lawsuit by offering $18 million to 48,000 current and former employees who accused the carpet-and-flooring manufacturer of racketeering and using undocumented workers to deflate wages.

Employees in the class action suit accuse Mohawk of violating federal and state racketeering laws by conspiring with third-party recruiting agencies to transport illegal immigrants to Georgia, destroy their documents, and help the illegal workers evade detection by law enforcement. The employees claim Mohawk sought out undocumented workers because they are willing to work for less, effectively allowing Mohawk to decrease hourly wages for its legal workers.

One of the reasons this case is so interesting is because attorneys went after Mohawk for racketeering under the RICO Law (Racketeer Influenced and Corrupt Organizations), which is normally used by the federal government to target organized crime. Some legal experts believe if the courts agree with the RICO charge, it could make any company who uses an independent or third-party contractor unfairly liable for racketeering. Other experts, however, believe if the RICO charge isn’t upheld, it would make corporations unfairly immune to RICO liability if they use an independent contractor to carry out illegal hiring of undocumented workers.