Immigration reform appears to have stalled yet again, but the legal implications for employers have not. Back in 2005 and again in 2006 there was a novel case in which legal employees used a law designed to target organized crime to sue their employer over its use of illegal employees. The case bounced around the court system for a few years, including a quick trip to the U.S. Supreme Court. It was settled this spring for $18 million.
When the case began, it didn’t sound any alarm bells for most employers because the allegations were fairly egregious: The employer supposedly recruited illegal employees at the Mexican border, shipped them by van to Georgia, provided them with fake work papers, and hid them from immigration enforcement officials during raids. Though some of your employees’ documentation might prove less than kosher if examined under a microscope, you certainly wouldn’t go to such extremes. But another case recently decided by the Eleventh U.S. Circuit Court of Appeals may cause the average employer greater heartburn. Grab a bottle of antacid, and read on.
Steak may not be a healthy choice, but criminal?
Prime, Inc., operates Birmingham’s Ruth’s Chris Steak House franchise — the perennial favorite of the business travel set. Seven former employees sued the franchise, claiming in part that it actively recruited illegal immigrants and provided them with illegal identification numbers that belonged to former legal employees. The case is still on the starting block, but the Eleventh Circuit was asked to decide whether the allegations (which haven’t yet been proven) are enough to keep it in court.
The employees’ claim is based on the Racketeer Influenced and Corrupt Organizations (RICO) Act, a federal law intended to allow victims of organized crime to sue for damages (think Jack Woltz suing Don Corleone for leaving a horse’s head in his bed). To sue under the RICO Act, you have to show that the accused engaged in an organized effort to commit at least two or more criminal acts. In this case, the employees claim that Prime violated several criminal provisions of federal immigration law.
The criminal provisions require more than unwittingly employing an illegal immigrant. In this case, the employees claimed several criminal violations. Specifically, they alleged that Prime:
- knowingly hired at least 10 illegal aliens during a 12-month period;
- encouraged illegal aliens to enter or reside in the United States; and
- concealed, harbored, or shielded illegal aliens from detection.
Distinguishing between a speeding ticket and murder
This is where we parse the technical but important distinctions between ordinary immigration violations (for which you can be fined) and criminal immigration violations (for which you may do hard time sporting an orange jumpsuit). The RICO Act applies only to the latter.
First, you can be fined for knowingly employing illegal aliens, but for the act to be criminal, you have to know that the workers were brought into the country illegally (as opposed to walking across the border of their own accord or staying beyond their welcome on a legal visa). In this case, the employees claimed that Prime knew it was hiring illegal workers, but they didn’t allege anything to suggest that it knew how they made their way into the country. Without that, there can be no criminal violation — and no RICO Act claim.
The employees’ second try fared better. For the act to be criminal, you have to “encourage or induce” an illegal alien to “come to, enter, or reside in the United States.” The employees alleged that Prime “encouraged or induced” the illegal employees by providing them with jobs and fake social security numbers (belonging to former Prime employees). Recognizing that mere employment is (thankfully) insufficient to “encourage or induce,” the court concluded that the added element of providing social security numbers was enough to push the act over the line into the criminal realm.
The third attempt — the crime of “concealing, harboring or shielding from detection” illegal aliens — is where the heartburn kicks in. To us, this conjures the image of rushing illegal employees out the back door or hiding them in the basement when U.S. Immigration and Customs Enforcement agents show up for a raid. The court apparently has a more creative imagination.
The court looked at two allegations: (1) that Prime gave the illegal workers fake social security numbers and (2)that it provided them with jobs. Again, the court held that doling out fake social security numbers was enough to be criminal. If it stopped there, we would lose no sleep. Our high-priced, much sought-after advice would be simple: Don’t hand out fake social security numbers to illegal employees.
But the court didn’t stop there. It went further to suggest that “knowingly or recklessly hiring illegal aliens probably is enough by itself to constitute concealing, harboring, or shielding [illegal workers] from detection for purposes of the statute.” Wow. That’s really broad — and it’s a felony. Our favorite quotes from Cool Hand Luke don’t seem so funny when it’s you on the chain gang.
After the court dropped that bomb, it then backed up and said it didn’t have to decide the issue because the fake social security numbers were enough. But we now have a sneaking suspicion about how the court might rule when it does have to make the decision. Knowingly employ illegal aliens, go to jail. Edwards v. Prime, Inc. (11th Cir., 2010).
I don’t look good in an orange jumpsuit
As the demographics of the workforce continue to shift, many employers find themselves in a bind. We expect that American-born employees will increasingly turn to the RICO Act to take out their frustrations over the increased competition in the workforce.
Both immigration and civil rights laws prohibit you from screening out foreign-born employees who have a legal right to work in the United States. Immigration law even prohibits you from requesting additional documentation from an applicant to prove his eligibility to work if he has any of the approved forms of documentation.
With the threat of criminal liability, the key is to beef up your immigration compliance procedures so you can show you did all you could and that any violations weren’t made “knowingly or recklessly.”