Eleventh Circuit Reinstates RICO Claims Against Steak House; Putative Class Alleges Illegal Workers Were Hired
The Eleventh Circuit Court of Appeals has determined that Ruth’s Chris Steakhouse employees in Alabama adequately alleged that their employers “encouraged or induced an alien to reside in the United States, and either knew or recklessly disregarded the fact that alien’s residence here was illegal,” thus stating the predicate act needed to bring a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO). Edwards v. Prime, Inc., No. 09-11699 (11th Cir., decided April 9, 2010). So ruling, the court reinstated the plaintiffs’ RICO claim against the parent company; its Birmingham, Alabama, franchisee; and the franchise owner and operator. The court did not reverse trial court rulings dismissing wage-related claims and claims of discrimination or retaliation.
The plaintiffs alleged that the defendants knowingly hired and employed illegal aliens, allowing them to work under the names of former Ruth’s Chris employees who were U.S. citizens and providing them with the former employees’ Social Security numbers. The defendants also allegedly “asked the illegal aliens employed in the restaurant whether they knew of any other illegal aliens who were interested in working there” and paid them in cash, preferring them over U.S. citizens. According to the complaint, the company gave its employees who were in the country illegally name tags showing names other than their own. The defendants argued that these allegations, that is, the prospect of working in a particular restaurant, did not provide any realistic incentive for staying in this country. “They insist that aliens could reside outside the United States and simply enter periodically as work is needed.” The court responded by stating, “That argument borders on the frivolous,” and cited case law indicating that the act of knowingly providing illegal aliens with Social Security numbers can “encourage or induce” them to reside in this country.
The court concluded, “The meat of the matter is that the amended complaint adequately pleads that the defendants encouraged or induced an alien to reside in the United States, and either knew or recklessly disregarded the fact that the alien’s residence here was illegal, in violation of § 1324(a)(1)(A(iv). It thereby states a predicate act of racketeering. And because the amended complaint also alleges that the defendants did that ‘far more times than two,’ it adequately pleads the pattern of racketeering activity necessary to state a RICO claim.” The court dismissed this interlocutory appeal for lack of jurisdiction as to issues other than those considered.
