Supreme Court Dismisses Mohawk Case

Washington, DC, June 5, 2006--The Supreme Court dismissed a case on whether carpet and floor-covering maker Mohawk Industries Inc. can be sued under the federal anti-racketeering law for allegedly using outside recruiters to hire illegal workers. In a one-paragraph ruling, the high court said the appeal was dismissed and that it should not have been granted in the first place. The court gave no explanation why, but the ruling did not decide the main issue. The justices also set aside a U.S. appeals court ruling that the Calhoun, Georgia-based company and the recruiters can constitute an "enterprise" within the meaning of the Racketeer Influenced and Corrupt Organizations Act. The justices sent the case back to the appeals court for more consideration in view of a different Supreme Court ruling on Monday in which it held that Ideal Steel Supply Corp. cannot sue rival National Steel Supply under the anti-racketeering law for allegedly underpaying New York sales tax. The court said the direct victim of the alleged racketeering violations is New York state, not Ideal. In the Mohawk case, a group of current and former employees claimed in the lawsuit that the carpet giant engaged in the systematic hiring of illegal workers and it was done by entering into contracts with outside recruiting firms. Mohawk has denied the allegations. The employees said they have been hurt because the hiring practices have depressed their wages and they seek triple damages, as provided under the anti-racketeering law. The case attracted attention because it had been before the Supreme Court at a time when the U.S. Congress is considering a sweeping overhaul of immigration laws, and the federal government has been attempting to crack down on companies that hire illegal workers. The anti-racketeering law was initially adopted in 1970 and designed mainly to fight organized crime. But the law has been used in a number of lawsuits against businesses and in 1996 it was expanded to include violations of federal immigration law.