Firm Settles Suit over Undocumented Workers

An apple-packing company in Washington agrees to a first-of-its-kind settlement over civil allegations that it hired illegal workers. The company will give $1.3 million in back pay to several thousand people it legally employed between 1999 and 2004.

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An apple packing company in Washington State is settling a lawsuit alleging that it hired illegal workers. The settlement is the first of its kind because the civil suit over illegal immigrants is based on the RICO statute. That's the Racketeer Influenced and Corrupt Organizations Act. It was designed to fight organized crime. Now, it's being used to go after companies that hire undocumented workers. Here's NPR's Jennifer Ludden.

JENNIFER LUDDEN, Reporting:

The class-action suit accused Zirkle Fruit Company of systematically ignoring blatantly forged work documents, even after the Social Security Administration told the company thousands of its employees' numbers were fraudulent. Chicago-based attorney, Howard Foster, claimed the fruit company did this so it could pay employees less. Now, if the court settlement wins final approval, Foster says the $1.3 million judgment will be paid to several thousand people who worked for Zirkle legally, from 1999 to 2004.

Mr. HOWARD FOSTER (Attorney in Chicago, Illinois): We will divvy up the money so that everybody gets some amount of money for their back pay. We would like to see as high as $2.00 an hour that's what I'm hoping. Which, we estimate is half the amount that their wages were depressed.

LUDDEN: Zirkle Fruit admits no guilt in the settlement. And the company's defense lawyer, Deal Reddick(ph), denies that top Zirkle officials knew any of the workers were illegal. He says Zirkle's average hourly rates are higher than competitors'. The real problem, Reddick says, is the vast industry of fake documents.

Mr. DEAL REDDICK (Attorney for Zirkle Fruit Company): This employer, along with others, are faced in the economy are having to deal with that. And, hopefully, Congress will come up with a system of identification that will be foolproof. But until they do, just like handling counterfeit money, all of us are going to be victimized if you will, by counterfeits and forgers.

LUDDEN: The use of RICO in these cases alleges that hiring illegal aliens amounts to harboring them. It claims companies conspire with their contractors or temp agencies to recruit unlawful workers. Right now, most employers take a hands-off approach, their labor contracts simply say the hiring agencies will abide by the law. Donald Benson, a labor lawyer with the firm of Littler, Mendelson, says if the RICO strategy succeeds it could dramatically change the way businesses operate.

Mr. DONALD BENSON (Labor attorney with Littler, Mendelson): These RICO lawsuits are a direct attack on that. But just saying it doesn't make it so. And if they can generate enough evidence they're gonna try to drag you into this conspiracy and make you liable for what someone else does.

LUDDEN: Benson's already issued a warning to his corporate clients that they may have to be more proactive to protect themselves. Meantime, attorney Howard Foster continues to pioneer this legal strategy with a number of cases across the country. In April, he'll argue before the U.S. Supreme Court in a case against a carpet manufacturer in Georgia. In recent years, Foster says dozens of legal workers have contacted him about suing their employers. Among them, fast food chains, meat packers and construction companies. He expects them to be encouraged by this week's settlement.

Jennifer Ludden, NPR News, Washington.

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