On January 6, 2004, current and former employees of Mohawk Industries Inc., a giant carpet and rug manufacturer, filed a class action lawsuit in the U.S. District Court Northern District of Georgia, alleging that Mohawk engaged in a massive scheme to hire undocumented immigrants for the express purpose of depressing employee wages.
In furtherance of their scheme, defendants were alleged to have: traveled to border towns to recruit undocumented immigrants to work in their plants, provided transportation and temporary housing to undocumented workers, turned a blind eye to obviously fake work papers, assisted undocumented workers in evading detection by law enforcement, hid workers during immigration enforcement raids, "recycled workers" (rehired workers under a different name that had previously been fired after being "discovered" to be illegal and unauthorized to work), and concealed the scheme by destroying documents. The plaintiff alleged that defendants' scheme violated the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961
et seq., and the Immigration and Nationality Act, 8 U.S.C. § 1324(a)
et seq. The plaintiff was represented by private counsel.
Mohawk moved to dismiss the case. The district court (Judge Harold L. Murphy) denied the motion with respect to the plaintiffs' RICO claims and the claim that the defendant was unjustly enriched by paying wages less than it would have been forced to pay, had it not hired undocumented workers. The court dismissed the plaintiffs' unjust enrichment claim with respect to having fewer workers' compensation claims on account of undocumented workers. Accordingly, the defendant appealed. The Court of Appeals for the 11th Circuit affirmed the decision with respect to the RICO claims, but held that all unjust enrichment claims should have been dismissed.
Williams v. Mohawk Indus., Inc., 411 F.3d 1252 (11th Cir. 2005). Subsequently, the U.S. Supreme Court vacated the opinion and remanded the case to the 11th Circuit for further consideration in light of
Anza v. Ideal Steel Supply Corp., 126 S.Ct. 1991, 164 L.Ed.2d 720 (2006).
Mohawk Industries, Inc. v. Williams, 126 S.Ct. 2016 (2006).
On remand from the Supreme Court, the 11th Circuit restated its prior opinion, with a slight modification.
Williams v. Mohawk Indus., Inc., 465 F.3d 1277 (11th Cir. 2006). Further review by the Supreme Court was denied.
On December 19, 2007, the plaintiffs moved to certify the following class: "All persons legally authorized to be employed in the United States who are or have been employed in hourly positions by Mohawk Industries, Inc., its subsidiaries or affiliates in Georgia at any time from January 5, 1999, to the present, other than Excluded Employees," where "Excluded Employees" were employees whose time at Mohawk had been limited to a specific list of facilities. The district court denied the motion on March 3, 2008, holding that the plaintiffs did not satisfy the commonality and typicality requirements. Fed. R. Civ. P. 23(a). Mohawk's operations, including its use of temporary employment agencies and wage-setting practices, were decentralized; rather than decisions being made on the corporate level, operations were conducted on a facility-by-facility basis, and so the plaintiff class lacked commonality. For typicality, some of the named plaintiffs did not work at facilities using temporary employment agencies, did not work at all of the facilities listed in the class definition, or lacked standing for injunctive relief. The district court also concluded that the proposed class would be unmanageable.
The plaintiffs appealed in March 2008 to the Eleventh Circuit, which vacated the district court's decision to deny the class certification on May 28, 2009. The Court of Appeals held that the plaintiffs' complaint did raise questions common to all members of the class and that the "atypical" plaintiffs' claims were based on the same legal theory. Because of the district court's conclusion about commonality, it erroneously concluded that the proposed class would be unmanageable. The appeals court remanded the case, instructing the trial court to consider "whether the common issues predominated over individual issues and whether a class action was superior to individual actions."
Williams v. Mohawk Indus., Inc., 568 F.3d 1350 (11th Cir. 2009). The defendants appealed to the Supreme Court, which denied the petition for cert on November 2, 2009.
On April 9, 2010, the parties proposed a settlement agreement to the district court. The agreement included a commitment from the defendants to conduct training regarding verification of employment eligibility and a settlement fund. The latter would start with an initial deposit of $12 million, and go up to $18 million as necessary. In addition to paying the named plaintiffs and individual class members (based on length of employment at Mohawk), the settlement fund would also be used to pay for settlement administration costs and attorneys' fees. The proposed settlement class was all employees who worked at Mohawk between January 1, 1999, and December 31, 2009. The district court granted final approval of the settlement on July 22, 2010, and entered judgment on August 19, 2010. The case subsequently closed.
Miles Chan - 07/18/2007
Lauren Yu - 03/31/2021
compress summary
