## Facts

- Hourly employees of Mohawk Industries, Inc. sued individually and on behalf of a class, alleging their wages were depressed by Mohawk’s hiring and harboring of unauthorized workers.
- The complaint alleged Mohawk coordinated with outside recruiters and temporary employment agencies to recruit, transport, and employ unauthorized workers at Mohawk facilities in northern Georgia.
- Plaintiffs alleged the illegal hiring scheme increased the labor supply available to Mohawk, enabling Mohawk to pay lower wages to lawful hourly employees.
- Plaintiffs alleged the conduct constituted predicate acts under federal RICO based on immigration-related violations and that Mohawk was unjustly enriched through lower wage payments and fewer workers’ compensation claims.
- The district court partially denied Mohawk’s Rule 12(b)(6) motion to dismiss.
- On interlocutory appeal and after a Supreme Court vacatur and remand to reconsider causation in light of intervening precedent, the Eleventh Circuit reinstated its earlier analysis in part and modified it in part.

## Issues

1. Whether the complaint plausibly alleged a RICO “enterprise” distinct from Mohawk alone, based on an association-in-fact between Mohawk and third-party recruiters/agencies.
2. Whether plaintiffs plausibly alleged RICO proximate cause after intervening Supreme Court precedent requiring a direct relation between the racketeering conduct and the injury.
3. Whether the Georgia RICO claim was adequately pleaded, including causation and injury requirements under Georgia law.
4. Whether plaintiffs could maintain unjust enrichment claims based on allegedly depressed wages and allegedly reduced workers’ compensation claims.

## Decision

- The Eleventh Circuit reinstated its prior disposition in part and modified it in part.
- The court held the complaint sufficiently pleaded an association-in-fact enterprise between Mohawk and recruiting/temporary agencies for purposes of federal RICO at the motion-to-dismiss stage.
- The court held plaintiffs sufficiently pleaded proximate cause for wage-depression injuries under federal RICO, distinguishing cases where the plaintiff’s injury is derivative of harm to a more direct victim.
- The court held the Georgia RICO claim also survived dismissal as pleaded, consistent with Georgia causation and injury requirements considered on remand.
- The court held unjust enrichment based on wages should be dismissed and agreed the workers’ compensation–based unjust enrichment theory was properly dismissed.

## Legal Principles

- A civil RICO plaintiff must plausibly allege: (1) a RICO enterprise, (2) a pattern of racketeering activity, and (3) injury to business or property caused by the RICO violation.
- An association-in-fact enterprise may be pleaded where multiple entities are alleged to act together with a common purpose and coordinated course of conduct; at the pleading stage, detailed proof of structure is not required.
- RICO proximate cause requires a direct relation between the racketeering conduct and the asserted injury; claims are weaker when the plaintiff’s harm is contingent on injury to a different, more direct victim.
- Employees plausibly plead RICO proximate cause when they allege they were the direct targets of a wage-depression scheme and the alleged racketeering conduct directly increased labor supply used to depress their wages.
- Unjust enrichment is generally unavailable to recharacterize wages paid under an employment relationship as inequitable restitution, and it does not proceed where the claim conflicts with governing compensation schemes or lacks a sufficient factual basis.

## Conclusion

The Eleventh Circuit allowed the employees’ federal and Georgia RICO wage-depression claims to proceed past Rule 12(b)(6), concluding the complaint plausibly alleged an association-in-fact enterprise and a direct causal link between immigration-related predicate acts and depressed wages, while dismissing the unjust enrichment theories tied to wages and workers’ compensation.


Williams v. Mohawk Indus., Inc., 465 F.3d 1277 (11th Cir. 2006)