US companies sue competitors who hire illegal immigrants

One of the aspects of the debate on legal vs. illegal immigration regards the work performed and paid for by immigrants. Illegal immigrants are often accused of "taking" jobs from other people. The economic logic is that businesses avoid taxes and benefits and effectively avoid expenses incurred when hiring citizens or legal immigrants.

The United States has been accused of hypocrisy in cracking down on illegal aliens and not enforcing laws against employers who do the hiring. In many western countries, such as Great Britain and Italy, as well as the U.S., there has been discussion about why governments don't aggressively enforce laws regarding businesses who hire illegal immigrants.

Now in the U.S., some companies that follow the laws have decided they don't want to wait for the government to change it's enforcement policies. They are directly taking their competitors to court and suing them for violation of fair business practices.

Businesses and anti-illegal immigration groups said the legal action was an attempt to create an economic deterrent against hiring illegal employees.

"We see the legal profession bringing to this issue the kind of effect it's had on consumer product safety," said Mike Hethmon of the Immigration Reform Law Institute, a Washington D.C.-based group backing the efforts.

In the first of a series of lawsuits, a temporary employment agency that supplies farm workers sued a grower and a two competing companies on Monday.

Similar cases claiming violations of federal anti-racketeering laws have yielded mixed results. The California lawsuit is believed to be the first based on a state's unfair-competition laws, legal experts said.

Santa Monica-based Global Horizons claimed in the lawsuit that Munger Brothers, a grower, hired illegal immigrant workers from Ayala Agricultural Services and J&A Contractors. All the defendants are based in California's farm-rich Central Valley.

The suit alleges that Munger Brothers had a contract with Global Horizons to provide more than 600 blueberry pickers this spring, but nixed the agreement so it could hire illegal immigrants.

"Competitors hiring illegal immigrants is hurting our business badly," Global Horizons President Mordechai Orian said. "It's to the point that doing business legally isn't worth it."

With an estimated 11 million illegal immigrants in the United States, undocumented workers are a large part of the nation's work force.

But immigration law enforcement at work sites is limited. In fiscal year 1999, authorities arrested 2,849 people at work sites compared with 1,145 arrests last year, according to the federal Immigration and Customs Enforcement agency.

To prove competitors hire illegal immigrants, businesses could use public records involving prior violations, testimony from former employees who have worked alongside illegal immigrants, and recovered W-2 tax forms that show people working under fake names and Social Security numbers, said David Klehm, the lead lawyer for cases in Southern California.

Companies planning to file additional lawsuits include farms and factories that depend heavily on immigrant labor, Klehm said.

Legal experts said the cases could be difficult to win. Under the California statutes, plaintiffs must prove a competitor directly harmed their business.

"Unless you've got smoking gun evidence, it's hard to tie economic loss of one business to another's practices," said Niels Frenzen, a law professor at the University of Southern California.

He believes it is the first time the unfair-competition law has been used to target illegal immigration.

The Global Horizons lawsuit came after a settlement was reached in a Washington state class action suit involving employees of Zirkle Fruit Co. who sued their employer for driving down wages by hiring undocumented workers.

Based on federal anti-racketeering laws, the case was settled for $1.3 million in January after the 9th U.S. Circuit Court of Appeals overturned a lower court decision to dismiss it.

Howard Foster, the lead plaintiffs' lawyer in the Washington case, said he expects more such suits as business owners learn their competitors hired illegal immigrants.

"So many people talk openly about using false documents to assemble an illegal workforce," Foster said. "And when you have IDs with upside down numbers and backward pictures, you know they are fake."

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