Fair Labor Fraud: The Peculiar Interplay of Civil RICO and the Federal Minimum Wage Act

 
By: James W. Crooks

 

This Note examines the interaction between the Fair Labor Standards Act (FLSA), which guarantees a minimum wage and overtime pay to most categories of employees, and the civil remedies of the Racketeer Influenced and Corrupt Organizations Act (RICO). In the past few years, plaintiffs have argued that employers commit mail fraud by mailing inadequate paychecks to employees, a predicate act that these plaintiffs argue creates civil RICO liability. Most courts confronted with these FLSA-based RICO claims have dismissed them, arguing that the FLSA’s detailed remedial scheme precludes a RICO remedy for this conduct. This Note examines the text and history of the two statutes, as well as case law on analogous interactions between RICO, the FLSA, and other employment laws, and determines that courts should not categorically dismiss FLSA-based RICO claims. Rather, judges should examine the conduct underlying the claims in each case to determine whether the defendant in fact committed mail fraud. If so, the judge should allow the claim to proceed as a RICO action, as nothing in either statute precludes such a result. By focusing on the conduct underlying the claim, judges can best carry out Congress’s intent to guarantee a fair wage for a fair day’s work.

 

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