(CN) - Employees at a Ruth's Chris Steakhouse in Alabama won reinstatement of their class-action racketeering claim against the franchise for allegedly hiring illegal immigrants and supplying them with the names and Social Security numbers of former employees.
A class action accused the Birmingham restaurant of actively recruiting illegal workers, paying them in cash, and giving them the names and Social Security numbers of former Ruth's Chris employees.
The 11th Circuit in Atlanta reversed dismissal of the workers' RICO claim, saying the complaint "adequately pleads that the defendants encouraged or induced an alien to reside in the United States" in violation of federal immigration law.
Ruth's Chris had argued that the lawsuit only accuses it of knowingly encouraging or inducing illegal immigrants to work in the United States, not necessarily to live here.
"That argument borders on the frivolous," Judge Ed Carnes wrote. "Their ability to find and keep jobs depends to a considerable extent on improperly obtaining necessary documentation."
Employees also accused the restaurant of violating labor law by withholding a percentage of their tips for "the house" and pooling the rest of their tips, sometimes disbursing them to workers who weren't eligible to participate in the tip pool. Ruth's Chris managers also persuaded customers to reduce tips or not tip at all, and they occasionally clocked out workers while they were still working, the lawsuit claimed.
The complaint further accused the restaurant of discriminating against both black and white workers. A white employee named Kyle Edwards said the restaurant's management failed to stop black and Latino co-workers from harassing and threatening him, "out of fear of disrupting its supply of cheap illegal labor."
In addition to dismissing the racketeering claim, the district court also dismissed two of the state-law wage claims as pre-empted by the federal Fair Labor Standards Act, tossed Edwards' bias claim and blocked the plaintiffs from seeking punitive damages on their retaliation claims.
The 11th Circuit reversed dismissal of the RICO claim, upheld dismissal of the state-law wage claims and Edwards' discrimination claim, and dismissed the rest of the appeal for lack of jurisdiction.
"Our decision, like the complaint and the district court's judgment, is a mixed bag," Carnes wrote.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.