One month after Mohawk Industries agreed to settle a long simmering lawsuit that claimed it hired illegal aliens in a bid to depress wages, employees of the giant floor-covering manufacturer are beginning to receive their claim forms.
One of the caveats to the settlement, which was approved by U.S. District Court Judge Harold L. Murphy of Rome, involves the number of claims that get filed.
Zurich American Insurance Co., which agreed to cover $13 million of the $18 million settlement, had stipulated that if more than 50 percent of the estimated 48,000 affected employees file legitimate claims, then it has the right to opt out of the settlement.
Such a maneuver would send the case right back to the federal courts, where arguments and briefs were heard more than six years before the settlement was reached.
Juan P. Morillo, an attorney with the Clifford Chance law firm that represented Mohawk, said after the settlement was reached that if Zurich American had not agreed to participate at the level it did, then Mohawk would not have settled the case. Mohawk did not agree to any wrongdoing as part of the terms of the settlement.
“We’re all very curious to see what will happen,” said Howard Foster, the Chicago-based attorney for the plaintiffs. He said the amount of each individual claim payment would be based on the person’s length of employment with the company.
Foster said the settlement does have a minimum amount employees would receive, but could not recall the specific figure.
Mohawk has agreed to pay $5 million directly from the corporate cash accounts, an amount that is basically equivalent to what the plaintiffs’ attorneys will receive.
While not admitting any wrongdoing, a large part of Mohawks’ incentive to settle the case centers around racketeering laws. If a jury sided with plaintiffs, Mohawk could have been forced to pay three times the damages.
Part of the claims documents requires Mohawk employees to submit photo identification as well as documentation that established eligibility to work in the United States at the time the person was employed by Mohawk.
Rome News Tribune