Heigh-Ho: Disney Workers File Class Action Suits, But Are They Viable?

As Kevin noted earlier, two different purported class action lawsuits were filed against Disney on Monday. Florida attorney Sara Blackwell represents the plaintiffs in both actions: Leo Perrero and Dena Moore. 

The complaints seem hurried and are not readily understandable. Here’s my best effort at explaining them, and assessing their viability.

Civil Rico. Plaintiffs argue that the two outsourcing companies are liable under civil RICO, 18 U.S.C. § 1962. Civil RICO requires establishing: (1) conduct, (2) of an enterprise, (3) through a pattern, of (4) racketeering activity. Racketeering activity is defined by 18 U.S.C. § 1961, and it includes violations of  18 U.S.C. § 1546 (Fraud and misuse of visas, permits, and other documents). The argument is that HCL and Cognizant violated § 1546 because, as H1B dependent employers (which, for the sake of this post I’m assuming they are), the companies had to attest that their hiring practices would not cause “displacement” of U.S. workers. Yet U.S. workers at Disney were displaced when Disney outsourced their jobs to HCL and Cognizant. 

There are potential problems with this claim.

First, the H1B workers did not displace workers at either HCL or Cognizant. At best, they displaced workers at Disney. Perhaps the theory is one of “secondary displacement.” Under 20 C.F.R. § 655.738(d), an H1B dependent employer cannot place H1B workers “with another employer where there are indicia of an employment relationship between the nonimmigrant and that other employer (thus possibly affecting the jobs of U.S. workers employed by that other employer), unless and until the H1B employer makes certain inquiries and/or has certain information concerning that other employer’s displacement of similarly employed U.S. workers in its workforce.” Disney, to be sure, will argue that there was no “indicia of an employment relationship” with the HCL/Cognizent workers.

Second, neither HCL nor Cognizent had to make the attestations that the complaints place such emphasis on. When H1B workers are paid at or above $60,000, such attestations are not required. 20 C.F.R. § 655.737. Based on reporting, it appears that the HCL and Cognizent workers may have been paid around $61,984. That means they were under no obligation to make the attestation in the first place.

RICO Conspiracy. The second cause of action raised against HCL/Cognizent and Disney is conspiracy to engage in a RICO violation under 18 U.S.C. § 1962(d). Obviously, if there is no RICO claim against HCL or Cognizent, there will be no RICO Conspiracy claim against Disney. Moreover, Disney will argue that it had nothing to do with filing, seeking, processing, or approving of H1B applications for HCL or Cognizent. As Disney spokeswoman Kim Prunty said in 2015: “External support firms are responsible for complying with all applicable employment laws for their employees.” 

Common Law Conspiracy: The Hail Mary pass comes in count three, which alleges common law conspiracy under Florida law for agreeing “to do an unlawful act.” Plaintiffs argue that HCL/Cognizent had an agreement with Disney “to make false and fraudulent representations of material fact.” I don’t see how that is going to fly when Disney had nothing to do with the H1B applications.

As I said a few months back, it’s upsetting when anyone loses their job. And it’s all the more upsetting when Disney is the visible bad guy. The company not only has a special place in many hearts but it’s a company whose innovative and effective management are touted worldwide.

But that doesn’t make them civilly liable to these plaintiffs.

-KitJ