A recent suit filed in California alleges that businesses that hire illegal immigrants gain an unfair advantage over competitors. Businesses who play by the rules, the plaintiffs argue, pay considerably more in labor costs and taxes, which puts them at a disadvantage. While there is an intuitive logic behind this argument, it remains to be seen whether plaintiffs can prove they were directly harmed.
It is going to be difficult to explain that following the law is a competitive disadvantage, (though executives in heavily regulated industries will grasp this concept quite readily). To say the least, the claim that "we followed the law" constitutes a novel statement of harm. Businesses are supposed to follow the law, so there are inherent problems in arguing that "following the law" is a cause of damages.
Nevertheless, illegal acts of various kinds can serve as the basis for unfair competition claims. If this or any similar case is successful, a host of other companies whose competitors hire undocumented workers - farms, mills, factories - are prepared to file similar suits. Whether or not any of these particular suits are successful, expect a wave of similar cases around the country very soon.
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