McMaster v. State of Minn.

• Decision Date: 25 July 1994
• Docket Number: MCF--OPH,No. 93-2502,93-2502
• Parties: , 128 Lab.Cas. P 33,115, 2 Wage & Hour Cas.2d (BNA) 294 Gregory J. McMASTER; Elizabeth Krogstad; Harold Gustafson; Michael Giest; Guy James Hathaway; John E. Liljedahl; Timothy S. Smith; Shawn Hubbard; James Scott; Ricky J. Sistad; Gerald Norris, on behalf of themselves and all other persons similarly situated, Plaintiffs-Appellants, v. STATE OF MINNESOTA; Orville Pung, Minnesota Commissioner of Corrections; Jean Whitney, Administrative Assistant to the Commissioner of Corrections; Donald G. Tomsche, Correctional Administrator to Minnesota Department of Corrections; Dennis Benson, Warden, Minnesota Correctional Facility--Oak Park Heights; Pat Adair, Superintendent, Minnesota Correctional Facility-Shakopee; Robert A. Erickson, Warden, Minnesota Correctional Facility--Stillwater; Fred Holbeck, Superintendent, Minnesota Correctional Facility--Faribault; G. Fred Lafleur, Superintendent, Minnesota Correctional Facility--Lino Lakes; Leroy Siegal, Superintendent, Minnesota Correctional Facility--St. Cloud; Thomas F. Grogan, Director, Minnesota Correctional Facility--Oak Park Heights Industries; Frank W. Wood, Minnesota Deputy Commissioner of Corrections; Guy Piras, Assistant Director, Minnesota C.F.--OPH Industries; Jim Rariek, Supervisor, Complex 4,Industries; John Doe; Mary Roe, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 976

30 F.3d 976

63 USLW 2148, 128 Lab.Cas. P 33,115,

2 Wage & Hour Cas.2d (BNA) 294

Gregory J. McMASTER; Elizabeth Krogstad; Harold Gustafson Michael Giest; Guy James Hathaway; John E. Liljedahl Timothy S. Smith; Shawn Hubbard; James Scott; Ricky J Sistad; Gerald Norris, on behalf of themselves and all other persons similarly situated, Plaintiffs-Appellants, v. STATE OF MINNESOTA; Orville Pung, Minnesota Commissioner of Corrections; Jean Whitney, Administrative Assistant to the Commissioner of Corrections; Donald G. Tomsche Correctional Administrator to Minnesota Department of Corrections; Dennis Benson, Warden, Minnesota Correctional Facility--Oak Park Heights; Pat Adair, Superintendent, Minnesota Correctional Facility-Shakopee; Robert A. Erickson, Warden, Minnesota Correctional Facility--Stillwater; Fred Holbeck, Superintendent, Minnesota Correctional Facility--Faribault; G. Fred Lafleur, Superintendent, Minnesota Correctional Facility--Lino Lakes; Leroy Siegal, Superintendent, Minnesota Correctional Facility--St. Cloud; Thomas F. Grogan, Director, Minnesota Correctional Facility--Oak Park Heights Industries; Frank W. Wood, Minnesota Deputy Commissioner of Corrections; Guy Piras, Assistant Director, Minnesota C.F.--OPH Industries; Jim Rariek, Supervisor, Complex 4, MCF--OPH Industries; John Doe; Mary Roe, Defendants-Appellees.

No. 93-2502.

United States Court of Appeals, Eighth Circuit.

Submitted May 9, 1994.

Decided July 25, 1994.

Richard G. Nadler, St. Paul, MN (argued), for plaintiffs-appellants.

Joycelyn F. Olson, Asst. Atty. Gen., St. Paul, MN (argued), for defendants-appellees.

Before ARNOLD, Chief Judge, LIVELY ^*, Senior Circuit Judge, and FAGG, Circuit Judge.

LIVELY, Senior Circuit Judge.

The question in this case is whether inmates of state correctional facilities are entitled to be paid the federal minimum wage established under the Fair Labor Standards Act for work performed inside those facilities as part of a prison industries program. The district court held that the inmate-plaintiffs are not covered by the Fair Labor Standards Act and have no right of action under the Ashurst-Sumners Act, and dismissed their complaint.

I.

A.

Minnesota law authorizes the Commissioner of the Minnesota Department of Corrections (DOC) to establish and operate industrial and commercial activities at any state correctional facility. The activities carried out under this authorization vary in nature, ranging from the manufacture of auto parts, file folders and clothing to data entry and telemarketing services. The commissioner is also authorized to set the level of compensation to be paid to inmates, the amount "to depend upon the quality and character of the work performed as determined by the commissioner of corrections and the chief executive officer." Minn.Stat. Sec. 243.23(1) (1993). The authorizing statute explains the State's primary purpose in establishing these activities:

The industrial and commercial activities authorized by this section shall be for the primary purpose of providing vocational training, meaningful employment and the teaching of proper work habits to the inmates of correctional facilities under the control of the commissioner of corrections, and not as competitive business ventures.

Minn.Stat. Sec. 241.27(1) (1993).

B.

The plaintiffs are current and former inmates of various Minnesota correctional facilities who have worked, or been assigned to work, in prison industries. The plaintiffs brought this class action claiming that the State violates the Fair Labor Standards Act (FLSA), 29 U.S.C. Secs. 201-219, and the Ashurst-Sumners Act, 18 U.S.C. Secs. 1761-1762 by paying inmates less than the minimum wage for all "employees" prescribed by the FLSA and by shipping prisoner-made goods in interstate commerce, which is prohibited by Ashurst-Sumners. The complaint alleges that the plaintiffs and class members are paid 50 to 75 cents per hour. The current minimum wage is $4.25 per hour.

In pursuing their Ashurst-Sumners claim, the plaintiffs relied on the Civil Rights Act of 1871, 42 U.S.C. Sec. 1983, contending that Ashurst-Sumners created a protected right in a property or liberty interest that the State infringed by paying them less than the minimum wage.

C.

The district court dismissed the action and filed a well-reasoned opinion dealing with the issues raised on appeal as well as others not brought here for review. See McMaster v. Minnesota, 819 F.Supp. 1429 (D.Minn.1993). Because we agree with both the holding and the reasoning of the district court, we affirm.

II.

The Supreme Court has never addressed the issue of whether inmates are to be included within the coverage of the FLSA. However, most federal courts of appeals that have dealt with the issue have found that inmates working in state-operated industries are not "employees" of the state and are therefore not entitled to FLSA protection. Franks v. Oklahoma State Indus., 7 F.3d 971 (10th Cir.1993); Hale v. Arizona, 993 F.2d 1387 (9th Cir.) (en banc) ("Because prisoners ... worked for programs structured by the prison pursuant to the state's requirement that prisoners work at hard labor, the economic reality is that their labor belonged to the institution. We hold, therefore, that they were not 'employees' of the prison entitled to be paid minimum wage under the FLSA."), cert. denied, --- U.S. ----, 114 S.Ct. 386, 126 L.Ed.2d 335 (1993); Harker v. State Use Indus., 990 F.2d 131 (4th Cir.) ("[W]e see no indication that Congress provided FLSA coverage for inmates engaged in prison labor programs like the one in this case."), cert. denied, --- U.S. ----, 114 S.Ct. 238, 126 L.Ed.2d 192 (1993); Vanskike v. Peters, 974 F.2d 806 (7th Cir.1992) ("[T]he relationship between the [Department of Corrections] and a prisoner is far different from a traditional employee-employer relationship...."), cert. denied, --- U.S. ----, 113 S.Ct. 1303, 122 L.Ed.2d 692 (1993); Miller v. Dukakis, 961 F.2d 7 (1st Cir.) ("The courts have uniformly denied FLSA coverage ... to convicts who work for the prisons in which they are inmates."), cert. denied, --- U.S. ----, 113 S.Ct. 666, 121 L.Ed.2d 590 (1992); Alexander v. Sara, Inc., 721 F.2d 149 (5th Cir.1983) (affirming district court finding that "extension [of the FLSA] to the prison inmate was not legislatively contemplated"); Emory v. U.S., 2 Cl.Ct. 579 ("Prisoners are not employees, within the meaning of the Fair Labor Standards Act."), aff'd, 727 F.2d 1119 (Fed.Cir.1983).

This court addressed the issue of prisoner coverage under the FLSA in Wentworth v. Solem, 548 F.2d 773 (8th Cir.1977). The court found that an inmate working in a South Dakota prison bookbindery was not covered under the FLSA. This conclusion, however, relied at least in part on the Supreme Court's decision in National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976), stating that the National League of Cities decision would prohibit extension of the federal law where such extension would interfere with a traditional government function. As the plaintiffs in this case correctly argue, Wentworth is not dispositive of the issue because the Supreme Court overruled National League of Cities in Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985). Nonetheless, Wentworth still provides some guidance in this case because the Wentworth court did not rely solely on National League of Cities in reaching its conclusion concerning the FLSA. In fact, prior to any mention of National League of Cities, the court stated that "[w]e are doubtful that Congress ... intended to extend the coverage of the minimum wage law to convicts working in state prison industries." 548 F.2d at 775.

III.

A.

The plaintiffs contend that the term "employees" as used in the FLSA must be given a broad and expansive reading. The inmates work at the direction of the prison officials just as employees on the outside work at the direction of their employers. The relationship is the same, they say, and the circumstance that the inmates do not have a consensual agreement with the DOC is irrelevant. They bolster this argument by pointing out that the FLSA contains a list of exemptions from its minimum wage requirements, and that prison inmates and their labor are not included on that list.

The plaintiffs rely heavily on cases from two other circuits in support of their argument that prisoners do fall within the boundaries of the FLSA. In Watson v. Graves, 909 F.2d 1549 (5th Cir.1990), the court of appeals reversed a district court decision and found that inmates who worked for a construction business were employees under the FLSA. Watson is readily distinguishable. First, the inmates did not work in the jail where they were incarcerated. Rather, a private contractor picked them up and took them to its construction sites. Second, while there, the inmates were unguarded and totally under the control of the contractor. Third, the inmates who worked on these details were not assigned to do so as part of their sentences; they volunteered to do this work when it was available. Fourth, the inmates were paid directly by the contractor, not by their custodians. Under all these circumstances the court found that the inmates were "employees" of the contractor. Watson provides no support for the plaintiffs in this case, who worked in the prisons as part of their sentences, were paid by the DOC for their labor, and seek a holding that they are employees of the DOC, not of some private business.

In Carter v. Dutchess Community College, 735 F.2d 8 (2nd Cir.1984), a New York inmate sued the college for whom he conducted tutorial sessions at the prison. Carter was chosen by the college, although the prison did have to give permission for Carter to do the work. Carter stated that he was paid directly by the college for his services and argued that he should receive the same pay given to the...