Made In America: Prisoners As Non-Laborers

Prison labor is consistently justified on the grounds that inmates are non-laborers learning

job skills and coping against prison idleness. There are several problems with these underlying

justifications. First of all, the prison population is rising1 in the U.S., and the economy continues

to implode. Secondly, prison workers are more than likely to be excluded from the Fair Labor

Standards Act (FLSA)2 coverage and once released, ex-convicts suffer increased discrimination

when they seek to obtain employment. Furthermore, the disproportionate consequences of the

War on Drugs on communities of color and mandatory sentences schemes together guarantee

this captive labor pool. Prison labor and slavery were similar in that the owners/masters reap the

profits free of liability.3 Opposition by labor groups and mounting pressure from the Great

Depression led Congress in the 1930s to pass the Ashurst-Summers Act4 ending the leasing of

prisoners in America and banning the transportation of prison-made goods across inter-state

commerce.5 The Act contained significant exceptions currently being used throughout most

jurisdictions in the United States and the federal government, which continue manufacturing

1 Bureau of Justice Statistics, Correctional Populations in the United States (2009), http://bjs.ojp.usdoj.gov/content/pub/pdf/cpus09.pdf (last visited Apr. 30, 2011)(noting that correctional authorities supervised 7,225,800 offenders at year end this included adults on probation or parole and those in state or federal prisons and local jails). 2 Fair Labor Standards Act (FLSA), 29 U.S.C. 201 (1938). 3 See Stephen P. Garvey, Freeing Prisoners’ Labor, 50 Stan. L. Rev. 339, 357 (noting that the lease system of using prisoners for private employers on the outside may have been a source of greater abuse compared to slavery); see also Stephen Harnett, Prison, Labor, Slavery & Capitalism In Historical Perspective, available at http://www.historyisaweapon.com/defcon1/hisprislacap.html (last visited April 10, 2011) (linking the use of slavery and prison labor with the larger goals of capitalism tracing these exploitative conditions from colonization, post-Civil War, up to its current corporate order).4 Ashurst-Summers Act, 18 U.S.C. §§1761-62 (1935)(setting fines or imprisonment of not more than two years on whoever knowingly transports prison-made goods, even from foreign countries, inside of interstate commerce). 5 See Garvey, supra note 1, at 358-359 (“As labor unions began to grow and coalesce in the latter part of the nineteenth century, the pressure to end the leasing and contracting of prison labor intensified. By the mid- to late-

1930s, the problem would be solved, but the “solution” would leave behind a legacy of idleness.”).

1

prison-made goods. 6 Specifically, that legislation authorized the transportation and manufacture

of prison-made goods across interstate commerce by special arrangements between departments

of corrections, private contractors and the government. The Federal Prison Industries (FPI)7 and

the Prison Enhancement Certification (PIECP) program as the central authorities regulating the

use of prison labor. 8 Both of these systems justify the use of prison labor on the grounds that

prison labor effectively addresses the issues of idleness and incarceration and it provides inmates

with skills that they can transfer to the outside once they are released. However, those goals are

misplaced because a system benefitting from prison labor [read cheap labor] exploits prison

workers when it fails to provide inmates with minimum wage and it creates an incentive for

private contractors to seek out this silenced labor force. 9

FPI and PIECP rely on prison workers while simultaneously denying them FLSA

coverage. This undermines the very provisions within those Acts that were meant to ensure that

there is limited worker displacement on the outside economy. By not paying inmate workers

minimum wage the private employer has a competitive advantage over other employers. If the

end goal is cheap labor, prisoners represent an easy target for exploitation because the prison

6 18 U.S.C.A § 1761 (b) (“This chapter shall not apply to agricultural commodities or parts for the repair of farm machinery, nor to commodities manufactured in a Federal, District of Columbia, or State institution for use by the Federal Government, or by the District of Columbia, or by any State or Political subdivision of a State or not-for-profit organizations.”).7 18 U.S.C.A § 4122 (Westlaw 2010). 8 18 U.S.C.A § 1761 (c) [hereinafter PIECP](one exception is for states that are participating in—“one of not more than 50 non-Federal prison work pilot projects designated by the Director of the Bureau of Justice Assistance.”). The Prison Industry Enhancement is a federall sponsored grant program that provides funding to states once they have been certified for work industries in state and local correcetional facilities. P.L. 96-157. 9 See, e.g., Caroline Winter, What Do Prisoners Make for Victoria’s Secret?, Mother Jones, http://motherjones.com/politics/2008/07/what-do-prisoners-make-victorias-secret (last visited May 1, 2011)(listing some well-known companies such as Starbucks, Microsoft, Boeing, Wal-Mart, Victoria Secret, etc., whose subcontractors hired prisoners to manufacture their products); Anita Weier, WI: Prisoners Help Build Wal-Mart, The Real Cost of Prisons Weblog, http://realcostofprisons.org/blog/archives/2005/11/wi_prisoners_he.html (last visited May 1, 2011)(describing how prison inmates on a work release program helped built a Wal-Mart distribution center because there were not enough people from the general public who wanted to do the same work for the low pay without benefits).

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controls them, their remedies are limited,10 and they are subdued. To make matters worse, the

courts appear to have entrenched themselves upon two rigid views regarding the use of prison

labor and FLSA coverage.

Courts have approached the issue of prison labor with ambiguity resulting in the recurrent

exclusion of inmates from labor protections and from the workforce altogether. Some courts

have applied an economic reality test in determining whether a prison worker falls within the

definition of employee under FLSA. Other courts have embraced a per se rule that excludes

prison workers from FLSA coverage. Under both approaches, the location of where the work is

performed has been treated differently. Some courts see a relevant distinction based on where the

prisoners do the work, but other more restrictive courts see this as an irrelevant question. For

these latter courts, the notion of ultimate control is the main consideration in determining

whether there is an employee-employer relationship. Courts that stress the notion of control

typically side with the prison and against prison workers.

Prison labor is consistently framed as being on the outside of the national economy

placing inmates in the status of invisibility also endured by immigrant low-wage workers across

the United States.11 Prisoners are repeatedly excluded from FLSA and the main critiques of

prison labor—worker displacement, subminimum inmate wages, wage deductions, and the

awarding of state contracts— remain relevant in today’s debate on prison labor. More

importantly, the rationales of using prison labor to fight idleness and to provide transferrable jobs

skills come at the expense of treating prison workers as a sub-class of labor. How can we fight

10 Colleen Dougherty, The Cruel and Unusual Irony of Prisoner Work Related Injuries In The United States, 10 U. Pa. J. Bus. & Emp. L. 483, 485 (2008)(commenting that prisoners are consistently denied from seeking remedies, especially in the context of the Eight Amendment).

11 Janie A. Chuang, Achieving Accountability For Migrant Domestic Workers, 88 N. C. L. Review 1627, 1634 (2010) (describing how the denial of domestic workers rights and labor protections as a group has at its roots a view of otherness).

3

for the equality of rights for workers when we enforce a system of labor exploitation within our

own prisons? This paper seeks to set forth the foundations of the existing regime over prison

labor, to explore its justifications, and to address the conditions which inmates face when they

are subjected to work. In concluding, I look toward the current fiscal crisis in the United States

and how some states are turning to prison labor as a means to close budget gaps.

Section I of this paper highlights the ways in which FLSA coverage of prison workers is

severely limited by the countering views of the courts. I analyze the arguments made by courts

that have extended the FLSA to prison workers, the counterarguments by courts rejecting this

extension, as well as the policies that underlie these competing views.

Section II of this paper provides an overview of the existing corporate structures of prison

labor at both the federal and state level with a special emphasis on the premises underlying those

structures. I focus on how the Federal Prison Industries, Inc., (FPI)12 is setup and how this

corporation controls prison labor across all federal prisons in the United States. In analyzing FPI,

I look at the rationale behind this corporation, its functions, powers, and how it actively uses

prison labor while excluding inmates from the FLSA provisions. I also provide an overview of

PIECP, which authorizes jurisdictions at the state level to profit from the marketability of prison-

made goods in interstate commerce. 13 I examine the two core justifications advanced by these

different pieces of legislation that prisoners should work to avoid idleness and to gain skills they

can use once they are released.

I. Prisoners and the Fair Labor Standards Act

A. Rejecting Prison Workers From Coverage of FLSA

12 Supra note 10. 13 Supra note 5.

4

The FLSA is one of the central federal labor regulations ensuring that there is no unfair

competition in the market by requiring that employers provide basic protections to their

employees. 14 The Congressional findings accompanying FLSA state that the purpose of the Act

is to eliminate detrimental conditions in labor that lower the standard of living and to prevent the

spread and perpetuation of those labor conditions in the market. 15 Despite FLSA being a critical

statute that imposes restrictions on what employers can and cannot do with their employees, the

FLSA is silent on prison workers and there is no legislative history that would either support or

object to the use of prison labor under the Act.16 For that reason, prison labor represents a context

in which FLSA coverage boils down to whether an employee-employer relationship exists

between the inmate and the defendant. One main flaw in this approach is that prison workers are

subjugated by the goals of the prison, which are superior to the interests of the prisoners and this

weighs against FLSA coverage. Denying inmates FLSA coverage leaves them in a vulnerable

position subject to exploitative practices carried out under the misplaced purpose of curing

inmate idleness.

Courts that reject prison inmates from FLSA coverage have followed two principle lines

of reasoning. One line of court decisions has applied an analysis of control to determine whether

there is an employee-employer relationship between inmates and the prison.17 Other courts have

adopted a per se rejection of prison inmates from FLSA coverage simply because they are

inmates. 18 It is important to note that FLSA does not explicitly reject prison inmates from

14 Supra note 5. 15 29 U.S.C.A. § 202 (a)(b) (Westlaw 2011). 16 See 110 A.L.R. Fed. 839 § 3(a)(b) (1992) (noting that the lack of specific language indicating that the FLSA intended to apply to prisoners has led to different approaches across the circuits). 17 See, e.g., Alexander v. Sara Inc, 721 F.2d. 149,150 (5th Cir. 1983)(holding that ultimate control and regulation of the inmates who work for Sara Inc. remains with prison officials and therefore prison inmates are not covered under the FLSA). 18 Kavazanjian v. Naples, WL 2795220 (E.D. NY, 2006)(excluding inmates from FLSA coverage on the grounds that prisoners are serving the institutional needs of the prison and there labor is therefore not the kind that would

5

coverage, and certain courts that have found coverage have viewed this as a strong argument for

not categorically excluding inmates from the Act.19 Since there is no per se exclusion of prison

inmates under FLSA, coverage often comes down to where the work is performed. Although

some courts entertain the possibility that certain inmates may be covered under FLSA, for the

most part, prisoners are typically denied minimum wages, basic labor protections, and the right

to obtain overtime pay, all because their work belongs to the prison system.

1. Control of Prison Labor Through Inmate Status

Courts that have rejected prison labor from FLSA coverage emphasize the notion of

prison control over the inmates. 20 Prisoners in these cases performed work within the prison for

for-profit entities that had contracted with the correctional institution for access to prison labor.

Often times these business entities specifically contracted with the director of the department of

corrections to assign prison workers to outside companies. In most of these instances, the pay of

the inmates would go to the correctional institution, which taxed the inmates for victim

restitution, board, and other expenses and then prescribing wages at their liking. In these cases

inmates were suing the private entity for back wages, minimum pay, and overtime pay, but

FLSA coverage always came down to control of the inmate by the correctional institution. For

example, the Alexander court adopted the view that control is the ultimate issue in determining

undermine the FLSA provisions); McMaster v. State of Minnesota, 30 F.3d 976, 978 (8th Cir. 1994)(rejecting inmates from FLSA coverage when prisoners were required to work as part of their sentences and perform labor within a correctional facility). 19 29 U.S.C. § 213 (1983) (excluding executive, administrative or professional capacity employees, domestic workers, agriculture workers and many more, but no mention of prison workers). 20 Gilbreath v. Cutter Biological, Inc., 931 F.2d 1320, 1325 (9th Cir. 1991)(denying prisoners FLSA claim to recover minimum wage for work they performed on-site because “…the state had complete control over Arizona’s inmates.”); Harker v. State Use Industries, 990 F.2d 131, 133 (4th Cir. 1993)(inmates not entitled to FLSA coverage when he worked in a print shop run by the private company inside of the correctional institute); Franks, et. al. v. Oklahoma State Industries, 7 F.3d 971, 972 (10th Cir. 1993)(holding that inmates primary relationship with the correctional institution is incarceration and not employment therefore inmates were not covered under FLSA).

6

whether there is an employee-employer relationship in the prison context.21 In Alexander,

prisoners worked for a blood plasma program run by Sara, Inc. a private company that had

entered into a contract with the Louisiana Department of Corrections permitting the inmates to

participate. 22 The inmates were compensated at $3.00 a day and they were never paid for

overtime wages; it was also clear that their current pay was below the minimum wage. 23 The

court noted that mere discretion on Sara’s part in selecting prisoners did not establish an

employer-employee relationship between the inmate and the private employer because the

supervisory discretion rested with correctional officials who monitor the actions of individuals

who are incarcerated in penal institutions.24 Under the terms of the contract, the Louisiana

Department of corrections had the right to veto the assignment of inmates and in choosing which

inmates could participate as workers. The Alexander court went so far as to claim that it was

never in FLSA’s intent to extend the minimum wage provision to inmates. 25

Courts have also exempted prisoners from FLSA on the grounds that prison labor

inherently belongs to the penitentiary.26 In Hudgins, inmates worked for a company that

extracted blood plasma and the inmates had worked for three years underpaid pursuant to the

federal minimum wage provisions. 27 The inmates brought a suit against the private employer and

the director of the department of corrections. The prison argued that they owned the inmates’

labor because they had been sentenced to hard labor and therefore control was in the hands of the

21 Alexander, 559 F.Supp. at 42. 22 Id. at 42. 23 Id. at 43. 24 Id. at 44. 25 This argument of whether FLSA intended to cover workers is recurrent in the debate whether prison inmates are entitled to minimum wage and other basic protections. 26 Hudgins v. Hart, 323 F.Supp. 898 (E.D. Lousiana, 1971). 27 Id. at 899.

7

prison officials. 28 Additionally, both the private employer and the prison argued that there was

no contractual relationship between the inmates and them. Not only did the District Court follow

this argument, but the court also held that the plaintiff was an inmate at the penitentiary and as

such his labor belonged to the penitentiary; the penitentiary decided how much to pay for the

labor, and there was no contractual agreement between the inmate plaintiff and the defendants. 29

Unlike the Alexander court, in Hudgins the court remained silent on the importance of upholding

the policies of FLSA and the vulnerability of inmates as a captive labor force. 30

The court in Alexander and Hudgins did not apply an economic realities test and the

analysis of prison labor was limited to the control of the penitentiary over the inmate. An

economic reality test would have shown that the private employer exercised supervisory control

over the inmates in deciding the quality of the work, how quickly it had to be done, and imposing

training and maintaining standards for work. Other courts that have found in favor of FLSA

coverage of prison workers have applied a factor-based economic realities test that assesses the

underlying circumstances between the inmate and the private employer to determine whether

there is an employee-employer relationship. Despite the finding of FLSA coverage, these

decisions occur in the narrow context of prison work-release programs. The vast majority of

prison work takes the form of factories that set up their operations within the prison walls as

occurred in Alexander and Hudgins. In these circumstances, sometimes the prison itself is

responsible for exercising control over the manufacture of prison made-goods. Consequently, the

28 Id. at 898. 29 Id. at 899. See also Huntley et al. v. Gunn Furniture Co., 79 F. Supp. 110, 113 (W.D. Michigan, 1948) (“It is clear that the labor of the plaintiffs as inmates of the Stat prison belonged to the State of Michigan, and they concede in effect that they could be lawfully employed only by the state.”); Sims v. Parke Davis & Co., 334 F.Supp. 774, 786 (“The economic reality test is that plaintiffs are convicted criminals incarcerated in a state penitentiary.”). 30 Prisoners working inside of the prison in prison services are also not considered employees under the FLSA See Moore v. McKee, 2003 WL 22466160 (D.Kan., 2003) (excluding prison worker from FLSA when inmate worked several jobs within the prison paid at $1.05 a day because an inmates relationship with prison arises out of status as inmate and not employee).

8

goods produced by inmates outside of FLSA protection directly violate the FLSA hot goods

provision31 that prohibits goods made in violation of FLSA protections from entering the stream

of commerce. 32 The inmate workers are left unprotected by FLSA because they fall in a void in

which the business or private employer is not seen as an employer at all because the courts say

that these entities do no exert sufficient control over inmates. However, the prison does exert

control but it is not an employer for FLSA purposes because even though it exerts control it

serves penal goals of justice and is not seen as a participant in commerce.

B. Prisoners As Covered Employees Under the FLSA

For a limited number of courts, prisoners may be considered employees within the FLSA

and their status as inmates is not an immediate preclusion of such coverage. 33 In these cases

inmates were working off-site with the private for-profit entity. For the most part, the court

reasoned that the use of inmates for outside employment directly undermined the protections of

FLSA by contributing to unfair competition because inmates are not given minimum wages in

accordance with federal standards. In Carter, an inmate was working as a tutor off prison

grounds for a college institution and he was paid $1.20 per hour and the minimum wage was

$3.10. 34 The court used four factors to asses whether there was an employer-employee

relationship between the inmate and the private employer: whether the alleged employer (1) had

the power to hire and fire the employees; (2) supervised and controlled employee work schedules

or conditions of employment; (3) determined the rate and method of payment; and (4)

maintained employment records. 35 The Carter decision is important because it emphasized that

31 29 U.S.C.A. § 215 (Westlaw 2011) (making it unlawful for any person to transport, deliver, or sell in commerce any goods that were produced in violation of minimum wage and overtime provisions). 32 Id. 33 Carter v. Dutchess Community College, 753 F.2d 8 (2nd Cir., 1984). 34 Id. at 11.35 Id. at 11.

9

there is no absolute exclusion of prison workers from FLSA coverage. The court traced the

purposes of FLSA stating “It follows that the fact that control over a worker may be qualified is

not a sufficient factor, in and of itself, to place an employment relationship beyond the scope of

the FLSA.” 36 The court specifically noted that exempting a whole class of workers “based on

technical labels” would upset workplace equilibrium.37 More importantly, the court held that

Congress did not expressly include prisoners on its extensive list of exempted workers, and thus

it would be an encroachment on the legislative prerogative to hold that a class of workers is

excluded.38 The court noted that this case represented a different setting from cases where

inmates performed services for entities inside of the prison. Here the inmates seeking FLSA

coverage for their work that was performed outside of the prison and the employer was

exercising main supervision and setting the standards of work to warrant FLSA coverage. 39

Work release programs represent a setting where control as the main factor to determine

FLSA coverage makes some sense. One reason for this is that the prison has ceased to be the sole

supervisory agent and has entrusted the care and responsibility of the inmate to a company.40 In

fact, Carter stands for the proposition that work performed outside of prison by inmates may

come within FLSA coverage on the grounds that the outside employer exerts greater control over

the prison worker then the prison.

The Fifth Circuit court in Watson aligned itself with Carter in stating that inmate status

alone does not preclude FLSA coverage. In Watson, the Louisiana correctional system conducted

a program that allowed prisoners who were granted a trusty status to work outside the jail for

36 Id. at 12. 37 Id. at 13. 38 See also Hale v. Arizona, 993 F.2d 1387, 1393 (9th Cir. 1993) (pointing out that FLSA does not categorically exclude all labor of any inmate, but prisoners who work for programs structured by a prison pursuant to state law requiring hard labor are not employees within the meaning of the Act). 39 Id. at 15. 40 Watson v. Graves, 909 F.2d 1549 (5th Cir. 1990).

10

private individuals or companies. 41 Trusty status meant that the prisoners could participate to

work outside the jail for private individuals or companies if they met certain requirements. Both

plaintiffs were granted trusty status and worked for the Sheriff’s daughter and son-in-law in an

unincorporated construction business that relied exclusively on trusty labor or subcontractors. 42

Here, the employer refers to the Sheriff’s daughter and son-in law and they were the ones the

prisoners were suing. The court noted that the private employer exercised the power to hire and

fire, supervised and controlled the inmates, and kept the inmates as long as the employer needed

them. 43 The employer had enough control over which inmate to work, how frequently, how long,

and on what projects to warrant FLSA coverage. Overall, the employer had a “captive pool” of

cheap labor that he could pay token wages to and this was against the main purposes underlying

FLSA. Unlike private competitors that were required to pay their workers minimum wage and

benefits, the employer here did not have to pay worker’s compensation or overtime, thus

securing the upper hand over competitors by exploiting prison inmates. The court thus held that

the inmate workers were entitled to overtime as well as other payments applicable under FLSA.

C. Narrowing Carter and Watson Toward Greater Exclusion of Inmates From FLSA Coverage

The Carter decision promised some opportunity for inmates seeking to recover minimum

wages under the FLSA, but the predominant trend has been to exclude prisoners from FLSA

coverage. 44 Subsequent courts have confined Carter and Watson to their facts by emphasizing

41 Id. at 1551. 42 Id. at 1551. 43 Supra note 42 at 1554. 44 See Danneskjold v. Hausrath, 82 F.3d 37 (2d Circuit, 1996); Vanskike v. Peters, 974 F.2d 806, 808 (7th Cir. 1992) (concluding that although prisoners are categorically excluded from FLSA coverage they are not employees when they are assigned to work within the prison walls regardless if the work is voluntary or not); McMaster v. Minnesota, 30 F.3d 976, 980 (8th Cir. 1994)(finding that inmates assigned to work in internal prison industries not covered by FLSA); Hale v. Arizona, 993 F.2d 1387, 1395 (9th Cir. 1993)(holding that prisoners working in prison programs pursuant to Arizona law requiring hard labor were not employees under the FLSA).

11

that the inmates in those cases were working under special release programs outside of the

prison.45 Moreover, correctional institutions also began to rearrange their work structures in

accordance with legislation that approved the use of prison labor and the exchange of prison-

made goods in interstate commerce. 46

Subsequent judicial decisions have scaled down the Carter approach primarily by shifting

the focus on where the work is performed and away from the economic reality underlying the

relationship between the prisoner and the private employer. For example, in Danneskjold,

inmates at the Attica Correctional facility were allowed to take college courses and they could

also assist in the program by being tutors to other inmates receiving $1.45 a day. 47 The inmates

sued the department of corrections and the director of the consortium for failure to pay inmates

minimum wage. The Second Circuit court discarded the economic reality test altogether, holding

that FLSA does not apply to prison inmates in circumstances in which their labor provides

services to the prison regardless of whether the work is voluntary, whether it is performed inside

or outside the prison, and whether or not a private contractor is involved. 48 The court adopted the

Vanskike decision in that it categorized inmates as participants outside of the national economy,

justifying this on the grounds that correctional institutions have the right to force inmates into

performing labor and services that are used by the prison. 49 Although Danneskjold left room

45 The Vanskike decision contains the underlying view of subsequent decisions excluding prison laborers:

“Prisoners are essentially taken out of the national economy upon incarceration. When they are assigned work within the prison for purposes of training and rehabilitation, they have not contracted with the government to become its employees. Rather, they are working as part of their sentences of incarceration.”

Vanskike, 974 F.2d at 810. 46 Supra note 10. 47 Supra note 46 at 40. 48 Id. at 39. 49 Id. at 42. See also U.S.C.A Const. amend. XIII (“Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.”).

12

open for FLSA coverage of prisoners who perform work outside of the prison for companies that

will sell their goods in interstate commerce, the decision represents a growing line of cases

placing prison inmate labor outside of the national economy and treating them as non-labor when

they are producing and manufacturing products within prison walls.

Denying inmates from FLSA occurs in a background where prison labor displaces

workers on the outside economy and where prison workers are being exploited. Prison labor not

only contradicts the FLSA because prisoners are manufacturing goods under federal minimum

wage, in violation of the hot goods provision, but prisoners are also limited in their remedies. In

addition, the justification of providing inmates with job skills is pointless in light of the grave

recidivism rates. 50Against this consistent exclusion of inmates from FLSA coverage the

government has built a colossal corporation with extensive power to regulate, contract out, and

sell prison labor and prison-made goods with full authority from Congress. There also exist

legislation at the state level authorizing departments of corrections to contract out with private

employers to use prison labor.

II. The Federal Prison Industries, Inc. and PIECP: The Corporatization of Prison Labor

A. Toward Corporate Control of Prison Labor

The history of the regulation of prison labor begins in the early days of slavery, moves to

a series of congressional restrictions in the 1930s, and ultimately results in the current corporate-

structured use of prison labor. The old concept of prison labor that openly sold prison-made

goods in the market underwent restrictions with the passage of the Hayes-Cooper Convict Labor

50 Nearly four out of five black people who are released from prison return there within three years; more than half within a year. See Bureau of Justice Statistics, National Recidivism Study of Released Prisoners, http://bjs.ojp.usdoj.gov/index.cfm?ty=pbdetail&iid=1134 (last visited Apr. 30, 2011).

13

Act of 1929 and the Ashurst-Summers Act of 1935. 51 The activity and organization that brought

about these two statutes came directly from the labor movement’s challenge on the uses of an

exploited prison workforce, and outside competitors that complained of the glaring unfair

advantages of using prisoners to create goods. 52 Alongside the Hayes-Cooper and the Ashurst-

Summers Act was the Walsh-Healy Act prohibiting federal government contractors from using

prison labor to fulfill contracts worth more than $10,000. 53A recurrent argument made by

opponents of prison labor was that outside competitors were at an economic disadvantage vis-à-

vis prison-made goods because prisoners receive neither the minimum wage, benefits, and they

represent a replenishable and captive source of labor. 54 PIECP represents the state-level

regulation of prison labor manufacturing goods sold in interstate commerce; FPI represents the

federal regulation of prison labor manufacturing goods that are sold to the government. Although

both programs treat prison inmate labor differently, the end result is still exclusion from basic

protections such as minimum wage and overtime pay on the basis that prisoners have not

contracted freely for their labor with a non-prison employer. 55Both programs are premised on

the notion that prisoners should not be idle and by placing them to work they are learning skills

that they can later transfer to the outside world. This section focuses first on the history of FPI,

its deployment across federal prisons, and the continued exclusion of inmates under the FLSA. I

51 Garvey, supra note 6, at 367 (“The Hawes-Cooper and Ashurst-Sumners Acts eliminated whatever room remained for prison industries to sell their goods on the national market.”). 52 See Lucas Anderson, Kicking The National Habit: The Legal And Policy Arguments For Abolishing Private Prison Contracts, 39 Pub. Cont. L.J. 113, 117 (noting that labor reform advocates were responsible for scaling down prison labor programs); Peter Gilmore, Made In The U.S.A…By Convicts, Labor Party at http://lpa.igc.org/lpv24/lp3.htm (last visited Apr. 10, 2011). 53 Pub. L. No. 74-846, 49 Stat. 2036 (1936) (codified as amended at 41 U.S.C. § 35). 54 Garvey, supra note 6 at 365. 55 See Graham v. Chesapeake Cap Co., Inc. WL 422449, 2 (1997)(denying inmates under one of the pilot programs of PIE minimum wage with a per se exclusion that prisoners are not employees are compensated by the grace of the state); Nicastro v. Reno, 84 F.3d 1446, 1447 (barring inmates from asserting claims for compensation at the federal minimum wage because they did not meet the prerequisites for “employee” under FLA).

14

then engage in a similar overview of PIECP and its application in most jurisdictions of the

United States emphasizing how the justifications of the use of prison labor contradict the

increase in incarceration rates and the consequences of a conviction for future employment.

B. Federal Prison Industries, Inc.

FPI is an executive agency that was signed into law in 1934 by President Roosevelt.56 This

agency, often referred by its trade name UNICOR,57 derives power from its mandatory source

provision that requires government institutions to buy a certain amount of goods made by FPI.

58The mandatory source provision is a built-in statutory requirement that federal agencies solicit

and purchase goods from FPI if the corporation could provide the goods on time and at a cost not

to exceed current market prices.59 FPI needed this mandatory source provision to help offset the

competitive disadvantages of an “untrained and uneducated” labor pool and the security costs of

production, to name a few.60 One of FPI’s premises is that it provides inmates with skills that

they can transfer to the outside world. This is a flawed argument that assumes that ex-convicts

will compete on the same footing for employment once they are released. That is unrealistic

given the fact that employers are known to discriminate against workers with a prior criminal

history. 61All in all, FPI is not addressing the conditions that lead the prisoners behind bars in the

56 Factories With Fences: The History of Federal Prison Industries, UNICOR, http://www.unicor.gov/information/publications/showpub.cfm?pubid=57 (last visited April 10, 2011). 57 Id. at 24. The rebranding of the FPI corporation to UNICOR symbolized the new identity of the business and was meant to develop a brand based on customer satisfaction and marketing, with as little mention as possible of prison labor. 58 18 U.S.C.A. § 4124 (a) (Westlaw 2011). 59 Supra note 59 at 26 (noting how UNICOR has been able to waive some of its mandatory source provision as a result of legislative efforts steering the company to a more competitive arena). 60 Supra note 59 at 26. 61 Joan Petersilia, Parole and Prisoner Reentry In The United States, 29 Crime & Just. 479, 510 (1999) (noting that each state has its own particular professions that are closed off to ex-convicts such as nurse, dentist, engineer; in addition to the “fear and suspicion” surrounding ex-convicts making them undesirable for employers). See also, Josephine R. Potuto, The Modern Prison: Let’s Make It A Factory For Change, 18 U.Tol. L. Rev. 51 (1986)(noting that prisoner classification severly limits job eligibility as prisoners are discriminated in the market and prisoners do not believe that the skills they learns through FPI will help them once on the outside).

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first place and it undercuts its own provision of limiting worker displacement on the outside

when it denies inmates FLSA coverage.

The mandatory source provision secures a steady source of business for FPI.62 In fact,

certain provisions in FPI grant the agency the exclusive right to sell furniture to government

agencies.63 Among some of the items manufactured by FPI are: clothing and textiles, electronics,

and custom fabricated industrial products. 64 FPI has immense power in regulating federal prison-

made goods: it determines what products to make, in what quantity, and it decides how those

profits will be distributed. 65FPI’s active role in using prison labor runs counter to judicial views

that prisoner labor constitutes non-labor that exists outside of the national market because they in

fact are being exploited by FPI as cheap labor. Prisoners are a in a vulnerable position: excluded

from basic FLSA protections and outside of the national economy. Moreover, the lack of any

congressional mention of prisoners when drafting labor regulations, keeps prisoners outside of

the public eye and inside of prison factories. FPI claims to be a corporation designed to enhance

the opportunity of federal inmates, yet the way it achieves this is by keeping prison workers

outside of the FLSA, outside of national scrutiny, and deep within the prison system’s shadow.

C. Denying Prison Workers Minimum Wage Under FPI

62 18 U.S.C.A. § 4124 (a). FPI is supposed to reduce to a minimum its competition with private industry or free labor. See also 18 U.S.C.A. § 4122 (b)(1)&(2) (“Federal Prison Industries shall conduct its operations so as to produce products on an economic basis, but shall avoid capturing more than a reasonable share of the market…”).63 Supra note 59 (“The several Federal departments and agencies and all other Government institutions of the United States shall purchase at not to exceed current market prices, such products of the industries authorized by this chapter as meet their requirements and may be available.”). 64 Factories With Fences, supra note 52. See also Vicky Pelaez, The Prison Industry In The United States: Big Business or A New Form of Slavery, Global Research Center for Research on Globalization, http://www.globalresearch.ca/index.php?context=va&aid=8289 (last visited Apr. 23, 2011)(noting that federal prison industry produces 100% of military helmets, ammunition belts, tents, airplane parts, paintbrushes, bags, shirts, etc.). 65 18 U.S.C.A. § 4122 (a).

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Prisoners working for FPI are continually excluded from FLSA coverage.66 This undermines

the FPI provisions that seek to protect against worker displacement in private industry or free

labor.67 Like the cases excluding prisoners from FLSA discussed above (Alexander, Hudgins,

etc), prisoners seeking compensation of minimum wage rate under FPI have been classified as

non-employees under FLSA. In Nicastro, federal prison inmates worked in industrial

assignments within FPI in a penitentiary in Pennsylvania and they brought suit against the

executive directors of FPI and other federal officials. 68 The inmates were seeking compensation

at the minimum wage rate and the district court dismissed their claims on the grounds that the

inmate’s work was not voluntary. Unlike Carter, Danneskjold and other court decisions that have

at least applied an economic reality test to determine whether there is an employee-employer

relationship, the court here relied entirely on the argument that prisoners are not entitled to

minimum wage because they have not freely contracted with a non-prison employer to sell their

labor. 69 This criterion of “freely contracting” labor, which is something that inmates cannot do

by the very nature of their incarceration, is misplaced and it does not capture the reality that

prisoners endure behind bars. Therefore, it is no surprise that the weight of the Nicastro decision

was on the inmate’s status as involuntary workers that the prison can compel to work as it sees

fit. 70

66 Nicastro v. Reno, 84 F.3d 1446, 1447 (District of Columbia, 1996) (denying federal prisoners from FLSA minimum wage protection because inmates under FPI are not performing voluntary work as part of a penological work assignment); Sprouse v. Federal Prison Industries, Inc., 480 F.2d 1, 2 (5th Cir. 1973) (holding that inmate suit against FPI for back wages, liquidated damages and attorney’s fees is a suit against the United States and therefore court dismissed complaint for lack of subject matter jurisdiction). 67 Free labor under FPI means work done by non-inmates, by people who are not incarcerated. 68 Supra note 58 at 1447.69 Supra note 59 at 1447. 70 See, e.g., Bennett v. Frank, 395 F.3d 409, 410 (7th Cir. 2005). The court stated:

People are not imprisoned for the purpose of enabling them to earn a living. The prison pays for their keep. If it puts them to work, it is to offset some of the cost of keeping them, or to keep them out of mischief, or to ease their transition to the world outside, or to equip the with skills and habits that will make them less likely to return to crime outside. None of these goals are compatible with federal

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D. Exclusion of Prison Inmate Labor From FLSA Undermines FPI

The exclusion of prison inmate labor from FLSA serves to undermine the FPI provisions

that seek to protect against displacement of non-prison workers or unfair competition. 71 One

commentator argues that ensuring minimum wage to prison workers would result in large-scale

cutbacks in inmate labor or simply lead to the end of these programs altogether. 72 However,

framing the argument in this self-serving manner is dismissive of the critical issue that inmates

are captive labor, that they are under absolute control by the correctional institution, and, above

all, that when prisoners are released they do not have the same opportunities compared to non-

convicts confining them in a black list of the unemployable. In fact, a criminal record marks

formerly incarcerated men and women for life by severely limiting their ability to participate on

an equal footing for employment. 73 The lack of a direct response from either the Supreme Court

or Congress on this issue has resulted in prison laborers facing unequal treatment, discrimination

and exploitation. 74 Notwithstanding the plight of prison laborers, there have been congressional

efforts to set mandatory working hours for prisoners and to use prison-labor in light

manufacturing activities through subcontracting with private sector prime contractors. 75 Even

regulation of their wages and hours. 71 Alexander B. Wellen, Prisoners and The FLSA: Can The American Taxpayer Afford Extending Prison Inmates The Federal Minimum Wage?, 67 Temp. L. Rev. 295, 304 (1994) (“The unfair competition that can result from cheap prison labor is the strongest argument in favor paying prisoners the minimum wage.”). 72 Id. at 327. 73 Applied Research Center, Race and Recession: How Inequity Rigged the Economy and How to Change the Rules, 24, http://arc.org/downloads/2009_race_recession_0909.pdf (last visited Apr. 30, 2011). This also assumes that all prisoners currently working in prison will be released when in fact many have deportation sentences and others will be victims of recidivism. More importantly, this line of reasoning does not account for the increased employer discrimination of ex-convicts that recurrs in the job market. 74 Matthew J. Lang, The Search For A Workable Standard For When Fair Labor Standards Act Coverage Should Be Extended To Prisoner Workers, 5 U. Pa. J. Lab. & Emp. L. 191 (2002)(“To resolve the inconsistencies that exist among the states, lower courts need clear guidance from Congress or the Supreme Court to aid the determination of whether certain types of prison labor are covered under the FLSA.”). 75 S. 41, 111th Cong. (2009) (Senator Ensign, Republican of Nevada, introduced a bill to the Committee on the Judiciary amending the Crime Control Act of 1990 by adding a 50-hour workweek for inmates in FPI and establishing a foreign labor substitute panel, which will use prison labor to manufacture or produce goods that

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the Internal Revenue Service has addressed the relationship between inmates and FPI noting that

inmates are not employees because:

“The relationship between the inmates and Federal Prison Industries, Inc., arises from the incarceration of the inmates on one hand and from the legal duty of the Corporation to provide rehabilitative labor on the other. It is not the legal relationship of the employer and employee.” 76

Although the justifications advanced by FPI for rehabilitation sound promising, they are in fact

empty phrases on which an entire corporate regime of exhausting prison labor has been built.

Prisoners within FPI are a captive labor force that is considered non-labor, as not employees. Yet

prison laborers produce, generate profits for FPI, and yet they are considered unskilled and a

security risk for private contractors. With such glaring inconsistencies of denying inmates

minimum wage and the chilling silence from Congress and the Supreme Court on the issue, it

should come as no surprise that at the state level, with PIECP, is just as problematic as FPI when

it comes to excluding prison laborers from basic labor protections.

E. The Prison Enhancement Certification Program

1. PIE: State Level Regulation of Prison Labor

PIECP has similar powers and purposes as FPI and it also consistently excludes prison

labor from FLSA undermining its own statutory provisions. Under this system, state jurisdictions

are free to contract with private firms to utilize prison labor for the manufacture of goods sold77

in interstate commerce if they satisfy all the criteria to receive contracts.78 Once the agency

meets the criteria for certification they are authorized to operate without the prohibitions on

otherwise would be manufactured by foreign labor). 76 Rev. Rul. 75-325, 1975-2 C.B. 415 (1975). 77 Supra note 10.78 Supra note 10 at (c)(2)(A)-(D). PIE programs are supposed to offer prisoners “wages at a rate which is not less than that paid for work of a similar nature.” States are also enabled to deduct up to 80% of inmate’s wages for victim compensation funds and other purposes. In addition, prisoners are supposed to participate in the program on a voluntary basis.

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prison-made goods in interstate commerce. 79 The Bureau of Justice Assistance is responsible for

monitoring the program and making sure that there is no abuse of compliance with the program.

80 PIE has the same flaws as FPI because they share the same rationales: (a) to enable prisoners

to make a contribution in society; (b) to offset the cost of incarceration, pay for crime victims

compensation; and, as always, to provide a means of reducing prison idleness and increase prison

inmate job skills. The PIE program has grown rapidly with currently, 37 states and 4 county-

based certified correctional industry programs operating in the United States, and these programs

manage at least 175 business partnerships with private industry. 81As of September 30, 2005,

PIECP generated more than $33 million for victims' programs, $21 million for inmate family

support, $97.5 million for correctional institution room and board costs, and $46.6 million in

state and federal taxes.82 In light of PIE’s rapid expansion and its high-sounding promises of

alleviating prison idleness and of increasing inmate job skills, how much of that is actually true?

One main problem affecting the rehabilitative purpose of prison labor is that prisoners are not

within an environment that mirrors the outside world since their time and lives belong to the

correctional institution. 83 Together PIE and FPI expressly purport to cure inmate idleness by

treating prison laborers as non-labor exempting them from FLSA coverage and using them for

profits that mainly benefits the correctional facility.

2. PIECP’s Failure To Provide Comparable Living Wages

79 Prison Industry Enhancement Certification Program Guideline, 64 Fed. Reg. at 17,0001. 80 Id. at 17,0002. 81 Prison Industry Enhancement Certification Program, Bureau of Justice Assistance, http :// www . ojp . usdoj . gov / BJA / grant / piecp . html (last visited Apr. 23, 2011). 82 Id. 83 See James J. Misrahi, Factories With Fences: An Analysis of The Prison Industry Enhancement Certification Program In Historical Perspective, 33 Am. Crim. L. Rev. 411, 424 (1996)(“Treating a prisoner as a free worker, however, demands a different institutional theory of correction than that which currently prevails in most traditional state industry and emphasizes work as a form of discipline or punishment.”).

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The PIE programs have given expansive reign to private contractors to use prison labor

for the manufacture of goods that are sold in interstate commerce. The deals work well because

the correctional facility provides the submission of inmates through force; inmates are then

placed on the assembly line of an unscrupulous subcontractor. 84 In Gambetta, the inmates

brought an action against the corporation that operated with the correctional facility seeking

payment of minimum wage. Although the decision does not say what the workers were

manufacturing, they were being paid 45 to 50 cents per hour, most of which went to repay the

cost of incarceration and victim restitution. 85 Florida had created a non-profit corporation,

PRIDE that operated the correctional work program of the state Department of Corrections under

which prison labor was used in a real-world business environment. 86 The inmates pointed out

that PRIDE was a private corporation that had a monopoly on the state’s correctional industries

when it generated over $70 million in annual revenues and therefore inmates working under the

program should be seen as employees. The Eleventh Circuit Court rejected this argument

viewing PRIDE as a state instrumentality that was nonetheless the managing entity that sells the

prison-made goods to agencies of the State, foreign entities, or any contract vendor of such

agencies. 87 The Gambetta decision implicitly followed a test of control holding that “DOC

statutorily determines which inmates may participate in the correctional work programs operated

by pride… The Department is required to view inmate assignments every six months.”88 The

court gave a lot of airtime to the corporate structure of PRIDE and how it was accountable to the

84 Gambetta v. Prison Rehabilitative Industries and Diversified Enterprises, Inc., 112 F.3d 119 (11th Cir. 1997)(denying inmates from FLSA coverage on grounds that the private entity working within the prison was a state instrumentatlity not covered by FLSA); Young v. Terry, WL 61606, 2 (2011)(“[P]risoner is not a slave… Simply put, prisoners do not have a constitutional right to be paid for their services.”); see also note 12. 85 Id. at 1121. 86Id. at 1121. 87 Gambetta, supra note 85 at 1122. 88 Id. at 1122.

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legislation of Florida for its operations as well as outlining the generous tax exemptions PRIDE

enjoyed from the state. Not only did the court deny the inmates from FLSA coverage, but it also

went on to emphatically state that there was a grave concern with the “dramatic effect” of

allowing prisoners FLSA coverage because the states were struggling with the mounting cost of

maintaining prisons. 89

The justifications for FPI and PIE must be meticulously scrutinized for their

inconsistencies and their continued denial of FLSA coverage. Prison idleness should not be the

strongest reason why private contractors are permitted to exploit prison labor from a cheap,

captive labor force. Without a comprehensive discussion on the disastrous consequences of

mandatory minimum sentences that greatly contribute to the increase in the prison population,

without a critical discussion on the toil of the War on Drugs on the number of both men and

women of color in the prison population, without a broader discourse regarding the plight of

inmates all we have is a brief one-sided conversation centered on inmate idleness and providing

skills to inmates who will be openly discriminated by employers once they are released.

Conclusion

There are more African American men in prison, probation, jail or parole, then there were

in slavery during the 1850s before the Civil War began.90 Given this horrendous reality, neither

private corporations nor states should be allowed to exploit prison labor to remedy their weak

economies, especially not with the continued denial of FLSA coverage. Moreover, private

89 Id. at 1124. Like most court decisions in this paper, the court here made no attempt to talk about the alarming disproportionate high rates of incarceration, the irreparable consequences of mandatory minimum sentences, not even a mention of how denying inmates FLSA coverage undermines prison industries because it gives them a competitive advantage over other employers. 90 Thoai Lu, Michelle Alexander: More Black Men in Prison Than Were Enslaved in 1850, Colorlines, http://colorlines.com/archives/2011/03/prison_system_holds_more_black_men_than_slavery_did.html (last visited Apr. 30, 2011)(commenting that Michelle Alexander’s book not only places the alarming mass incarceration figures in historical perspective, but also shows that prisons have become the latest form of social disencfranchisement for youth of color).

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contractors should not be authorized to profit from prison labor without meeting minimum wage

standards.91 Forced labor is not the solution to prison idleness, especially not in the face of an

increasing prison population and a staggering economy.92 First of all, the current focus of

criminalizing and throwing away the key enlarges the captive work force. At the same time, this

criminal emphasis informs the analysis of restrictive courts that typically side with the prison and

against inmate workers. Secondly, the high cost of incarceration should not fall on the shoulders

of prisoners so that they must pay for their own board. The justifications of FPI and PIE should

be closely scrutinized; there should be a ratio of prison labor and wages in relation to the profits

used toward vocational programs and the amount that goes to inmate upkeep and victim funds.93

As it stands, prisoners are vulnerable to exploitation, without minimum wage, and they are

placed outside of the national economy where they remain subjugated and invisible similar to the

status of low-wage immigrant workers.

91 See, e.g., Abe Louise Young, BP Hires Prison Labor to Clean Up Oil Spill While Coastal Residents Struggle, The Nation, http :// www . thenation . com / article /37828/ bp - hires - prison - labor - clean - spill - while - coastal - residents - struggle (last visited Apr. 23, 2011)(noting that after BP caused one of the largest oil spills to date, BP saved money in the clean up by subcontracting to use prison laborers who were cheap and easy to silence); Robbie Brown et al., Enlisting Prison Labor to Close Budget Gaps, The New York Times, http://www.nytimes.com/2011/02/25/us/25inmates.html?_r=1 (last visited Apr. 23, 2011)(mentioning that there is an expanding practice to combat cuts in federal financing by resorting to inmate labor as opposed to private contractors or government employees). 92 Instead of focusing on incarceration there should be stronger efforts to channel resources into education and towards the living standards of poor communities of color.93 There could also be a complete overhaul of the entire system, a larger battle with a bigger ask, but given the urgency of fiscal deficits and an attitude of race to the bottom, something should be done whether broad or narrow.

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