United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 98-3625

___________

Matthew W. Barnett, *

*

Appellant, *

* Appeal from the United States

v. * District Court for the

* Western District of Missouri.

Young Men’s Christian Association, *

Inc.; George Hartsfield, Director, * (UNPUBLISHED)

*

Appellees. *

___________

 Submitted: February 25, 1999

 Filed: March 4, 1999 

___________

Before FAGG, HANSEN, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

___________

PER CURIAM.

Missouri inmate Matthew W. Barnett appeals from the district court’s dismissal

under 28 U.S.C. § 1915 of his action under the Fair Labor Standards Act (FLSA), 29

U.S.C. §§ 201-219, and state law. We reverse.

Barnett filed this action against Young Men’s Christian Association, Inc.

(YMCA), and George Hartsfield, a general manager employed by YMCA, seeking

punitive and compensatory damages, and to proceed in forma pauperis (IFP). In

relevant part, Barnett alleged that he worked at a YMCA as part of a work-release
-2-

furlough program. YMCA employees would pick up Barnett at the prison and take

him to the YMCA where he worked forty hours a week, essentially as a maintenance

worker. Prison officials did not supervise or make “spot checks” of Barnett at the

YMCA, and Hartsfield, who maintained employment records, had the power to hire

and fire Barnett, and to control his schedule, conditions of employment, and rate of

pay. Barnett “freely contracted with the YMCA” to sell his labor for which YMCA

directly paid him $1.00 an hour. Barnett claimed that he was thus an “employee”

under the FLSA, and was entitled to be paid at the minimum wage. Barnett also

asserted state law claims arising from YMCA’s failure to pay him the minimum wage,

and from his discharge after he voiced his opinions about the inadequacy of his wage.

Under 28 U.S.C. § 1915(e)(2), district courts “shall dismiss” cases filed IFP “at

any time if the court determines” that the action “is frivolous or malicious” or “fails

to state a claim on which relief may be granted.” We conclude Barnett’s complaint

neither is frivolous nor fails to state a claim.

The FLSA provides that “[e]very employer shall pay to each of his employees”

not less than the minimum wage. See 29 U.S.C. § 206(a). An “employee” is defined

as “any individual employed by an employer,” 29 U.S.C. § 203(e)(1); and “employer”

is defined as “any person acting directly or indirectly in the interest of an employer

in relation to an employee,” 29 U.S.C. § 203(d). The Supreme Court has suggested

that “employee” is expansively defined under the FLSA, see Nationwide Mut. Ins.

Co. v. Darden, 503 U.S. 318, 325-26 (1992), and has stated that courts should

determine whether an individual is an “employee” in light of the “economic reality”

of the situation under the totality of the circumstances, rather than rely on technical

labels, see Goldberg v. Whitaker House Co-op., Inc., 366 U.S. 28, 33 (1961).

Circuit courts have consistently rejected the notion that all prisoners are

categorically excluded from coverage under the FLSA. See Danneskjold v. Hausrath,

82 F.3d 37, 40-41 (2d Cir. 1996) (rejecting per se rule that prisoners may never be
-3-

considered “employees”); Henthorn v. Department of Navy, 29 F.3d 682, 685 (D.C.

Cir. 1994) (“most courts refuse to hold that prisoners are categorically barred from

ever being %employees&”); Hale v. Arizona, 993 F.2d. 1387, 1393 (9th Cir.) (en banc)

(finding that FLSA may be applicable to prisoners under certain circumstances), cert.

denied, 510 U.S. 946 (1993); Vanskike v. Peters, 974 F.2d 806, 808 (7th Cir. 1992)

(“prisoners are not categorically excluded from the FLSA’s coverage simply because

they are prisoners”), cert. denied, 507 U.S. 928 (1993); Watson v. Graves, 909 F.2d

1549, 1554 (5th Cir. 1990) (holding that status as inmate does not foreclose inquiry

into FLSA coverage).

Two circuit courts have held that a prisoner may be an employee for purposes

of the FLSA when the prisoner voluntarily works outside the prison for a private

company that supervises and directly pays the prisoner. See Watson, 909 F.2d at

1554-56 (finding that inmates participating in work-release program were

“employees” of private construction company where inmates had not been sentenced

to hard labor, law enforcement officers did not make routine or “spot” checks of job

sites, and company paid inmates directly); Carter v. Dutchess Community College,

735 F.2d 8, 15 (2d Cir. 1984) (holding that college might have “employed” inmates

as tutors where college made proposal to employ inmates, suggested wage, developed

eligibility criteria, recommended particular inmates for positions, was not required

to take inmates it did not want, decided hours inmates worked, and sent compensation

directly to inmates’ accounts). Other circuit courts have made statements consistent

with the holdings in Watson and Carter. See, e.g., Villarreal v. Woodham, 113 F.3d

202, 206-07 (11th Cir. 1997) (“the more indicia of traditional, free-market

employment the relationship between the prisoner and his putative ‘employer’ bears,

the more likely it is that the FLSA will govern the employment relationship” (internal

quotation and citation omitted)); Danneskjold, 82 F.3d at 44 (holding that FLSA

applies where prisoner’s labor “for a private employer in the local or national

economy would tend to undermine the FLSA wage scale”); Reimonenq v. Foti, 72

F.3d 472, 476 (5th Cir. 1996) (finding that although sheriff-custodian was not subject
-4-

to FLSA liability for inmate on work-release, inmate’s “free-world employer” was

bound by the statute and subject to FLSA liability); Henthorn, 29 F.3d at 686 (holding

that FLSA may apply where prisoner voluntarily sells labor in exchange for wage

paid by alleged employer other than prison itself).

In deciding that Barnett was not covered by the FLSA, the district court relied

on McMaster v. Minnesota, 30 F.3d 976 (8th Cir. 1994), cert. denied, 513 U.S. 1157

(1995). In McMaster, we held that inmates “who are required to work as part of their

sentences and perform labor within a correctional facility as part of a state-run prison

industries program are not %employees&” under the FLSA. Id. at 980. We noted that

the primary purpose of the FLSA–providing minimum standards of living for

workers--had no application in the prison context, and that the second purpose of the

FLSA--protecting competition--was addressed by the Ashurst-Sumners Act, 18

U.S.C. §§ 1761, 1762 (criminalizing transport in interstate commerce of any goods

produced by prisoner). See id. McMaster does not control here for two reasons.

First, we note that the FLSA’s goal of protecting competition is not served by

denying coverage to Barnett because the Ashurst-Sumners Act would not apply to

preserve competition here: Barnett did not make goods to be sold in interstate

commerce--he provided maintenance services. Second, this suit presents materially

different facts than those before us in McMaster. This case is factually much closer

to Watson or Carter, both of which we distinguished in McMaster. See id. at 979-80

(finding Watson distinguishable because inmates did not work in jail, were picked up

at jail by private contractor, were left unguarded, were not assigned to work as part

of their sentences but volunteered, and were paid directly; finding Carter

distinguishable because inmates there sought relief against private company rather

than prison, and because inmates were not required to work as part of their

sentences). This suit was brought against a private entity, as was the case in both

Watson and Carter, and not against a branch or representative of the county, state, or

federal government, or against the prison or prison industries--where courts have
-5-

denied FLSA coverage to prisoners. Cf., e.g., Villarreal, 113 F.3d at 204; Nicastro

v. Reno, 84 F.3d 1446, 1447 (D.C. Cir. 1996) (per curiam); Reimonenq, 72 F.3d at

474; Franks v. Oklahoma State Indus., 7 F.3d 971, 972 (10th Cir. 1993); Hale, 993

F.2d. at 1389; Harker v. State Use Indus., 990 F.2d 131, 132 (4th Cir. 1993);

Vanskike, 974 F.2d at 806; Miller v. Dukakis, 961 F.2d 7, 8 (1st Cir.) (per curiam),

cert. denied, 506 U.S. 1024 (1992).

Although the district court suggested YMCA’s status as a nonprofit

organization formed for a public purpose--rather than a private company--

distinguished the present case from Watson, we see no reason why this status should

immunize YMCA from the requirements of the FLSA in the present case. See Dole

v. Tony & Susan Alamo Foundation, 915 F.2d 349, 352 (8th Cir. 1990) (holding that

FLSA contains no exceptions for commercial activities conducted by religious or

other nonprofit organizations; citing Tony & Susan Alamo v. Secretary of Labor, 471

U.S. 290, 297 (1985)).

Thus, treating Barnett’s allegations as true, we conclude he has stated a claim

under the FLSA. Accordingly, we reverse and remand for further proceedings

consistent with this opinion.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.