Court Opinion

ID: 8989906
Source: CourtListenerOpinion
Date Created: 2022-11-27 12:06:39.774148+00
Date Added: 2024-06-11T17:10:53.451002
License: Public Domain

RYMER, Circuit Judge,
concurring in part and concurring in the judgment:
I concur in all but Part II-B of Judge Trott’s opinion, and I agree that the district court correctly granted summary judgment because on the record in this case, neither Cutter Biological nor the Arizona Department of Corrections is an employer for purposes of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. I write separately to state my reasons for concluding that the inmate assistants are not covered by the FLSA.
The material facts are undisputed. Inmates at the Arizona State Prison at Florence, Arizona worked in various capacities at a Plasma Center located at the institution and operated by Cutter pursuant to contracts between Cutter and the Director of the Department of Corrections. Under these contracts the Department of Corrections assigned prisoners to Cutter as assistants to Cutter staff. Approval and assignment of workers was at the Department’s discretion. The Plasma Center paid the Department of Corrections twelve dollars per week for each prisoner who worked there. All compensation for prisoner services at the Center was paid directly to the Inmates Account Office, which in turn used the funds to pay the inmate laborers. There were no agreements between the Plasma Center and any prisoner regarding compensation or conditions of employment. Routine, day-to-day supervision of the inmate assistants at the Center was by Cutter. While Cutter from time to time made work assignments and suggested removals, there is no evidence that it could trump prison authorities in terms of hiring or firing, rate of pay, or time of work. Cutter maintained no employment records other than a list of names of prisoner assistants.
The parties dispute only whether these facts make Cutter or the Department an “employer” within the meaning of the FLSA. That question is a legal issue. Bonnette v. California Health and Welfare Agency, 704 F.2d 1465, 1469 (9th Cir.1983); see Goldberg v. Whitaker House Cooperative, Inc., 366 U.S. 28, 81 S.Ct. 933, 6 L.Ed.2d 100 (1961).
In resolving it, we are obliged to apply the “economic realities” test.1 Bonnette, 704 F.2d at 1470. That test requires that we consider the totality of the circumstances, including whether the alleged employer had the power to hire and fire employees, supervised and controlled employee work schedules or conditions of employment, determined the rate and method of payment and maintained employment records. Id.
In this case we must determine whether either the institution or Cutter, an outside entity, is an “employer” for FLSA purposes. That inquiry, in turn, impels us to recognize that two or more employers may jointly employ someone for purposes of the FLSA. Id. at 1469. Unlike the dissent, however, I do not believe that either the institution or Cutter passes the threshold *1329question of whether it, alone, is an “employer.” 2
Bonnette is the seminal opinion in this circuit. A county social worker determined a recipient’s financial eligibility and need for chore worker services, the tasks to be performed and the hours per week required to perform the task; the recipient “bought” the chore worker services with money provided by the county and was responsible for hiring, firing and supervising. Under those circumstances we held that the fact that the county delegated various responsibilities to recipients did not alter the county’s complete economic control and the “economic reality” that the county employed chore workers to perform social services for the benefit of recipients; rather, it made them joint employers. Put another way, an “employer” under the FLSA may not shield itself from responsibility under the Act on the ground that another person or entity exercises some control over the employee. Yet neither Bonnette nor any case following it is authority for finding that two entities, neither of whom is an “employer” under the Act, may nevertheless jointly be an “employer” because together they have sufficient control over the nature and structure of the employment relationship.
The statutory scheme is consistent with this interpretation because it assumes that at least one of the allegedly joint employers is an “employer” under the Act. Section 203(d) provides that an “ ‘[ejmployer’ includes any person acting directly or indirectly in the interest of an employer in relation to an employee_” 29 U.S.C. § 208(d), while an “ ‘employee’ means any individual employed by an employer.” 29 U.S.C. § 203(e)(1). Further, under the regulations, all of the employee’s work for all of the joint employers is considered as one employment and all joint employers are responsible, both individually and jointly, for compliance. 29 C.F.R. § 791.2(a) (1990). Thus, while there may be more than one “employer” of an “employee” covered by the Act, Falk v. Brennan, 414 U.S. 190, 195, 94 S.Ct. 427, 431, 38 L.Ed.2d 406 (1973); Bonnette, 704 F.2d at 1469, either the Department of Corrections or Cutter or both must meet the statutory definition.
Prisoners cite no authority for holding a Department of Corrections and an outside employer to be joint employers in the context of inmate labor. No reason occurs for us to be the first to so hold on the record in this case.3
*1330In this case, neither alleged “employer” possesses, on its own, the characteristics of an employer. It is undisputed that the contract which governed the employment relationship is between Cutter and the state. It vests the power to hire and fire solely with the state. The Department of Corrections had ultimate responsibility for assigning and approving inmates for work in the Cutter lab. The rate and method of pay was within the exclusive province of the DOC; inmates who work at the Plasma Center are paid by the Department, not by Cutter. Work was performed in the prison, not outside. There is no evidence that Cutter kept employment records for the inmate prisoners, proposed the arrangement, invited inmates to participate, suggested the wage, decided who could work how much, or had criteria for Center assistants. Cf. Carter v. Dutchess Community College, 735 F.2d 8, 15 (2d Cir.1984) (outside entity had made initial proposal to “employ” inmate workers; suggested wage; developed eligibility criteria; recommended inmates for the positions; was not required to take any inmate it did not want; decided how many sessions and for how long an inmate would be permitted to tutor; and sent compensation directly to inmate’s prison account).4
Prison officials paid inmate laborers, controlled how much they were paid and how payments were made, determined which inmates could work in the lab (albeit sometimes in consultation with Cutter) and for how long, and had responsibility for discipline. There is no evidence that the DOC had a pecuniary, rather than penological, interest in inmate labor.
Considering all these facts, the district court did not err in concluding that Cutter was not an employer for purposes of the FLSA. Unlike Carter, where the plaintiff was an inmate in the Fishkill Correctional Facility and was employed outside of the prison as a teaching assistant at Dutchess Community College, and Watson v. Graves, 909 F.2d 1549 (5th Cir.1990), where the plaintiff was on a work release program outside the jail, and the courts found triable issues regarding FLSA coverage, in this case the inmates were assigned to the Cutter lab inside the institution, like other cases which have found no employer-employee relationship. See, e.g., Alexander v. Sara, Inc., 559 F.Supp. 42, 43-44 (M.D.La.), aff'd per curiam, 721 F.2d 149 (5th Cir.1983) (no contractual relationship between inmates and outside company; compensation paid to State, not to inmates; no right on part of outside company to reject inmate assigned to work in plasma program); Sims v. Parke Davis & Co., 334 F.Supp. 774, 783-87 (E.D.Mich.), aff'd per curiam, 453 F.2d 1259 (6th Cir.1971), cert. denied, 405 U.S. 978, 92 S.Ct. 1196, 31 L.Ed.2d 254 (1972) (no contractual relationship between inmates and outside company; outside company relinquished to prison officials normal rights of employer to determine manpower needs, who workers would be and to discharge unsatisfactory workers); Hudgins v. Hart, 323 F.Supp. 898, 899 (E.D.La.1971) (no contractual relationship between outside company and inmates; prison officials assigned inmates to work; money was sent to prison, which decided how much to pay); Huntley v. Gunn Furniture Co., 79 F.Supp. 110, 111-13 (W.D.Mich.1948) (sole control in prison).
Nor did it err in concluding that the Department of Corrections was not an employer. Even though our decision in Baker v. McNeil Island Corrections Center, 859 F.2d 124 (9th Cir.1988) forecloses a holding that as a matter of law a prison may never be an “employer” of an inmate laborer,5 it *1331does not define what constitutes such a relationship and has nothing pertinent to say about the showing required for coverage of a prison inmate under the FLSA. Rather, we must decide the issue case by case.
The facts in this case show that inmate labor belongs to the institution. That being so, there is no need to protect “the standard of living and general well-being of the worker in American industry.” Alexander, 721 F.2d at 150. As put by the Fifth Circuit in Watson, “[njeither is there fear of ‘upsetting the desired equilibrium in the work place,’ because the ‘work place’ was the prison itself. See Carter, 735 F.2d at 13. From that fact alone it is evident there was no unfair competition among workers in job markets outside the prison.” 909 F.2d at 1555. The inmate assistants were not on a work release program, did not work off premises and were not free not to work. The relationship between prison and prisoner was entirely custodial, bearing none of the indicia of a traditional employment relationship such as the exercise of discretion and exchange of wages for labor. No other court has found that an employer-employee relationship exists under these circumstances6 and I believe the district court correctly determined that no such relationship exists in this ease.

. While I agree with Judge Trott that it is tough to imagine that the Congress contemplated minimum wage levels for inmates, I respectfully disagree that it is necessary to reach this issue in this case. Also, to reach and resolve the question as he appears to would put us in conflict with the Second Circuit, which, in Carter v. Dutchess Community College, 735 F.2d 8, 13 (2d Cir.1984), considered and rejected the argument that Congress intended to exclude the category of prisoners from FLSA coverage. See also Watson v. Graves, 909 F.2d 1549, 1554 (5th Cir.1990) (status as an inmate does not foreclose inquiry into FLSA coverage). Because we are to avoid creating intercircuit conflict when possible, United States v. Gwaltney, 790 F.2d 1378, 1388 n. 4 (9th Cir.1986), cert. denied, 479 U.S. 1104, 107 S.Ct. 1337, 94 L.Ed.2d 187 (1987), I write separately.

. The dissent's discussion of the joint employer doctrine appears to be premised on its conclusion that both Cutter and the state are employers. Because I believe there is no "employer” in this case, I would not reach the issue of joint employment.
To the extent the dissent assumes that characteristics of the prison should be aggregated with characteristics of Cutter so that together, or separately, they constitute an "employer,” I disagree. In this case, no one argues that the prison and Cutter, together, form a single legal entity. If the relationship between Cutter and the prison gave rise to some cognizable legal entity, such as a partnership or joint venture, then the characteristics of each could be aggregated to show that that single entity was an "employer.” See NLRB v. Browning-Ferris Indus., 691 F.2d 1117, 1122 (3d Cir.1982) (NLRB case). The question of whether the prison and Cutter form some sort of new entity is not before us, however. Unless either the prison, alone, or Cutter, alone, is an "employer," then the inmate assistants are not covered by the FLSA.

. The cases upon which the dissent relies for the proposition that two parties are joint employers if they share or co-determine those matters governing the essential terms and conditions of employment, NLRB v. Browning-Ferris Indus., 691 F.2d 1117, 1122-23 (3d Cir.1982); NLRB v. Greyhound Corp., 368 F.2d 778, 780 (5th Cir.1966); NLRB v. Checker Cab Co., 367 F.2d 692, 698 (6th Cir.1966), cert. denied, 385 U.S. 1008, 87 S.Ct. 715, 17 L.Ed.2d 546 (1967), arise under a different statute and concern whether one or more ostensibly separate entities is a "single employer" or "joint employer” for purposes of complying with the National Labor Relations Act. They are consistent with the point that some one entity must be an "employer" and add nothing to the analysis. Nor do independent contractor cases such as Castillo v. Givens, 704 F.2d 181 (5th Cir.1983), and Usery v. Pilgrim Equipment Co., 527 F.2d 1308 (5th Cir.), cert. denied, 429 U.S. 826, 97 S.Ct. 82, 50 L.Ed.2d 89 (1976), provide a useful analogy. In those cases, the defendants, alleged employers, claimed that third parties who hired and fired workers and paid wages to them had sufficient control over them to be independent contractors, such that the workers were not the defendants’ employees. They are not joint employer cases, see Castillo, 704 F.2d at 188, and their rationale — that statutory coverage exists for *1330those who are dependent upon the business to which they render service for their livelihood— is inapplicable to the prisoner labor at issue in this case.

. There also is no evidence that the Cutter Plasma Center caused unfair competition among employers competing for plasma business or among workers looking for jobs. Thus, even assuming these concerns are material when the inmate is confined to prison and has an obligation to work, they are not implicated in this case.

. For example, Baker left open the possibility that an inmate might be an employee of a prison for purposes of Title VII where the inmate has an option of whether or not to work. Here, however, Arizona law requires inmates to work; they have no choice.

. In Wentworth v. Solem, 548 F.2d 773 (8th Cir.1977) (per curiam) the court expressed doubt that Congress intended the FLSA to cover an inmate working in prison industries but its holding, that an inmate working in bookbinding was not an employee, was based on National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976), which has since been overturned. Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985).