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NICASTRO v. CLINTON

April 28, 1995

WILLIAM M. NICASTRO, et al., Plaintiffs,
v.
WILLIAM J. CLINTON, et al., Defendants.



The opinion of the court was delivered by: PAUL L. FRIEDMAN

 William M. Nicastro and Roy D. Little are federal prison inmates housed at the United States Penitentiary in White Deer, Pennsylvania, who have brought a claim under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., ("FLSA") against the Executive Directors of Federal Prison Industries ("FPI"), among others. *fn1"

 Plaintiffs bring this action pro se, alleging that federal prisoners who work for FPI (1) are "employees" under the Fair Labor Standards Act, and (2) are entitled to a minimum wage because (3) FPI is a self-sustaining private corporation independent of the government. Plaintiffs also claim that FPI is required by statute to abide by federal procurement standards applicable to public contracts, particularly those standards pertaining to minimum wage. *fn2" Plaintiffs seek back pay, liquidated and punitive damages, and declaratory and injunctive relief. Defendants have moved to dismiss the amended complaint under Rule 12(b), Fed. P. Civ. P., or, in the alternative, for summary judgment under Rule 56, Fed. R. Civ. P. The Court has concluded that plaintiffs' complaint should be dismissed for failure to state a claim on which relief can be granted under Rule 12(b)(6).

 I. MOTION TO DISMISS

 In considering a motion to dismiss, the Court must assume the truth of the factual allegations of the complaint and liberally construe them in favor of the plaintiff. It may dismiss the complaint for failure to state a claim only if it appears that the plaintiff can prove no set of facts in support of his or her claim that would entitle the plaintiff to relief. Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 111 S. Ct. 1842, 1845, 114 L. Ed. 2d 366 (1991); Kowal v. MCI Communications Corp., 305 U.S. App. D.C. 60, 16 F.3d 1271, 1276 (D.C. Cir. 1994); Kenneda v. United States, 880 F.2d 1439, 1442 (D.C. Cir. 1989). Although pro se complaints are held "to less stringent standards than formal pleadings drafted by lawyers," Haines v. Kerner, 404 U.S. 519, 520, 30 L. Ed. 2d 652, 92 S. Ct. 594 (1972), and a plaintiff is entitled to all favorable inferences that may be drawn from his or her allegations, Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974), "a pro se complaint, like any other, must present a claim upon which relief can be granted by the court." Henthorn v. Department of Navy, 308 U.S. App. D.C. 36, 29 F.3d 682, 684 (D.C. Cir. 1994) (citation omitted).

 II. ANALYSIS

 The primary purpose of the FLSA is to provide workers with the minimum standard of living necessary for health, efficiency and general well-being. 29 U.S.C. § 202(a); see Mitchell v. Robert DeMario Jewelry Inc., 361 U.S. 288, 292, 4 L. Ed. 2d 323, 80 S. Ct. 332 (1960). The Act seeks to accomplish this goal by requiring employers to pay their employees minimum wages and overtime compensation for their work. 29 U.S.C. §§ 206(a)(1), 207(a)(1). The FLSA is also intended to prevent unfair competition through the use of unpaid labor. 29 U.S.C. § 202(a)(3). Plaintiffs argue that federal prisoners employed by FPI are "employees" covered by the minimum wage provisions of the FLSA.

 Under the traditional four-factor economic reality test most often used in determining if a worker is an employee covered by the FLSA, the relevant inquiries are whether the alleged employer (1) had the power to hire and fire the employee, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records. Henthorn v. Department of Navy, 29 F.3d at 684 (citing Bonnette v. California Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1983)). When the economic reality test has been applied to prison labor, inmates generally have been found to fall outside the coverage of the FLSA. See, e.g., Emory v. United States, 2 Cl. Ct. 579, 580 (Ct. Cl. 1983), aff'd, 727 F.2d 1119 (Fed. Cir. 1983); Vanskike v. Peters, 974 F.2d at 810. *fn3"

 The District of Columbia Circuit has recognized that the traditional economic reality test fails "'to capture the true nature of [most prison employment] relationship[s] for essentially [it] presuppose[s] a free labor situation.'" Henthorn v. Department of Navy, 29 F.3d at 686 (quoting Vanskike v. Peters, 974 F.2d at 809). The court in Henthorn, distinguishing those rare cases in which a prisoner is voluntarily selling his or her labor, explained that

 
in cases . . . in which the prisoner is legally compelled to part with his labor as part of a penological work assignment and is paid by the prison authorities themselves, the prisoner may not state a claim under the FLSA, for he is truly an involuntary servant to whom no compensation is actually owed.

 Id. The Court therefore held that

 
a prerequisite to finding that an inmate has "employee" status under the FLSA is that the prisoner has freely contracted with a non-prison employer to sell his labor. Under this analysis, where an inmate participates in a non-obligatory work release program in which he is paid by an outside employer, he may be able to state a claim under the FLSA for compensation at the minimum wage. However, where the inmate's labor is compelled and/or where any compensation he receives is set and paid ...

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