By Robert Iafolla
An Aramark Corp. subsidiary will urge a federal appeals court in San Francisco to toss a lawsuit from non-convicted inmates at a California county jail who worked for the company without being paid.
The US Court of Appeals for the Ninth Circuit will hear oral argument Monday on whether California’s minimum wage and overtime protections apply to work performed by people held in county jails who haven’t been convicted, such as pre-trial defendants and immigration detainees.
Aramark Correctional Services LLC and Alameda County are challenging a federal district judge’s 2021 ruling that denied their motion to dismiss the proposed class action.
The case comes at a time of increasing attention on the broad use of unpaid or poorly compensated labor in the US correctional system. Roughly two-thirds of the 1.2 million people incarcerated in state and federal prisons work, according to a June report from the American Civil Liberties Union. Those prisoners produce more than $11 billion in goods and services each year, while earning between 13 cents and 52 cents per hour on average, the report said.
Colorado enacted a law in March providing minimum wage to some state prison inmates employed by private companies. The Ninth Circuit is mulling a private prison company’s challenge to $23.2 million in damages it faces for its $1-per-day immigration detainee work program, while the Fourth Circuit is considering whether to revive a class lawsuit against a Pennsylvania county’s inmate work program.
A proposed amendment to the California Constitution barring slavery and involuntary servitude—effectively banning unpaid prison labor—failed in the legislature in June, following a state estimate that it would cost $1.5 billion in 2022 to pay inmates the $15 per hour minimum wage. State Sen. Sydney Kamlager (D), who championed the measure, blasted lawmakers on Twitter for their “total devotion to the Prison Industrial Complex.”
The Ninth Circuit case involving Aramark will be heard by Circuit Judges Sidney Thomas, a Clinton appointee, and Milan Smith, a George W. Bush appointee. District Judge George Wu, a George W. Bush appointee in the Central District of California, will round out the three-judge panel.
A group of current and former non-convicted inmates filed a class action in 2019 against Aramark, Alameda County, and the county sheriff in in the US District Court for the Northern District of California. Their jail-time work involved preparing packaged meals that were sold to third parties outside of the county.
District Judge Jon Tigar, an Obama appointee, refused to dismiss the case in 2021.
The inmates are protected by California labor law, considering that their pay isn’t regulated by the state’s penal code or any relevant local ordinance, the judge said in his order.
But a few months later, Tigar granted the defendants’ special request to challenge his decision despite it not being a final disposition of the case.
Aramark argued in a brief filed with the Ninth Circuit that Tigar’s ruling “opened the door to substantial, state-wide cost increases for the counties that house and provide services for county inmates.”
California law leaves it to each county to decide questions of compensation for work performed by inmates at county jails, Aramark said. The delegation framework set forth in the California’s penal code is consistent with a 1990 voter initiative that amended the state constitution to allow public-private prison labor programs, the company said.
That initiative, Proposition 139, created specific pay requirements for work performed by state inmates, while giving counties exclusive authority to set employment terms for county inmates, Alameda County said in its brief.
“Thus, county inmates are entitled only to the non-monetary benefits of participating in a county work program, in the absence of a local ordinance authorizing monetary compensation,” the county said. “As it relates to this case, the County has not enacted such an ordinance.”
But neither the ballot initiative nor state labor law refers to people detained in county jail who haven’t been convicted of a crime, the inmates said in their brief.
“Appellants ask the Court to accept their reasoning that the Labor Code does not apply to non-convicted detainees because it does not expressly mention them,” they said. “They simultaneously ask the Court to accept the argument that Proposition 139 applies to non-convicted detainees working for private companies in detention, because it does not expressly mention them.”
California’s penal code doesn’t override the employment relationship the inmates have with Aramark under state law, the inmates said. The penal code’s section on paid work applies to detainees involved with public works programs, not private-public programs like Alameda County’s partnership with Aramark, they said.
The inmates’ lawyer, Dan Siegel of Siegel, Yee, Brunner & Mehta, said the Labor Code is “very broad in its application,” and should show what the applicable pay rates will be for work done for Aramark.
The parties continue to litigate the case at the district court level as the appeal is pending, Siegel noted. A hearing on the inmates’ bid for approval of a class—ranging between 500 and 1,000 members—is set for Nov. 17, he said.
Aramark and Alameda County’s attorney, Adam Hofmann of Hanson Bridgett LLP, declined to comment on the case.
The case is Ruelas v. County of Alameda, 9th Cir., No. 21-16528, oral argument 10/17/22.
To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com
To contact the editor responsible for this story: Laura D. Francis at lfrancis@bloomberglaw.com; Rebekah Mintzer at rmintzer@bloombergindustry.com
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