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PLN Prevails in Motion to Unseal Settlement in CCA Class Action FLSA Case
On August 28, 2009, the U.S. District Court for the District of Kansas unsealed a settlement agreement in a nationwide class-action lawsuit against Corrections Corporation of America (CCA), the nation’s largest private prison firm. On July 27, 2009, Prison Legal News had filed a motion to intervene in the suit for the purpose of unsealing the settlement.
The lawsuit, brought under the Fair Labor Standards Act (FLSA), alleged that CCA had required some of its employees to perform work duties “without compensating them for all such hours worked as required by the FLSA.” Specifically, CCA was accused of not paying certain employees for pre- and post-shift work, including roll calls, obtaining weapons and equipment, attending meetings and job assignment briefings, and completing paperwork.
The parties reached a settlement that was approved by the court on February 12, 2009; however, the settlement was sealed and did not become publicly known until June. PLN argued that as a matter of public policy, documents filed in federal court should remain open to the public. This was particularly true for CCA, since almost all of CCA’s income is derived from public funds through government contracts.
Further, private prison firms, including CCA, often claim they can save money. Since about 70-80% of prison operating expenses are related to staffing costs, it was noteworthy that CCA apparently “saved” money by failing to pay its employees the wages to which they were entitled.
“The public has a right to know how its tax dollars are being spent when government agencies contract with for-profit companies like CCA to operate prisons and jails, especially when such companies are accused of violating the law to increase their profit margins,” said PLN associate editor Alex Friedmann.
In its August 28 order, the court agreed that the settlement and related documents should be unsealed. U.S. District Court Judge John W. Lungstrum wrote that the confidentiality of the settlement was insufficient “to outweigh the strong presumption in favor of public access to judicial records,” and that “no evidence whatsoever” had been presented to show that unsealing the settlement agreement “would cause significant damage or prejudice to the parties. …”
The unsealed documents reveal that the maximum gross settlement amount payable by CCA is $7 million, which includes up to $2.33 million in fees for the plaintiffs’ attorneys who brought the FLSA suit. The actual amount of the settlement and attorney fees will depend on the total number of class members who opt-in to the settlement. Seven of the named plaintiffs in the case, including the lead plaintiff, will receive an additional $2,500 each.
CCA was responsible for providing a list of the potential class members – consisting of current and former CCA employees – so they could be notified of the settlement. There are over 30,600 potential class members nationwide. PLN is aware of at least one former CCA employee who did not receive notice of the settlement but who was later determined to be eligible by the claims administrator. The deadline for submitting claims was July 27, 2009.
The settlement provides that current CCA employees who opt-in to the settlement must agree, among other requirements, that they will “report any alleged instruction or suggestion by CCA or any CCA employee to work ‘off the clock’ or to otherwise under- or over-report the amount of working time.” CCA expressly denied any liability or wrongdoing and wrote that the company had agreed to settle to avoid “the costs and disruption of ongoing litigation.”
The class action FLSA suit against CCA is Barnwell v. Corrections Corp. of America, U.S.D.C. (D. Kan.), Case No. 2:08-CV-02151-JWL-DJW. PLN was ably represented pro bono in its motion to intervene by Stephen D. Bonney, Chief Counsel and Legal Director of the ACLU of Kansas and Western Missouri. The settlement and documents in the case are now available on PLN’s website.
The lawsuit, brought under the Fair Labor Standards Act (FLSA), alleged that CCA had required some of its employees to perform work duties “without compensating them for all such hours worked as required by the FLSA.” Specifically, CCA was accused of not paying certain employees for pre- and post-shift work, including roll calls, obtaining weapons and equipment, attending meetings and job assignment briefings, and completing paperwork.
The parties reached a settlement that was approved by the court on February 12, 2009; however, the settlement was sealed and did not become publicly known until June. PLN argued that as a matter of public policy, documents filed in federal court should remain open to the public. This was particularly true for CCA, since almost all of CCA’s income is derived from public funds through government contracts.
Further, private prison firms, including CCA, often claim they can save money. Since about 70-80% of prison operating expenses are related to staffing costs, it was noteworthy that CCA apparently “saved” money by failing to pay its employees the wages to which they were entitled.
“The public has a right to know how its tax dollars are being spent when government agencies contract with for-profit companies like CCA to operate prisons and jails, especially when such companies are accused of violating the law to increase their profit margins,” said PLN associate editor Alex Friedmann.
In its August 28 order, the court agreed that the settlement and related documents should be unsealed. U.S. District Court Judge John W. Lungstrum wrote that the confidentiality of the settlement was insufficient “to outweigh the strong presumption in favor of public access to judicial records,” and that “no evidence whatsoever” had been presented to show that unsealing the settlement agreement “would cause significant damage or prejudice to the parties. …”
The unsealed documents reveal that the maximum gross settlement amount payable by CCA is $7 million, which includes up to $2.33 million in fees for the plaintiffs’ attorneys who brought the FLSA suit. The actual amount of the settlement and attorney fees will depend on the total number of class members who opt-in to the settlement. Seven of the named plaintiffs in the case, including the lead plaintiff, will receive an additional $2,500 each.
CCA was responsible for providing a list of the potential class members – consisting of current and former CCA employees – so they could be notified of the settlement. There are over 30,600 potential class members nationwide. PLN is aware of at least one former CCA employee who did not receive notice of the settlement but who was later determined to be eligible by the claims administrator. The deadline for submitting claims was July 27, 2009.
The settlement provides that current CCA employees who opt-in to the settlement must agree, among other requirements, that they will “report any alleged instruction or suggestion by CCA or any CCA employee to work ‘off the clock’ or to otherwise under- or over-report the amount of working time.” CCA expressly denied any liability or wrongdoing and wrote that the company had agreed to settle to avoid “the costs and disruption of ongoing litigation.”
The class action FLSA suit against CCA is Barnwell v. Corrections Corp. of America, U.S.D.C. (D. Kan.), Case No. 2:08-CV-02151-JWL-DJW. PLN was ably represented pro bono in its motion to intervene by Stephen D. Bonney, Chief Counsel and Legal Director of the ACLU of Kansas and Western Missouri. The settlement and documents in the case are now available on PLN’s website.
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Related legal case
Barnwell v. Corrections Corp. of America
| Year | 2009 |
|---|---|
| Cite | U.S.D.C. (D. Kan.), Case No. 2:08-CV-02151-JWL-DJW |
| Level | District Court |
| Conclusion | Settlement |
| Attorney Fees | 2,200,000.00 |
| Damages | 7,000,000.00 |
| Injunction Status | N/A |