Ninth Circuit upholds minimum wage requirement for detained immigrant workers

(CN) — In a win for Washington state and a class of immigrant detainees employed by a for-profit jail in the state, the Ninth Circuit upheld a judgment awarding the workers and state $23.2 million for underpaying detainees who participated in a voluntary work program.

“There is nothing — either in federal law or in GEO’s contract with the federal government — that prevents GEO from paying Washington’s minimum wage to its civil detainees who perform work for the benefit of GEO,” U.S. Circuit Judge William A. Fletcher, a Bill Clinton appointee, wrote in a 35-page opinion.

Florida-based GEO Group has operated the Northwest Immigration and Customs Enforcement Processing Center in Tacoma since 2005. Civil detainees stay in the center awaiting administrative review of their immigration status. After review, the detainees are either deported or released into the United States.

GEO offered a voluntary work program at the center for detainees to perform operational duties at the facility — tasks like meal prep, janitorial work, building repairs and laundry that GEO is required to perform under its contract with ICE.

At a minimum, ICE requires detained workers to be paid at least $1 per day, though nothing precludes the company from paying higher rates and GEO sometimes paid up to $5 per day to incentivize workers to take undesirable shifts.

In 2017, both the state and a class of detainees sued the jail in federal court claiming violations of the state’s minimum wage laws. Before the lawsuit, the work program employed between 200-500 workers. A jury awarded over $17 million in back pay and damages to the detainee class and a federal judge awarded nearly $6 million in unjust enrichment to the state.

The judge also barred the jail from skirting minimum wage payments to its workers in the future, which resulted in GEO suspending the work program entirely. At the time of the lawsuit, the state’s minimum wage was $12 an hour. It has since risen to $16.66.

On appeal, a three-member panel of the Ninth Circuit certified three questions to the state Supreme Court, with the answers affirming the lower court’s ruling.

In turn, the Ninth Circuit answered three remaining questions addressing the extent of the state’s minimum wage law, with two of the three judges on the panel concluding that the lower court properly entered judgment in favor of the state and detainees.

The GEO Group, joined by the federal government, argued the state’s minimum wage law violated intergovernmental immunity — which grants federal contractors the same immunity from state laws as the federal government.

The majority rejected the argument, finding that because the group is a private, for-profit employer, the law applies equally to it as it does to other private employers. In addition, GEO is the primary operator.

“In the case before us, the [Minimum Wage Act] neither controls federal operations nor dictates the terms of the contract between ICE and GEO,” Fletcher wrote for the panel. “It requires no action by federal officials. Nor does it determine the work that detainees may perform.”

The group next argued that it should be granted immunity from discriminatory regulation, which the majority likewise rejected, finding that the exemption from coverage under the minimum wage law doesn’t apply in this scenario since the operator is private.

Fletcher, joined by Barack Obama-appointed U.S. Circuit Judge Mary H. Murguia, also determined that federal law does not preempt state law in this case, again due to GEO’s status as a private company.

“State minimum wage laws are routinely applied to federal defense contractors,” Fletcher wrote, even if the application results in a higher contract to the government.

On the issue of derivative sovereign immunity, which protects private entities contracted with the federal government as long as the actions have been specifically authorized, the court found GEO’s argument fell flat. First, the contract with ICE doesn’t forbid GEO Group from complying with Washington’s minimum wage law.

“Indeed, the plain language of the contract requires quite the opposite,” Fletcher wrote.

Under the terms of the contract, GEO is required to comply with “all applicable federal, state and local laws and standards,” which include labor laws.

Second, should the contract have omitted that requirement, there is no language hindering GEO from complying with the Minimum Wage Act.

“GEO could equally well have chosen, consistent with the contract, to exceed that amount by paying workers Washington’s minimum wage,” Fletcher wrote.

Washington Attorney General Nick Brown celebrated the court’s decision.

“For-profit businesses in Washington must all follow the same rule — if you employ workers, you must pay them fairly,” Brown said in a statement. “The appeals court today confirmed that companies that break our state laws will be held accountable.”

U.S. Circuit Judge Mark J. Bennett, a Donald Trump appointee, dissented and said the minimum age law violated the supremacy clause of the Constitution — which prohibits states from interfering with the operations of the federal government — and was preempted by federal immigration laws.

“The [Minimum Wage Act] violates the supremacy clause of the Constitution because Washington grants preferential treatment to its own detention facilities while holding the [Northwest Immigration and Customs Enforcement Processing Center] to a more onerous standard just because GEO is a federal contractor,” Bennett wrote in his 24-page dissent. “Plus, applying the [Minimum Wage Act] to GEO impermissibly frustrates Congress’ ability to effectuate its immigration policy and the [voluntary work program].”