Facts

The plaintiffs, Shearwood Fleming and Charles Ervin, California prison inmates, brought this action on behalf of
themselves and a class of inmate workers employed or formerly employed by the defendant CMT Blues, a
garment factory located at the Richard J. Donovan Correctional Facility in San Diego.
The plaintiffs alleged that the defendant failed to pay the inmates any wages during a training period which
lasted the first 30 to 60 days of employment and that this was a violation of State and Federal minimum wage
laws. The plaintiffs alleged that the wages which were paid after the completion of the unpaid training period
were paid late, and in violation of State Law. Certain of the plaintiffs also alleged that the defendant failed to
pay them overtime compensation.
The plaintiffs further alleged that pursuant to Proposition 139, a statewide prison labor initiative, and the terms
of the contract between the defendant and the State of California, wages paid to prison inmates were required
to be the same as those prevailing elsewhere. Those wages, according to the plaintiffs, were not paid.
The defendant denied all the plaintiffsÆ allegations and further denied that the inmates were entitled to assert
claims against the defendant under the terms of the contract negotiated between the State of California and the
defendant.
The plaintiffs Fleming and Ervin additionally claimed they were wrongfully terminated in retaliation for
complaining about the defendantÆs alleged violations of the California Labor Code.
The defendant denied these further allegations. The plaintiffs claimed that the defendantÆs violations of the
California Labor Code constituted unfair business practices in violation of California law. The plaintiffs sought
damages in excess of $1.4 million.
The defendant contended that inmates working within the Joint Venture Program were not covered by the
provisions of the State Labor Code, but rather were subject exclusively to the California Penal Code and
regulations promulgated by the Director of the Department of Corrections. The defendant asserted the concept
of the "unpaid training period" was specifically authorized by the Department of Corrections.
The defendant also contended that pursuant to the Department of Corrections regulations, the prevailing wage
was established by the Director of the Department of Corrections, specified by the Agreement between the
Department of Corrections and defendant, and was the sole wage that the defendant was obligated to pay
inmates.
With regard to the late pay, the defendant contended the statutes governing the area - even under the Labor
Code - did not authorize the imposition of the statutory penalty reserved for instances of non-payment of
wages. The defendant denied all allegations as to unpaid overtime.
Finally, the defendant contended that it never violated its contract with the State of California, which plaintiffs
were asserting rights as Third Party Beneficiaries.
While the Court agreed that the defendant did not breach its agreement with the State of California, it also held
that the plaintiff class of inmates was specifically entitled to the protections afforded by the California Labor
Code. On this basis, the Court found that the "unpaid training period" violated State law, and also awarded
plaintiffs what it deemed to be the prevailing wage, based on expert testimony.
The defendant was also assessed a damages penalty for incomplete record keeping.