July 18, 1996

Andrea Brinkman
Florida Institutional
Legal Services, Inc.
1110-C N.W. 8TH Avenue
Gainesville, Florida 32601

Dear Ms. Brinkman:

The following letter is in response to your letter dated September 22, 1995, requesting an interpretation regarding the recording of occupational injuries and illnesses occurring to inmate employees in Florida on the OSHA Log of Occupational Injuries and Illnesses (OSHA No. 200). Please excuse the lengthy delay in our response. The issues raised in your letter go well beyond the OSHA recordkeeping regulation and thus we requested a legal opinion from the Department's Office of the Solicitor. I am enclosing the legal opinion written by the Atlanta Solicitor's Office (to Mr. Layne, OSHA Regional Administrator, Region IV) which was forwarded to us in response to our request. I hope you find this information useful. If you have any further questions or comments, please contact us at Area Code (202) 219-6463.

Sincerely,



Bob Whitmore
Chief
Division of Recordkeeping Requirements



 

DATE:               May 15, 1996

MEMORANDUM TO:      Mr. Davis Layne
                   RA/OSHA Atlanta, GA

FROM:               Jaylynn K. Fortney 
                   Regional Solicitor

By:                 Curtis L. Gaye 
                   Counsel

                   Channah S. Broyde 
                   Attorney

SUBJECT:            Application of the Occupational Safety
                   and Health Act to prisoners
                   SOL Case No. 95-10933

LEGAL OPINION

You requested a legal opinion from this office as to whether the Occupational Safety and Health Act applies to prisoners who perform work for PRIDE (Prison Rehabilitative Industries and Diversified Enterprises) of Florida, Inc. Following is our analysis of the critical issue -- whether PRIDE is an instrumentality of the State so as to be excluded from the definition of an employer under the Act.

The OSH Act defines an "employer" as "a person engaged in a business affecting commerce who has employees, but does not include the United States or any State or political subdivision of a State." The applicable regulations at 29 C.F.R. 1975.5(b) provide:

Tests. Any entity which has been (1) created directly by the State, so as to constitute a department or administrative arm of the government, or (2) controlled by public officials and responsible to such officials or to the general electorate, shall be deemed a "state or political subdivision thereof" under section 3(4) of the Act. . .

The regulations then list several factors to be considered in determining whether an entity meets these tests. 29 C.F.R. 1975.5(c). However, these factors are non-exhaustive and each case must be viewed on its own merits. 29 C.F.R. 1975.5(d).

PRIDE was created in 1981 by statute as a non-profit corporation in order to lease and manage the correctional work programs of Florida's Department of Corrections ("DOC" or "the Department"). Until then, the Department had managed these programs directly. The programs primarily aim to reduce prison idleness and provide inmates with skills that will enable them to be productive citizens upon their release from prison, thereby reducing recidivism. See F.S. 946.501. PRIDE leases property from the Department and sets up and manages the industries in which inmates are placed. When it was first founded, PRIDE received a one-time appropriation from the legislature and, thereafter, it has been maintained by money earned from the sale of goods produced in the prison works programs. By law, no one else can enter the business of administering the prison works programs. F.S. 946.502.

Pursuant to Florida law, sovereign immunity applies to PRIDE, "which is deemed to be a corporation primarily acting as an instrumentality of the state." F.S. 946.5026; see also Prison Rehab. Indus. v. Betterson,, 648 So.2d 778 (Flat. App. 1 Dist. 1994) (holding PRIDE was an instrumentality of the State both before and after the enactment of 946.5026). All of the members of PRIDE's Board of Directors are appointed by the governor and confirmed by the senate. F.S. 946.504. Similarly, if a director commits malfeasance or misfeasance in office, she/he is subject to removal by the governor, with senate confirmation. When PRIDE is sued, it is defended by Florida's Attorney General.

PRIDE is also subject to many statutory requirements and limitations. For example, it must submit a report to the governor and the legislature regarding its performance; it is insured by the Division of Risk Management of the Florida Department of Insurance F.S. 946.509-510; it is audited by the state's Auditor General and is subject to Florida public records laws. PRIDE is exempt from state taxes. Furthermore, the manner in which the goods produced by PRIDE are sold is restricted by statute and the relationship between PRIDE and the inmates is regulated by statute. PRIDE's non-prisoner workers are not part of the state employees system. However, under the lease between PRIDE and the Department, PRIDE's staff must comply with "[a]ll rules, regulations, directives and policy statements governing institution security safety and conduct of the Department of Corrections' employees," and "the Department may remove from the premisses PRIDE employees who do not comply with such rules." PRIDE is responsible to provide first aid for on-the-job injuries but must report all injuries to the Department's officer in charge. PRIDE is also required to comply with the Department's Environmental Health and Safety Policy and Procedures.

Federal rather than state law governs the determination of whether PRIDE is a state or political subdivision thereof. NLRB v. Natural Gas Utility District of Hawkins County, 402 U.S. 600 (1971). However, the manner in which the state regards the corporation is a factor to be considered in making this determination. 29 C.F.R. 1975.5(c). Several cases dealing with this exception have found that the entity at issue did not meet the state or political subdivision criteria. Tricil Resources Inc. v. Brock, 842 F.2d 141 (6th Cir. 1988) (private for-profit corporation that operates energy recycling facility for city is not a state or political subdivision thereof); Brock v. Chicago Zoological Society, Inc. 820 F.2d 909 (7th Cir. 1987); University of Pittsburgh, 1980 CCH OSHD 29,240 (1980).

Of those cases, probably the most similar to this case is University of Pittsburgh. In that case, the Review Commission held that the university did not qualify for the exception although it was a tax exempt institution and was declared to be a state instrumentality under state law. The Commission found significant that only a third of the university's trustees were appointed by the state and, therefore, the university was "not administered by individuals controlled by the State because only one third of the trustees are appointed by state officials." The Commission also found that although the financial involvement between the state and the university was extensive and the university did have reporting requirements to the state, there was no indication of state involvement in academic affairs beyond reporting.

In this case, by contrast, all of the members of PRIDE's board of directors are appointed by the state and are removable by the state. Also, the state has a great deal of control over PRIDE's sales and its relationship with the prisoner-workers. Furthermore, unlike the university, which existed privately before entering a relationship with the state, PRIDE did not exist until the state decided to create it and, moreover, the state will not allow anyone else to perform the function that PRIDE performs. It is also important that PRIDE, unlike the university, is performing a function traditionally performed by the government and, in fact, had been performed by the government before PRIDE was created. Thus, although there are similarities between these two cases, there are also important distinctions.

PRIDE appears to be most similar to the corporation in Popkin v. New York State Health Mental Hygiene Facilities Improvement Corp., 547 F.2d 18 (2d Cir. 1976), cert. denied, 432 U.S. 906 (1977). In that case, the Second Circuit held that the corporation was a State or political subdivision thereof.(1) That corporation, like PRIDE, was created by statute and performed a function traditionally performed by government. All of its directors were either state officials or persons appointed by the governor with the advice and consent of the senate. The directors were also removable by the governor. PRIDE shares these characteristics. See also Hawkins, supra, and cases cited in Popkin.

________
FOOTNOTE(1)  The test applied was somewhat different because the statute
involved was Title VII rather than the OSH Act.  However, the difference is
very slight and not significant.

In sum, PRIDE appears to be more similar to situations where the exception was found applicable than to those where it was not. An argument could be made to the contrary. However, in our opinion, it is more likely that a court would find PRIDE to come within the exception and, therefore, to not be an "employer" under the Act.