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Settlement in Class-Action Suit Against CCA Modified After PLN Unseals Court Documents

Last October, PLN reported that Corrections Corporation of America (CCA), the nation’s largest private prison firm, had settled a class action lawsuit in U.S. District Court in Kansas that raised claims under the Fair Labor Standards Act (FLSA) on behalf of current and former CCA employees. The settlement agreement, which included a maximum payout of $7 million, was confidential until PLN filed a successful motion to intervene that unsealed the settlement and related court documents. [See: PLN, Oct. 2009, p.31].

After the class-action settlement was made public, some CCA employees who had been excluded from the agreement raised complaints. Under the original settlement, potential class members were CCA employees who worked in almost thirty specified job positions from Dec. 9, 2005 through February 12, 2009. Those job positions included correctional officer, correctional counselor, case manager, safety officer and a number of other job titles. Absent from the list was “detention officer,” a job category used by CCA primarily at immigration detention facilities, such as the Elizabeth Detention Center in New Jersey.

Current and former CCA detention officers who tried to join the class-action settlement were rejected, even though they performed the same job duties as correctional officers and had been subjected to the same FLSA violations. Other CCA employees with related job titles, including senior detention officer, detention officer part-time and detention counselor, likewise were rejected because those titles were not included in the original settlement.

On December 1, 2009, the U.S. District Court granted the parties’ joint motion to modify the settlement agreement to include the various detention officer job positions. A supplemental class notice will be mailed to all potential supplemental class members (current and former CCA detention officers), who will have sixty days to opt-in to the settlement. The Court noted that under the terms of the agreement, class members agree to release CCA from “any and all wage-related claims of any kind,” even if such violations are “presently unknown and/or un-asserted.” The Court also instructed the class members and class counsel not to “issue a press release or otherwise notify the media about the terms” of the modified settlement agreement.

The settlement payment per class member was fairly paltry, at just “$2.4345 per week of employment in a covered position,” or about $126 per year. According to court documents, more than 8,600 current and former CCA employees opted-in under the original settlement agreement, “claiming more than $2.1 million in settlement benefits.” That amount, though large, was much lower than the $7 million cap specified in the original settlement agreement.

CCA will now have to pay additional claims filed by the supplemental class members, increasing the company’s total payout under the settlement. As with the original settlement agreement, the plaintiffs’ attorneys will receive 33% of the total amount awarded to the supplemental class members, in fees and costs. See: Barnwell v. Corrections Corp. of America, U.S.D.C. (D. Kan.), Case No. 2:08-cv-02151-JWL-DJW.

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Related legal case

Barnwell v. Corrections Corp. of America

Please see the brief bank for documents related to this case.