Burrell v. Staff, 60 F.4th 25 (3d Cir. February 8, 2023) (Nygaard, C.J.) Plaintiff child support debtor-civil contemnors brought several claims against Lackawanna County, the County’s Solid Waste Management Authority, Lackawanna County Recycling Center, Inc. (the private corporation to which the Authority outsources the operation of its Recycling Center, or the “Corporation”) and the Corporation’s owners (brothers Louis and Dominick DeNaples), arising out of plaintiffs’ nearly unpaid labor at the Recycling Center. The District Court dismissed all claims, and plaintiffs appealed. We will affirm dismissal of plaintiffs’ Thirteenth Amendment and Pennsylvania Wage Payment and Collection Law claims in full, and of their Trafficking Victims Protection Act (“TVPA”) and Racketeer Influenced and Corrupt Organizations Act (“RICO”) claims against the DeNaples brothers. However, we will reverse dismissal of their TVPA claims against the County, the Authority, and the Corporation; their RICO claims against the Corporation; their Fair Labor Standards Act (“FLSA”) and Pennsylvania Minimum Wage Act claims against the County, the Authority, and the Corporation; and their unjust enrichment claims against the County, the Authority, and the Corporation. The District Court thus erred by dismissing plaintiffs’ Thirteenth Amendment and TVPA claims based on their failure to allege changed circumstances and why they did not seek modification of their support orders. Restricting access to the work release program and threatening plaintiffs with serving the entirety of their otherwise legal contempt sentences is akin to the threats of deportation in Zavala v. Walmart Stores, Inc., 691 F.3d 527, 531, 541 (3d Cir. 2012). Because plaintiffs do not sufficiently allege involuntary servitude, they fail to state a Thirteenth Amendment § 1983 claim on which relief can be granted, and we will affirm the District Court’s dismissal of those claims. Congress passed the TVPA, which defines forced labor broader than Kozminski’s definition of involuntary servitude as used in the Thirteenth Amendment by criminalizing, knowingly provid[ing] or obtain[ing] the labor or services of a person by any one of, or by any combination of, the following means—
(1) by means of force, threats of force, physical restraint, or threats of physical restraint to that person or another person;
(2) by means of serious harm or threats of serious harm to that person or another person;
(3) by means of the abuse or threatened abuse of law or legal process; or
(4) by means of any scheme, plan, or pattern intended to cause the person to believe that, if that person did not perform such labor or services, that person or another person would suffer serious harm or physical restraint[.]
18 U.S.C § 1589(a). Plaintiffs’ TVPA claims against the County, the Authority, and the Corporation should not have been dismissed, but dismissal of their TVPA claims against the DeNaples brothers was appropriate. The RICO Act, 18 U.S.C. § 1962(c), states that
It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.
We agree that plaintiffs’ RICO claims against the DeNaples brothers fail, but for a different reason—because plaintiffs’ predicate TVPA claims against them fail. However, plaintiffs’ RICO claims against the Corporation survive. The Corporation contends that plaintiffs have failed to allege that the Corporation engaged in the alleged TVPA violations. But, for the same reason that plaintiffs have sufficiently alleged predicate TVPA venture liability as to the Corporation, they have sufficiently alleged predicate RICO liability as to the Corporation. The allusion to an argument that TVPA venture liability is not a predicate RICO offense has no basis in law. And the Corporation contracting for, and allegedly overseeing, plaintiffs’ labor, in order to operate the Recycling Center for its and the County/Authority’s profit, indicates that the Corporation “participated in the ‘operation or management'” of the RICO enterprise—here, the same as the TVPA venture described above—”through a pattern of racketeering activity.” See In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 372 (3d Cir. 2010). Plaintiffs contend that the Recycling Center, the County, and the Authority violated the FLSA’s minimum wage protections, 29 U.S.C. § 206(a)(1)(C), and the Pennsylvania Minimum Wage Act, 43 Pa. Stat. § 333.104(a.1), by paying plaintiffs sixty-three cents an hour to work at the Recycling Center. We will reverse, because plaintiffs have alleged sufficient plausible facts to state a claim that they are employees and that the County, its Municipal Authority, and the Corporation are their joint employers.
While the Ashurst-Sumners Act “regulates the interstate transportation of prison-made goods to avoid competition between low-cost prison labor and free labor,” Danneskjold, 82 F.3d at 42, “prison labor might implicate unfair-competition concerns when prisoners are paid below minimum wage to work for ‘a company that was not providing services to the prison and that competed with companies required to pay wages set by the FLSA.'” Gamble v. Minnesota State-Operated Servs., 32 F.4th 666, 671 (8th Cir. 2022) (quoting Danneskjold, 82 F.3d at 44). That is arguably the situation at hand. As stated above, the Corporation competed with other recycling facilities that had to hire employees and did not get the benefit of nearly free labor. The existence of the Ashurst-Sumners Act does not cause us to ignore the stark differences between work done for the prison’s benefit and outside work done at least partially to benefit a private corporation. Plaintiffs thus sufficiently allege that, while working at the Center, they were the employees of the County, the Authority, and the Corporation, acting as joint employers. Plaintiffs’ FLSA claims against the County, the Authority, and the Corporation are not barred by the statute of limitations. The Pennsylvania Wage Payment and Collection Law requires employers to pay employees their promised wages “in lawful money of the United States or check.” 43 Pa. Stat. § 260.3(a). That requirement is not waivable. Id. § 260.7. The law “does not create a right to compensation. Rather, it provides a statutory remedy when the employer breaches a contractual obligation to pay earned wages. The contract between the parties governs in determining whether specific wages are earned.” Weldon v. Kraft, Inc., 896 F.2d 793, 801 (3d Cir. 1990). Plaintiffs failed to state Pennsylvania Wage Payment and Collection Law claims. The District Court dismissed plaintiffs’ unjust enrichment claim because it was pleaded as a companion to plaintiffs’ forced labor and involuntary servitude claims, and where the unjust enrichment claim rests on the same improper conduct as the underlying tort claim, the unjust enrichment claim will rise or fall with the underlying claim. As plaintiffs plausibly allege that the County, its Municipal Authority, and the Corporation unjustly retained the yield of their labor, whether by way of a TVPA violation or a FLSA violation, plaintiffs’ unjust enrichment claims on both theories survive against those defendants. For the foregoing reasons, we will affirm dismissal of plaintiffs’ Thirteenth Amendment and Pennsylvania Wage Payment and Collection Law claims in full, and of their TVPA and RICO claims against the DeNaples brothers. We will reverse dismissal of their TVPA, FLSA, Pennsylvania Minimum Wage Act, and unjust enrichment claims against the County, the Authority, and the Corporation, and of their RICO claims against the Corporation and remand.
