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8th Circuit Court Ruling Favors Rehab Program

4 min read

Drug and alcohol recovery patients working for a company as part of a treatment program aren’t employees and don’t have to be paid the minimum wage, the 8th U.S. Circuit Court of Appeals in St. Louis recently ruled in an Arkansas case.

The ruling from the three-judge panel overturned a $1.6 million class-action judgment in 2020 against Hendren Plastics Inc., a plastics plant in Gravette owned by state Sen. Jim Hendren, and recovery program DARP Inc., a nonprofit in Tahlequah, Oklahoma. DARP, which stands for Drug & Alcohol Recovery Program, offers services at a 60-bed facility in Decatur (Benton County) and requires patients to work full time for the program’s duration, at least six months.

The ruling provides clarity, said William B. Putman of Fayetteville, DARP’s attorney. “The primary purpose [of being in DARP] is not to get a job. It wasn’t to have a place to live. It was to deal with addiction and stay out of prison,” he said. 

Every DARP class member had a choice: Serve prison time for drug offenses or attend a free, residential work-based drug and alcohol recovery program for six months or a year. Some participants worked about 40 hours a week or more at Hendren Plastics without getting paid. Instead, Hendren Plastics paid DARP for the work — at rates higher than minimum wage — so DARP could operate. 

About 175 DARP residents sued DARP and Hendren Plastics in 2017, claiming they were entitled to minimum wage and overtime. DARP argued that residents weren’t employees and weren’t subject to the Arkansas Minimum Wage Act.

U.S. District Judge Timothy L. Brooks of the Western District of Arkansas agreed with the class members that they were employees, spurring DARP and Hendren to appeal.

U.S. Circuit Judges James B. Loken, Steven M. Colloton and Duane Benton ruled in favor of DARP and Hendren Plastics, finding that the DARP participants weren’t employees when they toiled at the plant.

The participants got room, board and basic necessities as part of the program and had no reason to expect to be paid by Hendren, Colloton wrote. “There was no risk that DARP participants would be deprived of a minimum standard of living that safeguards their health, efficiency, and general well-being.”

The appellate court reversed Brooks’ ruling and sent the case back to the district court for further proceedings, which essentially ended the case.

Hendren was pleased, said Tim Hutchinson, a cousin and an attorney at RMP LLP of Springdale, which represented Hendren Plastic. “My client always believed that drug court participants should have an affordable way to avoid incarceration and receive rehabilitation,” Hutchinson said. “The 8th Circuit’s decision allows work programs to continue to play a role in the rehabilitation continuum. As such, many people will benefit from continued access to no-cost drug rehabilitation programs in lieu of incarceration.”

Hendren Plastics also was represented by attorneys Abtin Mehdizadegan and Missy McJunkins Duke of Cross Gunter Witherspoon & Galchus of Little Rock. 

Hendren didn’t respond to messages for comment. But on Twitter on Aug. 26 he wrote, “I’ve always believed that drug courts and rehabilitation programs are better alternatives than prison for those struggling with addictions.”

Other organizations filed friend of the court briefs in the case. Simmons Foods of Siloam Springs and its Simmons Pet Food said that it partners with a work-based recovery program, Christian Alcoholics & Addicts in Recovery of Jay, Oklahoma. “Simmons Foods and Simmons Pet Food do not participate in the CAAIR program to enrich themselves or to exploit a vulnerable source of labor,” the filing said. “They do so because the companies’ leaders genuinely believe that criminal offenders deserve a second chance, that prison is failing [them], and that the CAAIR Program works.”

An attorney for the DARP participants, Tim Steadman of the Little Rock’s Holleman & Associates, plans to ask for a rehearing before the three-judge panel and a rehearing before all the judges at the 8th Circuit. “We think there’s some facts that [the three-judge panel] overlooked or miscomprehended,” Steadman said. “But also, the issue is exceptionally important.”

Steadman said he was disappointed with the ruling. “It is not just bad for our clients, but it’s bad for workers across the state of Arkansas,” he said. “The Arkansas Minimum Wage Act should protect those who labor for profit making enterprises, like Hendren Plastics.”

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