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DARP and Hendren Plastics

Mark Fochtman and others have brought class-action claims against DARP, Inc. and Hendren Plastics, Inc. relating to its practice of using unpaid workers.

Defendant DARP, Inc. claims to provide residential drug and alcohol recovery services. Plaintiffs were court-ordered to attend DARP to receive those services. Instead of receiving counseling and treatment, however, Plaintiffs were forced to perform demanding and dangerous manual labor for no pay at Hendren Plastics, Inc. Plaintiffs bring claims under the Arkansas Minimum Wage Act.Defendant DARP, Inc. claims to provide residential drug and alcohol recovery services. Plaintiffs were court-ordered to attend DARP to receive those services. Instead of receiving counseling and treatment, however, Plaintiffs were forced to perform demanding and dangerous manual labor for no pay at Hendren Plastics, Inc. 

The proposed classes include all individuals who were, are, or will be DARP participants from October 23, 2014 until the present, who worked at Hendren Plastics during their time at DARP. The plaintiffs seek unpaid back wages, liquidated damages, and attorneys' fees, costs, and expenses. 

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Case Updates

Court Grants Summary Judgment

9/30/2019

On Friday, September 27, 2019, Judge Timothy Brooks entered an Order granting in part Plaintiffs' motion for summary judgment. Judge Brooks determined that the DARP residents who worked for Hendren Plastics, Inc. were protected by the Arkansas Minimum Wage Act and were entitled to minimum wage and overtime payments. The Court made the “common-sense conclusion that business that profit from the labor of non-incarcerated drug addicts must still comply with the AMWA’s strict requirements.” (Opinion at *17). The opinion notes that Hendren Plastics and DARP used the program to obtain a competitive advantage – Hendren paid DARP less per man than its entry-level employees and significantly less than it paid for labor from other temporary staffing agencies, while avoiding expenses and administrative costs in paying DARP’s workers’ Social Security taxes, Medicare taxes, federal and state unemployment insurance, and worker’s compensation insurance. “In other words, Hendren saved money by hiring DARP residents who, in turn, displaced private-sector workers Hendren would have ordinarily paid a higher rate of pay (along with mandatory state and federal taxes and insurance withholdings).” (Opinion at *14-15).

The Court also determined that DARP’s Hendren workers were entitled to liquidated damages in an amount equal to the minimum wage and overtime payments. The Court rejected Hendren’s arguments that it acted in good faith and with a reasonable belief that its actions complied with the AMWA.

The next step is determining damages. There is no dispute about the number of hours that Plaintiffs and the class members worked at Hendren Plastics – the workers had 76,216.75 regular hours and 1,667.25 overtime hours. Under the minimum wage rate in effect at the time the work was performed, the total minimum wage and overtime is $636,317.50. Liquidated, the total would be $1,272,635.00 before any offsets or credits.

The Court has asked Plaintiffs to file a supplemental brief on whether Hendren and DARP are entitled to a $.30/hour credit against the minimum wage for providing in-kind benefits (room, board, toiletries, etc.) and also asked the parties to brief whether Defendants are entitled to a credit for any stipends it paid to participants. 

 

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