Subminimum or Subpar? a Note in Favor of Repealing the Fair Labor Standards Act's Subminimum Wage Program

• Publication year: 2014

SEATTLE UNIVERSITY LAW REVIEWVolume 37, No. 3, SPRING 2014

Subminimum or Subpar? A Note in Favor of Repealing the Fair Labor Standards Act's Subminimum Wage Program

Melia Preedy(fn*)

"Let's tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on."

- President Barack Obama.(fn1)

"Congress acknowledged that society's accumulated myths and fears about disability and disease are as handicapping as are the physical limitations that flow from actual impairment."

- William J. Brennan, Jr.(fn2)

I. INTRODUCTION

The term "employment" implies so much more than the mere holding of a job for wage compensation. Employment can be a vehicle for fulfilling basic needs while also allowing a person to do what she most desires to accomplish. There are feelings of fulfillment and pride that can only be experienced from finishing an honest day's work. However, for too long these feelings of satisfaction from earning a living wage have been outside the reach of certain persons with disabilities. Despite the strides made in achieving civil rights(fn3) and combating the low expecta-tions of persons with disabilities in regards to physical mobility, intellec-tual ability, and educational capacity, stereotypes in the field of employ-ment continue to persist. Since 1938, Section 14(c) of the Fair Labor Standards Act (FLSA) has discriminated against people with disabilities by authorizing employers to pay less than the federal minimum wage to certain employees with disabilities.(fn4)

In 2011, Representatives Cliff Stearns (R-Fla.)(fn5) and Timothy Bishop (D-N.Y.)(fn6) proposed legislation intended to address the rights disparity and ensure workers with disabilities earn a fair wage.(fn7) That legislation, the Fair Wages for Workers with Disabilities Act of 2011 (House Resolution 3086),(fn8) was intended to phase out Section 14(c)'s productivity-based subminimum wage program; however, the proposed bill-opposed by employers of workers with disabilities(fn9)-died on the house floor dur-ing the 112th Congress.(fn10) Representative Gregg Harper (R-Ms.)(fn11) recently proposed similar legislation during the 113th Congress.(fn12) The Fair Wages for Workers with Disabilities Act of 2013 (House Resolution 831) was referred to the House Committee on Education and the Work-force, which has no currently scheduled action on the bill.(fn13)

This Note argues for the repeal of Section 14(c) of the FLSA, which continues to perpetuate a system allowing employers to pay less than minimum, or "subminimum," wage to certain employees with disabilities. The Section 14(c) program is a relic of policy leftover from the 1930s and does not help the disabled community, but rather rests on the presumption that persons with disabilities never progress. In light of recent House Resolution 3086, Congress went against the current trend of encouraging maximum independence and equal opportunities for persons with disabilities and instead upheld the subminimum wage program; however, Congress now has another opportunity to repeal Section 14(c) with House Resolution 831.

Part II of this Note examines the historical development of disabil-ity rights and the circumstances giving rise to House Resolutions 3086 and 831. Part III discusses the pros and cons of Section 14(c)'s subminimum wage program-using Washington State as a model, this Note argues for the repeal of Section 14(c) of the FLSA. Part IV suggests alternatives to the Section 14(c) program. Part V briefly concludes.(fn14)

II. HISTORICAL DEVELOPMENT OF DISABILITY RIGHTS AND WAGE LEGISLATION

Although discriminatory in its application, the Fair Labor Standards Act's Section 14(c) subminimum wage certificate program seems to have largely escaped the critical attention of disability rights activists despite its embodiment of the very stereotypical assumptions targeted by the Americans with Disabilities Act (ADA).(fn15) This may be changing, however, as activists and the disabled community come to recognize a reality articulated by Samuel Bagenstos:(fn16) "In the post-ADA world, Section 14(c) is an anomaly in the law, and it is one that should be ed."(fn17) This reality gives rise to the dire need for a systematic restructur-ing of employment opportunities for individuals with disabilities. Re-gardless of the approach chosen, one thing is certain-Section 14(c) of the FLSA must be repealed. To understand the current landscape of disa-bility rights may require some understanding of how we arrived at this point. This Part thus begins by discussing the historical development of disability rights. For the convenience of readers new to the Section 14(c) program, this Part then outlines the basic structure and tenets of Section 14(c), and the rise of sheltered workshops that are the holders of over 94% of Section 14(c) subminimum wage certificates. Lastly, this Part considers recent statutory challenges to the subminimum wage certificate program.

A. Development of Disability Rights

At the close of the nineteenth century, Washington's mission for the disabled was misguided but well-intentioned. Like most states, Washington's modest goals for the disabled community included furnish-ing bodily care, medical attention, and instruction with training in a manner of cleanliness.(fn18) During the early twentieth century, these goals fell to the wayside as the American eugenics movement gained support, focusing on the compulsory sterilization of the poor, disabled, and the "immoral" in order to "prevent degeneracy of race, pauperism, insanity and crime by permitted feebleminded to procreate their kind."(fn19) On March 22, 1909, Washington became the second state in the United States to pass a law allowing for the forced sterilization of people with disabilities and other Citizens in the name of improving society.(fn20) Such pieces of legislation were buttressed by the United States Supreme Court's 1927 decision in Buck v. Bell,(fn21) in which the Court upheld a statute permitting forced sterilization of the mentally retarded for the protection and health of the state, famously writing that "three generations of imbeciles are enough."(fn22)

During the first half of the twentieth century, institutionalization of disabled people rose in popularity;(fn23) however, during the 1960s, there was strong pushback to keep individuals with disabilities in community settings or return them home as soon as possible.(fn24) With origins in the U.S. civil rights movement, the disability rights movement focused on the right of self-determination and on an individual's ability to live inde-pendently.(fn25) Deinstitutionalization was largely popularized after the media exposed Willowbrook State School, a state-supported institution for children with intellectual disabilities in New York. Geraldo Rivera's 1972 expose brought the crowded, filthy living conditions and the ne-glect of institutionalized residents into America's living room.(fn26) This triggered a number of lawsuits against state-run institutions and, for the most part, institutionalization policies dropped in favor of integrating the developmentally disabled into the community.(fn27)

Around this same time, Congress recognized the serious and perva-sive problems of isolation and segregation of individuals with disabili-ties. To address these problems, Congress enacted civil rights laws de-signed to protect persons with disabilities from discrimination for rea-sons related to their disabilities. Thus, Section 504 of the Rehabilitation Act of 1973(fn28) (Section 504) was enacted to protect the rights of individu-als with disabilities enrolled in programs and activities (including schools) receiving federal funds. Widely recognized as the first civil rights statute for persons with disabilities, Section 504 provides, "No otherwise qualified individual with a disability in the United States . . . shall, solely by reason of her or his disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance . . . ."(fn29)

The ADA's(fn30) Title II language, as it applies to public entities, is identical.(fn31) The ADA also broadened its application to agencies and businesses, which must comply with the non-discrimination and accessi-bility provisions of the law under Title III of the ADA.(fn32) As such, the ADA affords similar protections against discrimination to Americans with disabilities(fn33) similar to the protections the Civil Rights Act of 1964 affords to African-Americans.

By providing broad protections in employment, transportation, public accommodations, telecommunications, and the public services availa-ble for people with disabilities, the passage of the ADA was a major step in correcting past wrongs experienced by people with disabilities. Landmark decisions like Olmstead v. L.C.(fn34) have been used to interpret the scope of the ADA. Hailed as the Brown v. Board of Education(fn35) of the disabled rights movement, the U.S. Supreme Court's decision in Olmstead holds that the unjustified isolation and segregation of the disabled, including persons with developmental disabilities, constitutes a form of discrimination.(fn36)

Essentially, Olmstead reaffirms the ADA's requirement that people with disabilities have a right to receive services in the most integrated setting appropriate to them.(fn37) The Court...