Who is legally responsible if a Maryland prison inmate working on a private contractor's asbestos removal job gets hurt or injures someone else, and does that inmate have to be paid minimum wage?

Plain-English summary

Maryland's Secretary of Public Safety and Correctional Services asked the Attorney General about legal risks in a new Inmate Asbestos Abatement Program, under which State Use Industries (SUI, the prison system's work program) would supply inmate labor to a private contractor hired to remove asbestos from State buildings, starting with three test projects at the Maryland Penitentiary using maximum-security inmates. Under the planned structure, SUI would select, train, and pay the inmates, a correctional officer would supervise from outside the sealed work area, and the contractor would supply additional workers, safety equipment, and technical supervision. The Secretary asked four things: who bears liability if an inmate or a third party is hurt, how the federal minimum-wage law applies to the inmates, who is liable if an inmate disrupts the job, and whether there were other issues the office had not yet flagged.

On injuries to the inmate, the opinion concluded the inmate's normal route to compensation is Maryland's Sundry Claims Board, the same avenue available to any inmate hurt while working inside a facility, but flagged as a genuinely open question whether the Workers' Compensation Commission might instead (or in addition) find the inmate to be the contractor's employee and award benefits under the contractor's own workers' compensation policy, since a contract clause directing inmates to the Sundry Claims Board could not bind the Commission's own independent determination.

On injuries the inmate causes to someone else, the opinion drew a line based on intent. If an inmate's ordinary negligence during the work hurt a third party, the opinion concluded the contractor would likely be vicariously liable, because the contractor (not the State) held the "right to control" the inmate's work in the legally decisive sense, even though SUI selected and paid the inmate and a correctional officer supervised nearby. If instead an inmate committed an intentional act outside the scope of the job, such as an assault, the opinion concluded the contractor would not be vicariously liable for that, though the State could still face a separate claim for negligently selecting or supervising the inmate, brought under the Maryland Tort Claims Act. The opinion also judged that a federal civil rights or Eighth Amendment claim by an injured inmate would have little chance of success given the program's voluntary nature and planned safety measures.

On wages, the opinion reasoned that because SUI, not the contractor, would pay and effectively employ the inmates, a strong argument existed that no employer-employee relationship existed under the Fair Labor Standards Act between either the contractor and the inmates or SUI and the inmates, meaning the inmates likely would not be owed the federal minimum wage, and for similar reasons likely would not be owed wages under Maryland's Prevailing Wage Law either. On contract disruption, the opinion noted the draft contract already specified that the procurement officer would investigate any containment breach, pay the contractor for inmate-caused damage in certain circumstances, and negotiate a time extension, with a disruptive inmate expected to be discharged and disciplined.

Currency note

This opinion was issued in 1991. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Maryland's inmate labor, workers' compensation exclusivity, and Prevailing Wage Law provisions have since been recodified (several of the Article 27 and Article 41 sections cited here no longer exist under those numbers), and federal case law on the Fair Labor Standards Act's application to inmate labor has continued to develop. Verify current statutory citations and case law before relying on any specific rule described here.

Common questions

If a prison inmate got hurt while removing asbestos for a private contractor, could the inmate sue like a regular injured worker?
The opinion concluded the inmate's normal remedy would be Maryland's Sundry Claims Board, the standard channel for inmate work injuries, but noted it was an open question whether the Workers' Compensation Commission might instead find the inmate to be the contractor's employee and award compensation through the contractor's own insurance.

If an inmate's mistake injured someone outside the prison during the asbestos project, who would be on the hook?
The opinion concluded the contractor would likely be vicariously liable for an inmate's ordinary negligence, because the contractor held the legally decisive right to control how the inmate's work was performed, even though the State selected and paid the inmate and stationed a correctional officer at the site.

Would the inmates doing this asbestos work have been entitled to the minimum wage?
The opinion concluded a strong argument existed that they would not be, because State Use Industries, a state rehabilitation and job-training program, paid the inmates directly rather than the contractor, which the opinion treated as functionally similar to traditional in-facility inmate work that courts and the Department of Labor generally exclude from Fair Labor Standards Act coverage.

Background and statutory framework

Since 1988 Maryland had worked toward a plan to use inmate labor to remove asbestos from State-owned facilities, and this office had given preliminary advice on the concept in an October 1991 letter (referencing Executive Order 01.01.1987.22 on State employee asbestos exposure) before the State settled on using a private, licensed contractor rather than having SUI run the entire project itself. By the time of this opinion, an Asbestos Abatement Task Force had drafted a specific proposal calling for three fiscal-year-1992 test projects at the Maryland Penitentiary using maximum-security inmates chosen through a competitive bid process, with SUI selecting, training, and medically monitoring inmates (through a contract with the University of Maryland Hospital) and paying their wages, a correctional officer stationed outside the containment area, and the contractor supplying additional experienced labor, protective equipment, and technical supervision.

On workers' compensation, the opinion explained that an inmate injured while working inside a facility ordinarily uses the Sundry Claims Board under Article 41, §4-701(a) and COMAR 12.05.01.06.B4, while an inmate on a traditional work-release placement is covered by the employer's workers' compensation insurance under Article 27, §700A(e). Because the Program did not fit neatly into either category, and the draft contract tried to route inmate injuries to the Sundry Claims Board while relieving the contractor of workers' compensation coverage for SUI-supplied labor, the opinion concluded that arrangement likely would hold up against a claim brought directly by the State (citing Department of Public Safety v. Levan on the Sundry Claims Board as an inmate's exclusive remedy against the State, while noting Chapman v. State as a rare instance of a court letting an inmate's Tort Claims Act suit proceed anyway), but that whether the same result would follow for a claim against the contractor was genuinely unresolved, since the Workers' Compensation Commission could independently decide the inmate was the contractor's employee (citing the "dual employment" analysis in Whitehead v. Safway Steel Products and the century-old Baltimore Boot & Shoe Manufacturing Co. v. Jamar).

On third-party injuries, the opinion applied Maryland's respondeat superior and master-servant framework from Rusnack v. Giant Food and Whitehead v. Safway Steel Products (quoting Mackall v. Zayre Corp. on the "right to control" as the decisive factor), reasoning that the contractor's contractual right to direct and control the inmates' work (backed by provisions in the draft "General Conditions" and Contract Addendum 1) made the contractor, not the State, the likely employer for vicarious-liability purposes, distinguishing the correctional officer's separate security-control role. It cited Keitz v. National Paving Co. on the possibility of dual masters, Anderson Nursing Homes v. Walker and Henderson v. A.T.& T. Information Services on the scope-of-employment test, and O'Connor v. Corbett Lumber Co. on employers generally owing no duty to control off-duty or off-scope employee conduct. For direct State liability, the opinion surveyed a line of cases (Sapp v. United States, Kuhns v. Fair, and Trahan v. State, with Duhon v. Calcasieu Parish Police Jury noted as a later exception) holding that a prisoner's relationship to the government is not the kind of master-servant relationship that triggers respondeat superior, because the government cannot choose its prisoners the way an ordinary employer chooses employees, but found that a separate negligent-selection or negligent-supervision claim against the State remained available under the Maryland Tort Claims Act's waiver of sovereign immunity in §12-104(a) of the State Government Article (citing Cramer v. Housing Opportunity Commission on the elements of negligence, Vertner v. Gerber and McCloud v. Bradley on discretionary-function immunity for officials who select inmates for outside work, and Boyer v. State and James v. Prince George's County on the State's own liability surviving even when the individual official is personally immune).

On wages, the opinion worked through the Fifth Circuit's two-category framework from Watson v. Graves (in-prison private operations versus inmates released to outside contractors), noted that courts applying the "economic reality" test in cases like Carter v. Dutchess Community College generally require FLSA minimum-wage payment for inmates working directly for outside contractors, contrasted the split Ninth Circuit decision in Gilbreath v. Cutter Biological, Inc. rejecting FLSA coverage outright, and distinguished in-facility arrangements found exempt in Alexander v. SARA and Sims v. Parke Davis & Co. The opinion characterized the Program as a third, previously unaddressed pattern (SUI paying the inmates while the contractor merely directs the work) and concluded it functioned like the exempt in-house category, consistent with the FLSA's anti-unfair-competition purpose in 29 U.S.C. §202 and a Department of Labor rehabilitative-program exemption, tying the analysis to SUI's statutory mission under Article 27, §680(1)(iv) to improve inmates' employability. On the Prevailing Wage Law (Title 17, Subtitle 2 of the State Finance and Procurement Article, particularly SF §17-208 and the public-employee exclusion in SF §17-201(f)(2)), the opinion reasoned by analogy to Demory Bros. v. Board of Pub. Works that the source of the inmates' wages (SUI, not the contractor) likely meant they were not the contractor's employees for prevailing-wage purposes either.

Citations and references

Statutes:

• Article 27, §700A(e) of the Maryland Code, covering work-release inmates under an outside employer's workers' compensation policy
• Article 41, §4-701(a) of the Maryland Code, the Sundry Claims Board benefit provision for inmates injured in extra-hazardous facility work
• COMAR 12.05.01.06.B4, excluding self-inflicted or non-work injuries from Sundry Claims Board coverage
• §12-104(a) of the State Government Article, the Maryland Tort Claims Act's waiver of sovereign immunity for tort actions
• 29 U.S.C. §§201 et seq., the Fair Labor Standards Act
• 29 U.S.C. §202, the FLSA's anti-unfair-competition purpose provision
• Article 27, §680(1)(iv), State Use Industries' statutory mission to improve inmate employability
• Title 17, Subtitle 2 of the State Finance and Procurement Article, Maryland's Prevailing Wage Law
• SF §17-208, the prevailing wage determination for a construction project
• SF §17-201(f)(2), excluding public-body employees from the prevailing wage requirement
• Executive Order 01.01.1987.22, referenced in the office's earlier advice on State employee asbestos exposure

Cases:

• Faulkner v. Mayfield, 529 N.E.2d 1294 (Ohio App. 1988), and Hamilton v. Daniel International Corp., 257 S.E.2d 157 (S.C. 1979), on work-release inmates covered by an outside employer's workers' compensation
• Department of Public Safety v. Levan, 288 Md. 533, 537, 419 A.2d 1052 (1980), on the Sundry Claims Board as an inmate's exclusive remedy against the State
• Chapman v. State, No. CA 1123407 (Cir. Ct. Anne Arundel County, motion to dismiss denied March 22, 1989), a rare instance allowing a Tort Claims Act suit to proceed despite the Sundry Claims procedure
• Baltimore Boot & Shoe Manufacturing Co. v. Jamar, 93 Md. 404, 49 A. 847 (1901), an old case holding a private company using inmate labor liable for an inmate's injury
• Whitehead v. Safway Steel Products, 304 Md. 67, 497 A.2d 803 (1985), on "dual employment" and the decisive right-to-control test
• Rusnack v. Giant Food, 26 Md. App. 250, 337 A.2d 445, cert. denied, 275 Md. 755 (1975), on respondeat superior for acts within the scope of employment
• Mackall v. Zayre Corp., 293 Md. 221, 443 A.2d 98 (1982), quoted for the "right to control" as the decisive employment test
• Fisher v. City of Seattle, 384 P.2d 852 (Wash. 1963), on employee status varying by the legal purpose at issue
• Keitz v. National Paving Co., 214 Md. 479, 134 A.2d 296 (1957), on a worker having two masters at once
• Roberson v. Allied Foundery and Machinery Co., 447 So. 2d 720 (Ala. 1984), a work-release vicarious liability suit
• Anderson Nursing Homes v. Walker, 232 Md. 442, 194 A.2d 85 (1963), on the contractor's right to control the manner of work
• O'Connor v. Corbett Lumber Co., 352 S.E.2d 267 (N.C. App. 1987), on no duty to control conduct outside the scope of employment
• Henderson v. A.T.& T. Information Services, 78 Md. App. 126, 132, 552 A.2d 935 (1989), defining the scope-of-employment test
• Sapp v. United States, 227 F.2d 280 (5th Cir. 1955), Kuhns v. Fair, 22 S.E.2d 455 (Va. 1942), and Trahan v. State, 158 So. 2d 417 (La. 1963), holding a prisoner-guard relationship does not trigger respondeat superior against the government
• Duhon v. Calcasieu Parish Police Jury, 517 So. 2d 1016 (La. 1987), a later exception finding a master-servant relationship with inmates
• Cramer v. Housing Opportunity Commission, 304 Md. 705, 501 A.2d 35 (1985), on the elements of a negligence claim
• Vertner v. Gerber, 402 S.E.2d 315 (Ga. App. 1991), and McCloud v. Bradley, 724 S.W.2d 362 (Tenn. 1987), on discretionary-function immunity for officials selecting inmates for outside work
• Crawford v. Division of Parole and Community Service, 566 N.E.2d 1233 (Ohio 1991), on immunity for a furlough-program decision
• Boyer v. State, 323 Md. 558, 582-83, 594 A.2d 121 (1991), and James v. Prince George's County, 288 Md. 315, 333, 318 A.2d 1173 (1980), on the State's liability surviving an individual official's personal immunity
• Watson v. Graves, 909 F.2d 1549 (1990), the Fifth Circuit's two-category framework for inmate FLSA claims
• Carter v. Dutchess Community College, 735 F.2d 8 (2d Cir. 1984), applying the "economic reality" test to work-release inmates
• Gilbreath v. Cutter Biological, Inc., 931 F.2d 1320 (1991), the Ninth Circuit's split decision rejecting FLSA coverage for inmates
• Alexander v. SARA, 721 F.2d 149, 150 (5th Cir. 1983), and Sims v. Parke Davis & Co., 334 F. Supp. 774 (E.D. Mich.), aff'd, 453 F.2d 1259 (6th Cir. 1971), finding no FLSA employer-employee relationship for in-prison private operations
• Bonette v. California Health and Welfare Agency, 704 F.2d 1465, 1470 (9th Cir. 1983), cited within the "economic reality" test factors
• Demory Bros. v. Board of Pub. Works, 20 Md. App. 467, 316 A.2d 529, aff'd 273 Md. 320, 329 A.2d 674 (1974), on the significance of the wage source under the Prevailing Wage Law
• Bailey v. Lalley, 481 F. Supp. 203 (D. Md. 1979), on voluntariness and informed consent for inmate civil rights claims
• Fruit v. Norris, 905 F.2d 1147 (8th Cir. 1990), and Sampson v. King, 693 F.2d 566 (5th Cir. 1982), on Eighth Amendment claims for hazardous prison work conditions

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1991/Volume76_1991.pdf (this opinion appears at printed pages 117-136 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Corrections - Workers' Compensation - Torts - Employment

• Wages and Hours - Inmate Asbestos Abatement Program

                     December 4, 1991
  

The Honorable Bishop L. Robinson
Secretary of Public Safety and
Correctional Services

 You have asked for our opinion on certain liability and other issues

arising from a private contractor's use of inmate labor for the removal
of asbestos from certain State-owned facilities. Specifically, you ask the
following questions:

 1. Who would bear the cost of liability as a result of an injury to

an inmate or an injury to a third party?

2. How does the Fair Labor Standards Act apply to inmates who
   might be used in the project?

   3. Is the contractor or Division of Correction/State Use Industries
      liable for actions of inmates that inhibit completion of the contract?

   4. Are there any other related legal issues that we have not
      previously addressed?

   For the reasons set forth below we conclude as follows:

   1. In the event an inmate incurs an injury in the course of asbestos
      abatement, that inmate may seek recovery from the Sundry Claims
      Board. Whether the inmate would be entitled to coverage under the
      contractor's workers' compensation policy is an open question. Despite
      a clause in the contract directing injured inmates to the Sundry Claims
      Board, the Workers' Compensation Commission could nonetheless find
      that the inmate is an employee of the contractor and thus entitled to
      compensation from the contractor.

   Although the matter is not free from doubt, an inmate would not
   likely be considered an employee of the State for purposes of
   determining liability for injuries to third parties. Thus, if an inmate's
   negligence while performing asbestos abatement caused injury to a third
   party, the contractor would be vicariously liable for damages. If the
   injuries to the third party were the result of intentional acts by an inmate
   outside the scope of employment, the contractor would not be liable.

   Regardless of whether the inmate's actions amounted to mere
   negligence or an intentional tort, an injured third party might bring an
   action against the State for negligent selection or supervision of the
   inmate participating in the asbestos abatement program. That action
   would be filed pursuant to the Maryland Tort Claims Act.

   2. Ordinarily, inmates who work directly for the Division of
      Correction inside a facility are not entitled to the minimum wage
      prescribed under the Fair Labor Standards Act ("FLSA"). On the other
      hand, the courts that have considered the issue, as well as the
      Department of Labor, generally have concluded that inmates working
      for private contractors, whether inside or outside a facility, are protected
      by the FLSA and are thus entitled to the minimum wage. Nonetheless,
      in light of the fact that State Use Industries ("SUI"), not the contractor,
      will pay the inmate, a strong argument can be made that (i) for the
      purposes of FLSA no employer-employee relationship exists between the
      contractor and the inmate and (ii) no employer-employee relationship
      between SUI and the inmate can be established. Under this analysis, the
      inmates would not be entitled to the minimum wage. Nor would the
      inmates be entitled to wage rates determined under the Prevailing Wage
      Law.

   3. In the event that an inmate breached the asbestos containment
      area or otherwise inhibited completion of the project, the contract
      provides that the procurement officer will investigate the incident. If the
      breach is determined to be the fault of the inmate, the procurement
      officer is to pay the contractor for damages and negotiate an extension
      of the contract. Presumably, the disruptive inmate will be discharged
      from the job and, if appropriate, disciplined.

   4. We are not aware of any other legal issues that need to be
      addressed at this time. As a project of this scope develops, other issues
      might arise. Accordingly, we remain ready to render further advice as
      necessary.

                                I
      
                         Background
      

   Since 1988, the State has worked toward developing a plan by
   which inmate labor could be used to remove asbestos from certain State-
   owned facilities. In October 1990, this office was asked for advice on
   several asbestos abatement issues, including the exposure of State
   employees to asbestos, in light of Executive Order 01.01.1987.22; the
   voluntary use of inmates in such a project; and various liability issues.
   See Letter from Attorney General Curran to Secretary Robinson
   (October 5, 1991). At that time, the State had not yet determined
   whether SUI would oversee the entire project or whether a private
   contractor would be hired to use inmate labor.

   Since then, the Asbestos Abatement Task Force and a second task
   force, consisting of members from the Asbestos Oversight Committee,
   the Department of Public Safety and Correctional Services, and SUI,
   conducted extensive studies and determined that asbestos abatement
   should be conducted using private, licensed contractors. With that basic
   issue resolved, the task force prepared a draft proposal for the Inmate
   Asbestos Abatement Program (the "Program").

   Now that the Program has taken a more definitive shape, you have
   asked for further advice on certain issues. This opinion, therefore, will
   supplement the conclusions reached in our earlier letter.

   As we indicated in that letter, it is simply not possible to anticipate
   precisely all of the circumstances under which the State might incur
   legal liability for the voluntary use of inmates in the abatement program.
   This difficulty remains notwithstanding the fact that a decision to use a
   private contractor was made. Nonetheless, we have again tried to
   anticipate the foreseeable risks and to give our opinion about the likely
   exposure in each circumstance.

   As we understand it, the salient features of the Program are as
   follows:6 The Program will be implemented in fiscal year 1992 in three
   test asbestos abatement projects. All three projects are located within
   the Maryland Penitentiary and will use maximum security inmates. The
   contractor will be chosen through a competitive bid process. The
   contract will divide responsibilities for various aspects of the Program
   between the State and the contractor.

   Essentially, the State, through SUI, will furnish inmate labor to the
   contractor. SUI is to select, train, and medically monitor the inmate
   labor pool at no cost to the contractor. Inmate wages will be paid
   through SUI. Required medical monitoring of inmates will be provided
   through a contract with the University of Maryland Hospital.7

   Additionally, a correctional officer will be stationed outside of the
   containment area to supervise the inmates' behavior. The correctional
   officer will be prepared, if necessary, to enter the containment area.
   That officer will be solely responsible for controlling any disturbances
   and enforcing discipline among the inmates.

   The contractor will furnish additional, experienced laborers who
   will work side-by-side with the inmate labor.8 The contractor will be
   responsible for providing personal protective equipment and supplies that
   meet or exceed applicable legal requirements to all workers, including
   inmates. Additionally, the contractor will provide experienced
   supervision to direct the work. These supervisors will be required to
   have a working knowledge of applicable State and federal asbestos
   abatement regulations.

                                   II
   
         Liability Issues - Claims By Injured Inmates
   

A. Work-Related Injuries

 Ordinarily, an inmate who is injured while working inside a

correctional facility for that facility may seek recovery from the Sundry

    6
       These facts were compiled from our review of the task force report.

Inmate Asbestos Abatement Program (August 1, 1991), that you provided with
your opinion request.
7
In addition, inmates selected for participation in the Program will be
required to have attained at least an eighth grade education; possess at least
elementary building trade skills, if possible; express interest in participating in this
voluntary program; possess a conduct record free of infractions for at least 180
days; and successfully complete a State approved asbestos training course and
medical monitoring tests required by federal regulations.
8
Security measures may exclude individuals with criminal records from
working at a particular prison facility.

Claims Board.9 An inmate released to an employer under a State work
release program, however, is compensated for work-related injuries
through that employer's workers' compensation coverage. See Article
27, §700A(e) of the Maryland Code. See also Faulkner v. Mayfield,
529 N.E.2d 1294 (Ohio App. 1988); Hamilton v. Daniel International
Corp., 257 S.E.2d 157 (S.C. 1979).

 The structure of the Program does not easily fit the traditional

allocation of responsibility for workers' compensation. As we
understand it, the contract will require the contractor to provide general
liability insurance, with the exception of workers' compensation
coverage for SUI-supplied labor. Instead, the proposal provides, SUI
shall direct inmate injury claims to the Sundry Claims Board.
Instructions to Bidders/Asbestos Contracts, Addendum 1, at 10.
("Contract Addendum 1") In this way the State is apparently attempting
to relieve the contractor from workers' compensation liability for
inmates.

 This attempt does not resolve the issue whether an inmate is an

employee of the contractor, nor does it establish that the inmate is an
employee of the State. Indeed, the agreement between the State and
contractor cannot foreclose the possibility that an inmate could file a
claim with the Workers' Compensation Commission against either the
State or the contractor. The question is whether the Commission, when
faced with either of these types of claims, would defer to the contractual
agreement.

    9
       Article 41, §4-701(a) of the Maryland Code provides for benefits to an

inmate in a Division of Correction institution if the inmate:
(1) Is engaged in any extra-hazardous work for which
wages or a stipulated sum are paid by said institution, and (2)
sustains a permanent, partial or permanent total disability as a
result of said injury, and (3) this disability incapacitates the
prisoner or materially reduces his earning power in such work.
Injuries are excluded if they are self-inflicted or result from activities other than
work for which wages are paid. COMAR 12.05.01.06.B4.

 Even without the contractual provision, if an inmate filed a claim

against the State under the Worker's Compensation Law, in all
likelihood the State could defeat that claim by asserting that recourse to
the Sundry Claims Board is the inmate's exclusive remedy. See, e.g.,
Department of Public Safety v. Levan, 288 Md. 533, 537, 419 A.2d
1052 (1980).10

 Whether the contractor, like the State, could raise the Sundry

Claims procedure as a defense is an open question.11 Resolution of the
issue would turn on a ruling by the Commission, which, to the best of
our knowledge, has never considered it.12 Indeed, we are not aware of
any factually analogous cases - that is, cases presenting a situation in
which a private contractor supervised inmates outside of a traditional
work release program.

 In the case of an inmate claiming that he was an employee of the

contractor and thus entitled to compensation through the contractor's
insurer, the contractor undoubtedly would assert that the agreement with
the State requires recovery exclusively under the Sundry Claims
procedure. However, nothing precludes the Commission from going
behind the contractual provision and deciding that the inmate is an
employee of the contractor.

If the Commission chose not to implement the contractual allocation

of responsibility, we cannot predict how the Commission would
ultimately rule. The first step would be a determination whether the
inmate was an employee of the State or the contractor. The Commission
would apply the traditional master-servant test, as detailed in Part III

    10
        Although we believe that the Sundry Claims procedure is the inmate's

exclusive remedy for work-related injuries, we cannot rule out the possibility that
in a particular case a court might, over the State's objection, allow an inmate to
pursue another remedy. See Chapman v. State, No. CA 1123407 (Cir. Ct. Anne
Arundel County, motion to dismiss denied March 22, 1989) (allowing claim under
Maryland Tort Claims Act to proceed to trial).
11
We suggest that the private contractor selected for the Program consult
its own legal counsel to explore in greater detail possible defenses to workers'
compensation claims. We do not ordinarily attempt to provide a comprehensive
treatment of private liability issues in an opinion.
12
We are aware of one old Maryland case, Baltimore Boot & Shoe
Manufacturing Co. v. Jamar, 93 Md. 404, 49 A. 847 (1901), which held that a
private company using inmate labor was liable to the inmate for an injury sustained
while working. We note that that case was decided well before the Sundry Claims
Board was created; thus, a choice of remedies issue did not exist. In any event, that
case involved work release, and the result would be the same today.

below. Once that determination was made, the party determined to be
the inmate's employer would be responsible for workers' compensation.

 One possible outcome is a finding by the Commission of "dual

employment" by both the State and the contractor. The Court of
Appeals so found in a case involving an employment agency that
provided temporary help to various employees. In Whitehead v. Safway
Steel Products, 304 Md. 67, 497 A.2d 803 (1985), the employment
agency maintained a pool of available employees, selected them for
necessary jobs, reserved the right to fire the employees if work on the
assigned job was unsatisfactory, and billed the client for the workers'
services. The employment agency maintained workers' compensation
coverage for the employees in the labor pool. A temporary employee
was injured, recovered workers' compensation against the employment
agency, and then filed a negligence action against the temporary
employer. In denying the negligence claim, the Court found that the
worker was in a "dual employment" status, and his exclusive remedy
was workers' compensation for which both the employment agency and
the temporary employer were jointly liable.

 An argument can be made that the State is in a comparable position

to the employment agency, providing workers to the private contractor.
One obvious difference is that the State does not maintain workers'
compensation for the inmates but rather has established the Sundry
Claims procedure instead. However, some facts suggest shared or
overlapping responsibilities, potentially leading to a finding of dual
employment. For example, while SUI chooses the inmates for the
Program, the contractor has the authority to discharge the inmates.13
Also, both SUI and the contractor exercise differing degrees of control
over the inmates. In light of these facts, the Commission might find
both SUI and the contractor jointly liable for workers compensation for
the inmate.

 We emphasize that it is extremely difficult for us to predict how the

Commission would rule in this situation. This difficulty is amplified by
the fact that the workers are in the unique situation of being inmates, a
status that often defies the application of traditional legal principles.

      13
         According to the terms of the proposal, the contractor shall have the

right to request dismissal with cause of inmate workers. As part of the dismissal
process, the contractor is required to give written notice within four hours of the
incident giving rise to the dismissal and to provide certain details of the incident.
See Contract Addendum 1 at 10.

One way to resolve this issue is to amend the proposal and structure

the Program as a form of work release. Under that approach, the
contractor would be responsible for workers' compensation for the
inmates.

B. Other Claims

 We cannot entirely discount the possibility that an inmate could

assert a federal civil rights claim against the State based on his exposure
to hazardous asbestos. In all likelihood, however, this claim would not
be successful if the inmate voluntarily participated in the Program. See
Bailey v. Lalley, 481 F. Supp. 203 (D. Md. 1979) (test of voluntariness
is whether inmate gave informed consent).

  If the claim were that working with asbestos was cruel and unusual

punishment in violation of the Eighth Amendment, the inmate would not
only have to establish that he was forced to engage in hazardous work
but also that he was required to work without adequate protection or that
prison officials were deliberately indifferent to his health or safety.
Compare Fruit v. Norris, 905 F.2d 1147 (8th Cir. 1990) (prisoners who
were forced to clean portions of prison sewer without protective clothing
stated a prima facie violation of the Eighth Amendment) with Sampson
v. King, 693 F.2d 566 (5th Cir. 1982) (inmate who was provided
adequate protection failed to state constitutional violation for compelled
work with pesticides). Inasmuch as the Program involves the voluntary
use of inmate labor and presumably will comply with all applicable State
and federal safety regulations, an inmate pressing this claim would have
little chance of success.

                                III

          Liability Issues - Claims By Third Parties

A. Introduction

 Claims by third parties for injuries could arise in one of two basic

ways. First, a third party might be injured as a result of an inmate's
ordinary negligence - for example, dropping a tool that strikes a third
party while the inmate was performing asbestos abatement. Second, a
third party could assert a claim alleging an injury that resulted from the
intentional act of an inmate outside the scope of employment - for
example, an assault. Under either of these scenarios, the third party
would seek recompense against either the contractor or the State or both
under some theory of vicarious liability. More than likely, both the
contractor and the State would each assert that the inmate was employed
by the other.

 Under the theory of respondeat superior, where a master-servant

relationship is determined to exist, the master (employer) may be held
liable for the tortious acts of a servant (employee) if those acts, either
expressly or impliedly authorized, are committed within the scope of
employment. See Rusnack v. Giant Food, 26 Md. App. 250, 337 A.2d
445, cert. denied, 275 Md. 755 (1975).

 The criteria used for determining the master servant relationship

include (1) the power to select and hire the employee, (2) the payment
of wages, (3) the power to discharge, (4) the power to control the
employee's conduct, and (5) whether the work is part of the regular
business of the employer. Whitehead v. Safway Steel Products, 304 Md.
67, 497 A.2d 803 (1985). Maryland law deems the fourth factor, the
right to control, conclusive. As stated by the Court of Appeals,
"whether the employer 'has the right to control and direct the employee
in the performance of the work and in the manner in which the work is
to be done' is the 'decisive' ... test ...." Whitehead, 304 Md. at 78
(quoting Mackall v. Zayre Corp., 293 Md. 221, 443 A.2d 98 (1982)).

 Applying this test to determine whether someone is an employee of

a certain employer is a particularly fact-specific exercise. Indeed, under
the same set of facts, an employer-employee relation may or may not be
found to exist, depending on the purpose for which the determination is
desired. Thus, "a workman might be deemed an 'employee' for the
purposes of the vicarious liability of a master to a third party while,
under the same facts, he may not be an 'employee' for purposes of
workmen's compensation issues." Fisher v. City of Seattle, 384 P.2d
852 (Wash. 1963).

  Given the unique situation of an inmate worker, we caution that the

status of an inmate as an employee under any given statute or set of facts
is even less certain. Against this background we consider, for vicarious
liability purposes, whether the inmate would be considered an employee
of the independent contractor or the State.

B. Vicarious Liability of the Independent Contractor

 In our earlier letter of advice, we suggested that in the event that the

State chose to use a private contractor to supervise and conduct the
abatement project, the State's vicarious liability for an inmate's actions
would be lessened. This conclusion was based upon the belief that an
independent contractor would exercise a legally decisive degree of
control over both the inmate and the work product. We caution that
since the Program will be conducted inside the prison walls, there will
be a certain amount of "shared control" between the State and the
independent contractor. For example, SUI has the power to select and
hire the inmate and pays the inmate's wages, while the power to
discharge lies with the contractor.14 Also, both the correctional officers
guarding the job site and the contractor have certain supervisory
responsibilities, albeit of different kinds. As a result, in the event that
a third party sought to hold the contractor liable for an inmate's act, the
independent contractor would have a tenable argument that the State is
at least jointly liable. See Keitz v. National Paving Co., 214 Md. 479,
134 A.2d 296 (1957) (a person may be the servant of two masters, not
joint employers, at one time as to one act, provided that the service to
one does not involve abandonment of the service to the other).

 Undoubtedly, the fact that the contractor comes into the prison to

use inmate labor tends to make the question of who is the employer a
closer one. In traditional work release, the status of the inmates is
clearer: They are generally considered employees of the contractor. See
Article 27, §700A(e) (prisoner on work release not "deemed to be an
agent, employee or involuntary servant of the Department of Correction
while released from confinement pursuant to terms of 'work-release'
plan"). See also Roberson v. Allied Foundery and Machinery Co., 447
So. 2d 720 (Ala. 1984) (vicarious liability suit against employers of
work release inmate). Since, under the Program, the contractor will
come to the prison, it could be argued that the State retains ultimate
control and thus is the employer.

  However, in our opinion, in determining respondeat superior

liability for an employee's negligent acts committed within the scope of
employment, the conclusive element of control refers to the type that
will be exercised by the contractor. Specifically, the contractor has the
right to control and direct the inmate in the performance and manner of
doing the work.15 See Anderson Nursing Homes v. Walker, 232 Md.
442, 194 A.2d 85 (1963). The fact that a correctional officer may
"control" inmate behavior does not change this conclusion. Thus, in our
view, if an inmate's negligent act that caused injury to a third party were
determined to be within the scope of employment, the inmate likely

    14
         See note 8 above.
    15
        Section 1.03 of the "General Conditions" in the proposed contract

provides: "The contractor shall supervise and direct the work, using his best skill
and attention. He shall be solely responsible for all construction means, methods,
techniques ...." See also Contract Addendum 1 at 10. ("Contractor shall have
complete control over the project ....")

would be considered an employee or agent of the contractor. As such,
the contractor would be vicariously liable for damages.16

 An employer generally has no duty to control the actions of an

employee that are outside of the scope of employment. See O'Connor
v. Corbett Lumber Co., 352 S.E.2d 267 (N.C. App. 1987) (negligence
action against work release employer of inmate for criminal acts
committed by inmate; held, employer not liable). To be within the
scope of employment for purposes of vicarious liability, "the conduct of
the employee must be 'of a kind the actor is employed to perform, occur
during a period not unreasonably disconnected from the authorized
period of employment, in a locality not unreasonably distant from the
authorized area, and actuated at least in part by the purpose to serve the
master.'" Henderson v. A.T.& T. Information Services, 78 Md. App.
126, 132, 552 A.2d 935 (1989) (citations omitted). Accordingly, if the
injury to the third party were the result of an intentional act of the
inmate outside of the scope of employment, the contractor would not be
vicariously liable.

C. Vicarious Liability of State

 1.        Respondeat superior

 Given the unique status of an inmate, it is difficult to apply

traditional master-servant tests in assessing whether the State might be
liable under the tort law doctrine of respondeat superior.17 Indeed, a
strong argument can be made that an inmate can never be an employee
of a prison since the mutual assent necessary to the development of an
express or implied contract of employment cannot exist.

 To illustrate, even if, applying the master-servant test, an inmate

appeared to be an employee of the State, a line of cases rejects holding
the State vicariously liable for the torts of those inmates. For example,
in Sapp v. United States, 227 F.2d 280 (5th Cir. 1955), an action was
brought against a state by a third party who was injured in a collision
with a car driven by an inmate trusty. The Fifth Circuit, rejecting any
finding of vicarious liability of the state, held that the relationship of
prisoner to guard is not such as will under the common law impute the

      16
       The State might nonetheless be subject to a claim that its officials were

responsible for the negligent selection of the inmate. See Part II C 2 below.
17
Subject to certain exclusions and limitations, "the immunity of the State
and of its units is waived as to a tort action" in Maryland courts. §12-104(a) of the
State Government Article.

negligence of the prisoner to the guard. The rationale underlying this
holding was that traditionally "respondeat superior liability is based not
only on the fact that the master has the authority to supervise and
thereby control servants, but also on the fact that a master has the
ultimate right to discharge those who disobey his instructions and to hire
more tractable employees, but the government cannot choose its
prisoners and is unlikely to find among those thrust upon it, by reason
of their criminal behavior, very many of a cooperative nature." 227
F.2d at 281. See generally 60 Am. Jur. 2d, Penal and Correctional
Institutions §211 (1987). See also Kuhns v. Fair, 22 S.E.2d 455 (Va.
1942) (state not liable under respondeat superior for personal injuries of
third party resulting from collision of loaded coal truck driven by
convict).

 A similar result was reached in Trahan v. State, 158 So. 2d 417

(La. 1963) in which the court acknowledged: "If a master-servant
relationship existed between the [inmate] and the state, the state can be
held liable for negligent acts under the doctrine of respondeat superior."
158 So. 2d at 418 (emphasis added). However, the court refused to find
that a master-servant relationship existed. In reaching that conclusion,
the court wrote:

     The state does not select a prisoner to be its employee,
     nor does the prisoner voluntarily agree to work for the
     state. It is not a relationship created by mutual
     consent, but by force and operation of law as a result
     of the prisoner's conviction of a crime. Even when a
     prisoner voluntarily assumes the position of a trusty,
     as in the present case, public policy does not permit
     his being elevated to the status of an employee of the
     state ....

Id.18

 We find the reasoning in these cases persuasive. Thus, in our

opinion, an injured third party would not be successful against the State
in a tort action grounded in the theory of respondeat superior.

     18
        Later Louisiana cases have found master-servant relationships between

that state and its inmates under certain circumstances. See, e.g., Duhon v.
Calcasieu Parish Police Jury, 517 So. 2d 1016 (La. 1987).

 2.   Negligent selection

 A claim against the State alleging negligent selection of the inmates

could be asserted if the inmate's negligence within the scope of
employment, or the inmate's intentional act outside the scope of
employment, caused injury to a third party. Thus, for ordinary
negligence, it is possible that both the contractor, under the theory of
respondeat superior, and the State, under the theory of negligent
selection, would both be vicariously liable for the inmate's negligence.
As discussed above, however, an intentional tort of the inmate
committed outside the scope of employment would not be imputed to the
contractor. Thus, in that instance, the third party's only avenue of
recovery would be some theory of negligence alleged against the State.

 As with any allegation of negligence, the claimant must prove the

existence of a duty owed by the State to the claimant, a breach of that
duty, and a legally cognizable causal relationship between the breach of
duty and the harm suffered and damages. See Cramer v. Housing
Opportunity Commission, 304 Md. 705, 501 A.2d 35 (1985).

 Pertinent cases involving inmate-caused injuries generally allege

negligence of a government official in selecting a certain inmate for
certain work. For example, in Vertner v. Gerber, 402 S.E.2d 315 (Ga.
App. 1991), an air conditioning repair man was attacked and injured by
a prison inmate while the inmate was supposed to be picking up trash
along the roadside in a residential neighborhood as part of a prison work
assignment. The victim brought an action against the inmate, the
county, and various county employees. The victim contended that the
governmental defendants negligently assigned the inmate to the work
detail and negligently failed to provide an armed guard to oversee the
inmates. A similar cause of action was asserted in McCloud v. Bradley,
724 S.W.2d 362 (Tenn. 1987), in which an inmate on work release
raped the victim. In both of these cases, the courts determined that
choosing inmates for work release and deciding whether to send an
armed guard were discretionary duties and, absent willful, malicious, or
corrupt action or inaction on the part of each official, those officials
enjoyed immunity from liability for the acts or omissions that allegedly
led to the victim's injuries.19 See also Crawford v. Division of Parole

    19
       In both these cases, the inmate workers were either minimum security

or were certified as nondangerous. To the extent that the State intends to employ
maximum security inmates, the standard of care may be increased, particularly if the
inmates have known dangerous propensities. Under the theory of liability set out
in Restatement of Torts 2d §319 (1965), those who have charge or custody of
others with dangerous propensities to harm third persons have a duty to control
them and to exercise reasonable care to prevent such harm from occurring. Liability
is imposed for failure to perform such duty if the custodian knows, or should know,
that such harm is likely to ensue unless such control is exercised.

and Community Service, 566 N.E.2d 1233 (Ohio 1991) (initial decision
to allow a prisoner to participate in a furlough program encompassed by
immunity).

 In Maryland, while public officials do enjoy immunity from liability

for discretionary acts, the State has waived that immunity in the
Maryland Tort Claims Act.20 As the Court of Appeals recently noted,
"the government, when it has waived its immunity ..., is liable for torts
committed by its officers even though those officers themselves are not
liable because of public official immunity." Boyer v. State, 323 Md.
558, 582-83, 594 A.2d 121 (1991) (quoting James v. Prince George's
County, 288 Md. 315, 333, 318 A.2d 1173 (1980)). Therefore, if a
third party were able to establish all of the elements of negligence and
had complied with the requirements of the Tort Claims Act, while the
public official would not be personally liable, the State might be liable
within its waiver.21

    20
         See note 12 above.
    21
        To the extent that the State were held liable under the Tort Claims Act,

it appears that the State could recover that amount from the contractor pursuant to
the indemnification clause of the contract. See Contract General Conditions,
Section 1.03H.

                                    IV

                      Wage Rates For Inmates

A. Fair Labor Standards Act

Courts that have considered whether the Fair Labor Standards Act,

29 U.S.C. §§201 et seq., applies to inmates generally distinguish
between two factual situations.22 As explained by the Fifth Circuit in
Watson v. Graves, 909 F.2d 1549 (1990): "There are two distinctly
different 'inmate' situations that engender prisoners' claims of FLSA
coverage. The more common of the two involves outside, private, for-
profit firms conducting operations within a prison ... and typically
utilizing prisoners who have been sentenced to hard labor.... The
second, less common inmate labor situation involves inmates working
outside of the prison for and under the supervision of private
contractors." 909 F.2d at 1553. The federal Department of Labor, the
agency charged with administration of the FLSA, analyzes problems of
the FLSA's application to inmates similarly.23

    22
       Recently, the Ninth Circuit, over strong dissent, held that the FLSA

could never apply to inmates. Gilbreath v. Cutter Biological, Inc., 931 F.2d 1320
(1991). Despite this blanket statement, the Gilbreath court engaged in a
particularized factual inquiry to determine whether an employer-employee
relationship existed. This inquiry is quite at odds with the court's view of the
FLSA's scope and reflects an analytical confusion inviting skepticism about the
majority opinion. See Gilbreath, 931 F.2d at 1331 (Nelson, J. dissenting).
23
The Employment Standards Administration's Field Operations Manual,
Vol. 2 (1990 Supp.), provides as follows in §10b29:
(a) Generally, a prison inmate who, while serving a
sentence, is required to work by or who does work for the
prison, within the confines of the institution, on prison farms,
road gangs, or other areas directly associated with the
incarceration program, is not an employee within the meaning
of the Act....
(b) A different situation exists, however, where inmates
are contracted out by an institution to a private company or
individual. In such instances an employee-employer
relationship is created between the private company or
individual and the prisoners. This is true regardless of whether
the work is performed within the confines of the institution or
elsewhere.
As we understand it, the Asbestos Task Force was advised by a representative
from the Department of Labor that the agency would adhere solely to these
guidelines, regardless of any case law to the contrary.

 Like the Fifth Circuit in Watson, courts generally have held that the

FLSA does apply to inmates on work release. See, e.g., Carter v.
Dutchess Community College, 735 F.2d 8 (2d Cir. 1984) (the fact that
a worker is a prison inmate does not foreclose his being considered an
employee for purposes of the minimum wage provisions of the FLSA).
Traditionally, those cases involve the release of an inmate to the
supervision of a private contractor which controls the inmate's work and
also pays the inmate's wages. Determining whether the FLSA applies
in a work release situation involves applying an "economic reality" test,
focusing on whether an employer-employee relationship exists between
the inmate and the private contractor.24

 In the other situation, where private firms use inmate labor in

operations within a prison, courts have generally found no employer-
employee relationship to exist; thus, the FLSA is held to be
inapplicable. See Alexander v. SARA, 721 F.2d 149, 150 (5th Cir.
1983) (no employer-employee relationship, because the inmate's labor
belonged to the penitentiary, which was the sole party to the contract
with the private company); Sims v. Parke Davis & Co., 334 F. Supp.
774 (E.D. Mich.), aff'd, 453 F.2d 1259 (6th Cir. 1971) (no contractual
relationship between inmates and private contractor).

    24
        The economic reality test includes inquiries into:
            Whether the alleged employer (i) has the power to hire
       and fire the employees, (ii) supervised and controlled
       employee's schedules or conditions of employment, (iii)
       determined the rate and method of payment, and (iv)
       maintained employment records.

Carter v. Dutchess Community College, 735 F.2d 8, 12 (2d Cir. 1984) (citing
Bonette v. California Health and Welfare Agency, 704 F.2d 1465, 1470 (9th Cir.
1983)).

In our view, the Program presents a third factual pattern, distinct

from any yet considered by the courts. In the two situations set out
above, the challenges involved an inmate seeking the minimum wage
from a private contractor. Under the Program, it is SUI, not the
contractor, who pays the inmate's wages. Indeed, SUI is not even
reimbursed by the contractor for wages expended. Thus, the question
becomes whether an inmate paid by SUI, albeit under the control of a
private contractor, is entitled to the minimum wage.

 In our view, this scenario is merely an extension of the "in-house"

arrangement and thus does not give rise to a requirement that the
minimum wage be paid. One important purpose of the FLSA was the
elimination of unfair competition among employers competing for
business in the market and among workers looking for jobs. See 29
U.S.C. §202. The Program is not inconsistent with this purpose. All
potential contractors are on an equal footing, because SUI pays the
inmate's wages. To the extent that the contractor has its own
employees, those employees must be paid at least the minimum wage.
Thus, no one company is able to subvert the purposes of the FLSA by
using labor that is paid substandard wages and thereby gaining an unfair
cost advantage over its competitors.

 Moreover, SUI itself is probably exempted from FLSA coverage.

As we understand it, the Department of Labor recognizes certain
rehabilitative programs as exempt from the FLSA. One such
exemption, set out in Field Operations Handbook §10bO3(g), is for
"tasks performed by individuals committed to training schools of a
correctional nature, which are required as a part of the correctional
program of the institution as a part of the institutional discipline and by
reason of their value and providing needed therapy, rehabilitation, or
training to help prepare the inmate to become self-sustaining in a lawful
occupation after release." An avowed purpose of SUI is to provide
"meaningful work experiences for offenders intended to improve work
habits, attitudes, and skills with the objective of improving the
employability of offender upon release ...." Article 27, §680(1)(iv).
Although we have been unable to locate any authority that addresses this
exception, it seems reasonable to infer that SUI is the type of program
that the Department of Labor contemplated when crafting this exception.

B. Prevailing Wage Law

 The Prevailing Wage Law, Title 17, Subtitle 2 of the State Finance

and Procurement Article ("SF" Article), applies to State-funded
construction projects having a value of $500,000 or more. The law
requires a private contractor on the project to pay its employees at least
the wage rates established as prevailing in the county where the work is
done. The applicable wage rates are set forth in a determination issued
by the Division of Labor and Industry in the Department of Licensing
and Regulation. SF §17-208.

By the terms of the statute, employees of a public body, as distinct

from employees of a private contractor, are not entitled to be paid in
accordance with the wage determination issued for the project. SF §17-
201(f)(2). However, were the inmates deemed employees of the private
contractor, they would be entitled to be paid in accordance with the
prevailing wage schedule issued for the job.

 As far as we are aware, no case in Maryland directly addresses the

appropriate legal standard for determining whether an individual is an
employee of a private contractor, as opposed to a public body, for
purposes of the Prevailing Wage Law. Discussion in one case,
however, suggests that the source of the worker's wages would be
deemed of particular significance. See Demory Bros. v. Board of Pub.
Works, 20 Md. App. 467, 316 A.2d 529, aff'd 273 Md. 320, 329 A.2d
674 (1974). Under this view, the inmates, who will receive their wage
directly from SUI, would not be employees of the private contractor.
It is also possible that the "economic reality test" developed under the
FLSA would be deemed applicable. Under these principles, the inmates
likewise would not be viewed as employees of the private contractor.

                                V

             Liability For Actions of Inmates
          That Inhibit Completion of the Contract

 Under traditional contract law principles, a breach of contract

precludes the party guilty of the breach from recovering on the contract
and subjects the guilty party to liability for the breach. Often
contracting parties specify what the effect of a breach of a particular
contract will be, and such provisions are to be made for the Program.

 As we understand it, a physical breach in the containment system

would probably inhibit, but not preclude, completion of the project. In
any event, the consequence of such a breach is addressed in Contract
Addendum 1 at 12. In the event the containment system is breached, the
contractor is required to implement emergency plans to protect the
facility from further contamination. The procurement officer is then
directed to initiate an investigation to determine the cause of the breach.
A breach caused by an inmate is specifically addressed as follows:

     If the breach of containment was the result of an overt
     action of an inmate laborer, the procurement officer
     shall pay the contractor an equitable amount for the
     damage and negotiate appropriate time extensions,
     PROVIDED:

          (a) The breach in containment was due in whole
     or part to a defect in construction of the containment
     barrier, or

         (b) The breach in containment was not due to an
     oversight within the contractor's control.

In all likelihood, the disruptive inmate would be discharged from the
project and, if appropriate, disciplined. The same result would occur if
an inmate were to remove contraband in such a manner as to somehow
inhibit completion. The inmate would be discharged and, if necessary,
a time extension could be negotiated. In the event that several inmates
were disruptive, thereby depleting the labor pool, the State has the
option of terminating the contract or continuing the project with certain
price adjustments. See Contract Addendum 1 at 11.

 More generally, §6.14 of the contract's General Conditions provides

"that all disputes arising under or as a result of a breach of this contract
which are not disposed of by mutual agreement shall be resolved in
accordance with this clause." The clause goes on to provide for a claim
to be filed with the procurement officer, an opportunity for a hearing,
and a written decision to be issued within 180 days. Appeals of adverse
decisions are to be made to the State Board of Contract Appeals.

                                 V

                           Conclusion

 In summary, our opinion on the questions you have posed is as

follows:

 1. In the event an inmate incurs an injury in the course of asbestos

abatement, that inmate may seek recovery from the Sundry Claims
Board. Whether the inmate would be entitled to coverage under the
contractor's workers' compensation policy is an open question. Despite
a clause in the contract directing injured inmates to the Sundry Claims
Board, the Workers' Compensation Commission could nonetheless find
that the inmate is an employee of the contractor and thus entitled to
compensation from the contractor.

 Although the matter is not free from doubt, an inmate would not

likely be considered an employee of the State for purposes of
determining liability for injuries to third parties. Thus, if an inmate's
negligence while performing asbestos abatement caused injury to a third
party, the contractor would be vicariously liable for damages. If the
injuries to the third party were the result of intentional acts by an inmate
outside the scope of employment, the contractor would not be liable.

 Regardless of whether the inmate's actions amounted to mere

negligence or an intentional tort, an injured third party might bring an
action against the State for negligent selection or supervision of the
inmate participating in the asbestos abatement program. That action
would be filed pursuant to the Maryland Tort Claims Act.

2. Ordinarily, inmates who work directly for the Division of

Correction inside a facility are not entitled to the minimum wage
prescribed under the FLSA. On the other hand, the courts that have
considered the issue, as well as the Department of Labor, generally have
concluded that inmates working for private contractors, whether inside
or outside a facility, are protected by the FLSA and are thus entitled to
minimum wage. Nonetheless, in light of the fact that SUI, not the
contractor, will pay the inmate, a strong argument can be made that (i)
for the purposes of FLSA no employer-employee relationship exists
between SUI and the inmate and (ii) no employer-employee relationship
between the prison and the inmate can be established. Under this
analysis, the inmates would not be entitled to the minimum wage. Nor
would the inmates be entitled to wage rates determined under the
Prevailing Wage Law.

 3. In the event that an inmate breached the asbestos containment

area or otherwise inhibited completion of the project, the contract
provides that the procurement officer will investigate the incident. If the
breach is determined to be the fault of the inmate, the procurement
officer is to pay the contractor for damages and negotiate an extension
of the contract. Presumably, the disruptive inmate will be discharged
from the job and, if appropriate, disciplined.

4. We are not aware of any other legal issues that need to be

addressed at this time. As a project of this scope develops, other issues
might arise. Accordingly, we remain ready to render further advice as
necessary.

                                           J. Joseph Curran, Jr.
                                           Attorney General

                                           Mary O. Lunden
                                           Assistant Attorney General

Jack Schwartz
Chief Counsel
Opinions & Advice