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Senator Robert Nichols: District 3
News Release
February 7, 2008
Contact: Alicia Phillips
(512) 463-0103
Nichols calls for an end to unfair private prison industry contracts
companies using prison labor should not have an unfair advantage over area industries

Austin -- Today state Senator Robert Nichols (R-Jacksonville), at a special hearing of the Private Sector Prison Industries Oversight Authority, called for an end to contracts giving prison industry partners an unfair competitive advantage over private industry businesses.

"I support giving prisoners an opportunity for training, but I want to make sure that a job for a prisoner doesn't take away a job for a hardworking Texan trying to put food on the table."

Nichols and Agriculture Commissioner Todd Staples recently sent letters to the Private Sector Prison Industries Oversight Authority asking it to terminate a contract with Direct Trailer & Equipment Company. Products from Direct Trailer directly competed with goods from an area manufacturer, Lufkin Industries.

"It is unfair to force a private employer to directly compete with the dramatically reduced overhead of private prison industries," said Nichols. "Even if a prevailing wage is paid, the cost of benefits and facility use is small or nothing compared to private businesses. We must keep the playing field level."

State and federal law prohibit private prison labor programs from operating when a labor surplus exists in the surrounding area. The Texas Workforce Commission identified a labor surplus five months before the most recent contract with Direct Trailer was signed. Late in 2007, Lufkin industries decided to close its trailer manufacturing facility and identified competition from the private prison labor program as one of the factors.

Nichols believes the private prison labor program has positive elements but must be carefully monitored to ensure no private sector jobs are lost.

Today's hearing serves as a starting point for establishing measures to prevent unfair competition in the future. The Private Sector Prison Industries Oversight Authority referred the matter of Direct Trailer's contract to the federal level for additional guidance. A second hearing is scheduled for March 13.

"I appreciate the hard work of the Texas Workforce Commission and oversight board to help resolve this issue," said Nichols.