News Release
April 21, 2009
Contact: Alicia Pierce
(512) 463-0103
Nichols bill to protect Texas jobs from prison labor passes in committee

Austin — Today, the Senate Criminal Justice Committee passed a bill by state Sen. Robert Nichols (R-Jacksonville) to prevent Texans from losing jobs to prison labor. Representatives from Bright Coop Inc., The Piney Woods Economic Partnership and the Lufkin Economic Development Corporation testified in support of the bill.

"It's a shame when a hard-working Texan loses their job to a weak economy, but it's simply wrong when they to lose their job to state-subsidized prison labor," said Nichols.

SB 1169 reforms the Texas' Prison Industry Enhancement Certification Program (PIE program). The current program allows private industry to partner with prisons and employ inmates. While private companies supposedly pay a prevailing wage, they benefit from the use of cheap facilities, a reduced tax burden, and not paying for employee benefits. There are currently five active PIE programs across the state.

"When it comes to the prison industry program, the current playing field is simply not level," said Nichols. "It's already resulted in job loss in East Texas."

One company that contracted for prison labor in Texas was Direct Trailer. The company paid only $1 a year to lease 70,000 square feet of factory space from the prison. Direct Trailer even advertised they could sell their products for less because of a special relationship with the state utilizing inmate labor.

Direct Trailer employed offenders in the Michael Unit at Tennessee Colony to assemble trailers for 18-wheeler trucks. Lufkin Industries, Inc., located about 85 miles from Tennessee Colony, could not compete with Direct Trailer who sold its product for thousands of dollars less. Last January, Lufkin Industries closed its trailer manufacturing division, resulting in a loss of 150 jobs.

Senate Bill 1169 and House Bill 1914 by Rep. Jim McReynolds (D-Lufkin) would help stop job loss and unfair competition by:

  • eliminating sweetheart deals and requiring businesses using prison labor to pay a fair market value for use of facilities
  • moving oversight of the program from the Prison Industry Oversight Authority to the Texas Department of Criminal Justice (TDCJ) board
  • preventing TDCJ from approving contracts resulting in job loss anywhere in Texas
  • allowing employers to submit a sworn statement that their business would be hurt and jobs could be lost by approval of a specific prison industry contract
  • requiring job and product descriptions be specific so employers can recognize a prison industry contract that would unfairly threaten their business
  • creating notification for area businesses and posting information about programs online
  • notifying the state senator and state representative in whose districts the project would be located

"By increasing accountability and transparency we can make sure the Prison Industry Enhancement program serves its purpose, to train inmates and not to take jobs from Texas workers," said Nichols.

Groups which support the bill include the AFL-CIO, Texas Association of Business, Texas Association of Manufacturers and the American Association of State, County and Municipal Employees.