The GEO Group Comments on Unfavorable Jury Verdict and Judgments in the U.S. District Court for the Western District of Washington
04 November 2021 - 09:00PM
Business Wire
The GEO Group (NYSE: GEO) (“GEO”) commented today on the
recent unfavorable jury verdict and combined $23.2 million
judgments in the retrial of two cases, State of Washington v. GEO
Group and Nwauzor et al. v. GEO Group (the “lawsuits”), in U.S.
District Court for the Western District of Washington. The original
trial of the lawsuits resulted in a mistrial in June 2021 as that
jury was unable to reach a unanimous verdict. GEO will address the
need for a bond for the combined judgments and will request a stay
of enforcement of the verdict and judgments while its appeal to the
U.S. Court of Appeals for the Ninth Circuit is pending.
GEO strongly disagrees with the verdict and judgments in the
retrial of the lawsuits. GEO intends to raise several issues on
appeal to the U.S. Court of Appeals for the Ninth Circuit,
including the applicability of the state of Washington’s Minimum
Wage Act to detainees who participate in the federally-mandated
Voluntary Work Program at the Northwest ICE Processing Center (the
“Center”), and the affirmative defenses that GEO believes were
wrongly dismissed in these cases. GEO looks forward to having those
and other related issues heard on appeal based on GEO’s belief that
the cases were wrongly decided. GEO intends to take all necessary
steps to vigorously defend itself.
The lawsuits were filed by the State of Washington Attorney
General and a private class of detainee plaintiffs. The plaintiffs
claimed that Washington State minimum wage laws should be enforced
with respect to detainees who volunteer to participate in a
Voluntary Work Program administered by GEO at the Center as
required by the U.S. Department of Homeland Security under the
terms of GEO’s contract. The Center houses persons in the custody
of federal immigration authorities while their immigration status
is being determined by the federal government.
In a similar lawsuit involving a Voluntary Work Program
administered by CoreCivic at an ICE Processing Center in New
Mexico, Ndambi et al. v. CoreCivic, the U.S. Court of Appeals for
the Fourth Circuit ruled in favor of CoreCivic in March 2021. In a
unanimous decision in that case, the U.S. Court of Appeals for the
Fourth Circuit affirmed a U.S. District Court ruling which
dismissed the case and found that detainees who volunteer to
participate in the Voluntary Work Program in immigration processing
centers are not employees and are not owed wages under the Fair
Labor Standards Act and New Mexico’s minimum wage law.
At this time, GEO has not recorded an accrual relating to the
lawsuits because a loss, following the appeals process, is not
considered probable.
Safe-Harbor Statement
This press release contains forward-looking statements regarding
future events and future performance of GEO that involve risks and
uncertainties that could materially affect actual results,
including statements regarding the recent unfavorable verdict and
combined $23.2 million judgments in the retrial of the lawsuits.
Risks and uncertainties that could cause actual results to vary
from current expectations and forward-looking statements contained
in this press release include, but are not limited to: (1) GEO’s
ability to successfully pursue an appeal to reverse the recent
unfavorable verdict and judgments in the retrial of the lawsuits or
GEO being required to record an accrual for the judgments in the
future; (2) GEO’s ability to defend similar other pending
litigation and the effect such other litigation may have on the
Company; (3) GEO’s ability to meet its financial guidance for 2021
given the various risks to which its business is exposed; (4) GEO’s
ability to deleverage and repay, refinance or otherwise address its
debt maturities in an amount or on the timeline it expects, or at
all; (5) changes in federal and state government policy, orders,
directives, legislation and regulations that affect public-private
partnerships with respect to secure correctional and detention
facilities, processing centers, and reentry centers, including the
timing and scope of implementation of the January 2021 Presidential
Executive Order to not renew U.S. Department of Justice contracts
with privately-operated criminal detention facilities; (6) changes
in federal immigration policy; (7) public and political opposition
to the use of public-private partnerships with respect to secure
correctional and detention facilities, processing centers and
reentry centers; (8) the magnitude, severity, and duration of the
current COVID-19 global pandemic, its impact on GEO, GEO's ability
to mitigate the risks associated with COVID-19, and the efficacy
and distribution of COVID-19 vaccines; (9) GEO’s ability to sustain
or improve company-wide occupancy rates at its facilities in light
of the COVID-19 global pandemic and policy and contract
announcements impacting GEO’s federal facilities in the United
States; (10) fluctuations in our operating results, including as a
result of contract terminations, contract renegotiations, changes
in occupancy levels and increases in our operating costs; (11)
general economic and market conditions, including changes to
governmental budgets and its impact on new contract terms, contract
renewals, renegotiations, per diem rates, fixed payment provisions,
and occupancy levels; (12) GEO’s ability to timely open facilities
as planned, profitably manage such facilities and successfully
integrate such facilities into GEO’s operations without substantial
costs; (13) GEO’s ability to win management contracts for which it
has submitted proposals and to retain existing management
contracts; (14) risks associated with GEO’s ability to control
operating costs associated with contract start-ups; (15) GEO’s
ability to successfully pursue growth and continue to create
shareholder value; (16) GEO’s ability to obtain financing or access
the capital markets in the future on acceptable terms or at all;
(17) other factors contained in GEO’s Securities and Exchange
Commission periodic filings, including its Form 10-K, 10-Q and 8-K
reports.
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version on businesswire.com: https://www.businesswire.com/news/home/20211104005351/en/
Pablo E. Paez (866) 301 4436 Executive Vice President, Corporate
Relations
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