November 2002

The 9th Circuit Approach to Applying Federal Labor and Employment Law to Indian Tribes 

In the 21st century most attorneys run into a question of Indian law at some point, especially in the Northwest, which includes 52 federally recognized tribes. With the advent and success of tribal enterprises, tribes have become top employers. For example, tribes in Washington employ more than 15,000 people.1 This expansion in business has spilled over to the need for more employees, with an increasing number of nontribal employees. Part of the fallout from this

success is the scrutiny of tribes as employers, as well as the pressures on tribal employers to compete for qualified employees, to justify employment policies, and to litigate employment issues.

This article discusses employment and labor laws, and the treatment by federal courts in applying these federal laws to tribal employers. The 9th Circuit Court has adopted a strong view of tribal sovereignty where a tribal government is involved.2 However, it has become clear that the 9th Circuit is unwilling to extend the notions of tribal sovereignty to tribal commercial enterprises when it comes to the application of employee and labor-related federal statutes.3 

Enacted in 1964, Title VII of the Civil Rights Act (Title VII)4 is the most common statutory basis for a lawsuit, and was the first piece of legislation broadly prohibiting discrimination in private-sector employment. Under Title VII, an employer may not discriminate against a person because of the person's race, color, religion, gender or national origin. An employer with more than 15 employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year is covered by Title VII. Indian tribes are specifically excluded from the definition of "employer[s]" who may not discriminate for the above reasons in Title VII.5 Title VII states that the term "employer" does not include "… the United States, a corporation wholly owned by the government of the United States, Indian Tribe, or any department or agency of the District of Columbia.…" 6 

The cases in this area address the definition of employer in light of the many tribal entities and organizational structures. In 1998, the 9th Circuit defined a tribal clinic as an Indian tribe in Pink v. Modoc Indian Health Project.7 An employee filed suit against the tribe's clinic seeking damages for violations of Title VII, among other things. The plaintiff's suit was grounded in both federal and state laws. State laws generally do not apply to Indian tribes.8 The clinic is a nonprofit corporation created and controlled by two tribes. The court determined that since the health clinic operated as an arm of two sovereign tribes, it could be defined as an Indian tribe.

There are also two 10th Circuit decisions on point. Wardle v. Ute Tribe9 involved a nonmember police officer who brought suit under the Indian Civil Rights Act.10 The court held that Title VII's exemption of Indian tribes controlled over more general prohibitory provisions contained in other statutes. The second case is Dille v. Council of Energy Resource Tribes,11 which held that a female employee could not bring a sex-discrimination suit under Title VII against an organization composed solely of Indian tribes. The court reasoned that it was unlikely Congress intended to protect individual Indian tribes but not the collective efforts of the tribes.

The key case involving a tribal business is Myrick v. Devils Lake Sioux Manufacturing Corp.,12 where the tribe was a majority owner of a corporation. Here, the court ruled that the corporation's attempt to be defined as an Indian tribe under Title VII was without merit. In doing so, it differentiated EEOC v. The Cherokee Nation,13 stating that the decision did not consider the "present situation of non-tribal reservation employees."14 In Cherokee Nation, the action was against the Nation itself.

In sum, the question of whether Title VII applies to Indian tribes as governments is an easy one. The more intriguing question is who fits under that definition. For now, tribal commercial enterprises will likely not be seen as Indian tribes under the definition of employer in Title VII as is apparent in Myrick. However, tribal organizations operated by tribes will likely be classified as Indian tribes as in Dille.

The Age Discrimination in Employment Act (ADEA)15 prohibits discrimination in employment on the basis of age. Employees and job applicants are protected under the ADEA if they are age 40 or over. The ADEA is silent regarding its application to Indian tribes.

In 2001, the 9th Circuit decided the ADEA's applicability to a tribal housing authority in EEOC v. Karuk Tribe Housing Authority.16 In Karuk, the Equal Employment Opportunity Commission (EEOC) tried to subpoena information related to an age-based claim from the housing authority, which refused to comply on the grounds that the ADEA did not apply to it. The court determined the housing authority was a governmental arm of the tribe, and, as such, enjoyed the tribe's sovereign status. The court employed the Tuscarora approach that: "General acts of Congress apply to Indians as well as to all others in the absence of a clear expression to the contrary," as well as the Coeur d'Alene exceptions (see p. 41). The court went on to find that the ADEA did not apply to the housing authority because the tribal member's employment relationship was with the tribe's governmental arm, and therefore it touched on "purely internal matters" related to the tribe's self-governance.

The court used the legislative history and purpose of the Native American Housing Assistance and Self Determination Act (NAHASDA) to reach its conclusion. First, it found that housing funding "should be provided in the manner that recognizes the right of Indian self-determination and tribal self-governance." Second, it concluded that the housing authority occupied a role "quintessentially related to self-governance." Third, the court stated that the intramural nature of the dispute was underscored by the fact that the tribe has an established internal process for adjudicating such matters; and finally, the court embraced a more general notion that tribal self-government encompassed a tribe's ability to make certain employment decisions without interference from other sovereigns.17 

For guidance, the court reached back seven years to the 8th Circuit case of EEOC v. Fond du Lac Heavy Equip. & Constr. Co., Inc.18 Fond du Lac affirms the general principal that when the matter involves a tribal member and the business is located on the reservation, then it is strictly an internal matter.19 As such, "subjecting such an employment relationship between the tribal member and his tribe to federal control and supervision dilutes the sovereignty of the tribe."20 The court went on to state that: "The consideration of a tribe member's age by a tribal employer should be allowed to be restricted (or not restricted) by the tribe in accordance with its culture and traditions."21 

Prior to Fond du Lac, the 10th Circuit addressed the second exception articulated in Coeur d'Alene in the case of EEOC v. Cherokee Nation.22 As discussed briefly earlier, Cherokee Nation also dealt with the ability of the EEOC to issue a subpoena on a tribe in an action against a tribal official. Relying on Donovan v. Navajo Forest Products, the court held that the ADEA was not applicable to the tribe because its enforcement would directly interfere with the Nation's treaty-protected right of self-government.23 Further, it found the ADEA's silence was equal to an ambiguity, and applied the ruling of Merrion v. Jicarilla Apache Tribe:24 

[I]f there [is] some ambiguity … the doubt would benefit the tribe for ambiguities in federal law have been construed generously in order to comport with … traditional notions of sovereignty and with the federal policy of encouraging tribal independence.25 

As with Title VII, courts have construed the ADEA to apply to tribal commercial enterprises, but they are more reluctant to cast aside organizations with some tribal government connection.

The Americans with Disabilities Act (ADA)26 was enacted in 1990. The ADA prohibits intentional discrimination in employment on the basis of a physical or mental impairment. Title III of the ADA creates a private right of action against individuals who own, lease or operate places of public accommodation, and who fail to comply with the act's accommodation requirements.27 The ADA also requires employers to provide "reasonable accommodation" to otherwise-qualified disabled employees, unless doing so would impose an undue hardship.

The 9th Circuit has not yet reached this issue, but the 11th Circuit held that Title III applies to businesses operated by an Indian tribe in the case of Florida Paraplegic Ass'n, Inc. v. Miccosukee Tribe.28 The court noted the absence of a tribal exemption in Title III, and therefore found that no exceptions were applicable to the presumption that statutes of general operation apply to Indian tribes relying on the Tuscarora approach. The court also held that the ADA did not express clear congressional intent to waive tribal sovereign immunity, and that the tribe was therefore not amenable to a private cause of action under Title III. The court went on to note that while sovereign immunity barred private suits under Title III, the U.S. attorney general could nonetheless compel the tribe's compliance with the statute.

In 1960, the U.S. Supreme Court made a landmark decision regarding what is commonly referred to as "statutes of general applicability," or federal acts that do not mention Indian tribes one way or another. The case was Federal Power Commission v. Tuscarora,29 and it involved the interpretation of a congressional act allowing the Federal Power Commission to issue a license for a power project on the Niagara River, partially owned by the Tuscarora Indian Nation. This Supreme Court decision provides the premise that "general acts of Congress apply to Indians as well as to all others in the absence of a clear expression to the contrary," or the Tuscarora approach. The Tuscarora approach has been adopted by many circuits deciding applicability issues between Indian tribes and federal acts. It has often served as the core of finding against Indian tribes.

The act, requiring interpretation, was a broad general statute and did not mention how Indian tribes would be dealt with in the case of a licensure. The Nation relied on Elk v. Wilkins,30 which held that: "General Acts of Congress did not apply to Indians, unless so expressed as to clearly manifest an intention to include them."31 However, the court disagreed, stating that it was well-settled by many decisions of the court that a general statute in terms applying to all persons includes Indians and their property interests.32 In its analysis, the court turned to an unrelated section of the act which stated "tribal lands embraced within Indian reservations," to find that Congress intended the act to apply to Indians. In his dissent, Justice Hugo Black criticizes the opinion not only as a violation of our Nation's long-established policy of recognizing and preserving Indian reservations for tribal use, but also as a breach of the Tuscarora Treaty.33 

The Occupational Safety and Health Act (OSHA)34 is a statute of general applicability designed to "assure so far as possible every working man and woman in the Nation safe and healthful working conditions and to preserve our human resources.…"35 Current OSHA regulations expressly adopt the Tuscarora approach, stating that: "It is well settled that under statutes of general applicability, such as [OSHA], Indians are treated as any other person, unless Congress expressly provided for special treatment."36 

The 9th Circuit had to decide whether to embrace the Tuscarora approach in a dispute over the application of the OSHA in the case of Donovan v. Coeur d'Alene Tribal Farm.37 In Coeur d'Alene, the Occupational Safety and Health Review Commission attempted to cite a business owned by the Coeur d'Alene Tribe for alleged violations of the act. The court looked at how the business operated, noting that it sold its products off the reservation to the open market and it employed a number of non-Indian workers. The court starts with the premise that "Indian tribes possess only a limited sovereignty that is subject to complete defeasance."38 It goes on to adopt the Tuscarora approach as the general rule while at the same time recognizing it as dictum. The court takes one step further by announcing exceptions to the Tuscarora approach. It holds that a statute of general applicability will apply to tribes unless:

(1) the law touches "exclusive rights of self-governance in purely intramural matters"; (2) the application of the law to the tribe would "abrogate rights guaranteed by Indians' treaties"; or (3) there is proof "by legislative history or some other means that Congress intended [the law] not to apply to Indians on their reservations.…" In any of these three situations, Congress must expressly apply a statute to Indians before we will hold that it reaches them.39 

The Coeur d'Alene Tribe argued that the application of OSHA regulations interfered with its right of tribal self-government. This argument was dismissed by the court, which found that acceptance of such a premise would exempt all tribal businesses. The court then narrowed the first exemption to include only "purely intramural matters such as conditions of tribal membership, inheritance rules, and domestic relations."40 The court denied the application of the second exception because the Coeur d'Alene Tribe did not make a treaty with the U.S. government.

In 1991, the 9th Circuit was faced again with the application of OSHA in Dept. of Labor v. OSHA Review Comm'n.41 Once again, the Occupational Safety and Health Review Commission was attempting to apply OSHA standards to a sawmill owned and operated by the Confederated Tribes of the Warm Springs Reservation. However, unlike the Coeur d'Alene Tribe, the Warm Springs are a treaty tribe, and the question was whether that treaty would change the analysis.

In this case, a tribal sawmill located on the reservation processed cut timber for sale in interstate commerce. Employees were both Indian and non-Indian, and sales were off the reservation. The court applied the Coeur d'Alene exceptions to determine OSHA's applicability. It found the first exception did not apply because the actions were not "purely intramural." With regard to the second exception, the court said that whether the treaty-rights exception applies depends on two questions: whether the treaty contains a general right to exclude non-Indians from the reservation, and, if so, whether such a general right of exclusion is sufficient to bar application of the act? Because it found no conflict between the tribe's right of exclusion and the entry necessary to enforce OSHA, that exception would not apply. Finally, the court did not find any legislative history to support the application of the third exception.

The most recent case involving OSHA is Reich v. Mashantucket Sand & Gravel.42  A tribally owned and operated construction business was cited and fined for OSHA violations. The court adopted the Coeur d'Alene exceptions and found that OSHA did not affect the tribe's exclusive right of self-government in purely intramural matters, and thus it applied to this tribal construction business.

In sum, similar to the antidiscrimination cases, federal courts have found that OSHA will apply to tribal businesses, regardless of where the business is located. Coeur d'Alene, Dept. of Labor and Reich each involved tribal businesses engaged in work that is inherently dangerous, so it is not surprising the courts would rule that OSHA did not apply. What is not clear is whether it would reach the same conclusion for a different type of business, organization or tribal governmental entity.

The Fair Labor Standards Act (FLSA)43 authorizes the U.S. secretary of labor to set and enforce standards for minimum wages and terms of payment for overtime work of the nonprofessional labor force, prohibits sex discrimination in compensation, and regulates the employment of children. The FLSA makes no mention of Indians, and is therefore a statute of general applicability.

There is only one case specifically addressing the FLSA, and it arose in the 7th Circuit in 1993. In the case of Reich v. Great Lakes Indian Fish and Wildlife Commission,44  the Department of Labor sought to enforce a subpoena against the Great Lakes Indian Fish and Wildlife Commission, seeking evidence the commission was violating the FLSA. In this instance, the tribal organization is a consortium of 13 tribes. The organization had employees who sometimes worked around the clock in excess of 40 hours. The court noted that if employed by state or local governments, the employees would not be covered by the FLSA.

While the Reich court notes that general federal statutes regulating employment have been applied to Indian agencies, it does not take the Tuscarora approach or apply the Coeur d'Alene exceptions. Instead, it turns to the history of the act. The court opines that during 1938, Indians were not at the forefront of the political scene and were therefore probably overlooked and not mentioned in the act. The court also finds that nothing in the legislative history suggests that Congress thought about "the possible impact of the act on Indian rights, customs, or practices."45  It then goes on to rectify what the court construes as an oversight and refuses to apply the act, partly as a symbol of comity and partly in recognition of sovereignty. However, the court is careful to narrow its holding to that of government employees who are exercising the powers of the tribal government.

The Family Medical Leave Act (FMLA)46  was passed in 1993. It requires covered employers to grant eligible employees 12 weeks of unpaid leave for family and medical reasons in a given 12-month period. The statute and its accompanying regulations are technical and complex. Though it was passed after the Tuscarora and Coeur d'Alene decisions, it does not mention Indian tribes. To date, there are no court decisions regarding its applicability to tribes. However, the secretary of labor has adopted the 9th Circuit's approach and taken the position that the FMLA applies to Indian tribes.47 The secretary stated the department's position that "these exceptions [to the Tuscarora Approach] do not apply to the FMLA, consistent with the reasoning of the 9th Circuit in Donovan v. Coeur d' Alene Farm."48 

The Employee Retirement Income Security Act (ERISA)49 is a federal statute designed to protect retirement plans and welfare-benefit plans maintained by employers. ERISA does not expressly state that it is applicable to Indian tribes, but ERISA is unique because "governmental entities" are generally exempt from ERISA, so employee-benefit plans maintained by tribal governments are likely to come with this governmental exemption.50 Tribal employers who are not governmental entities or that contain a significant number of nongovernmental employees are unlikely to come within this exemption.

A recent ERISA case, Colville Confederated Tribes v. Somday,51 reached a favorable result for the tribe. At issue in Somday was an amendment to a retirement plan approved by the Colville Tribe that reduced the rate at which employees earned a benefit under the retirement plan. The tribe argued that its retirement plan was a governmental plan and, therefore, exempt from most of ERISA's restrictions on changes to benefit accruals.52 

In its opinion, the court discussed two opinion letters by the Pension Benefit Guaranty Corporation (PBGC), a federal agency that protects benefits under defined-benefit retirement plans. One letter concluded ERISA did not apply to a plan because the plan was governmental. The second letter concluded that operating a factory was not related to tribal self-governance and, therefore, ERISA did apply to the plan.53 In addition, the court cited two earlier opinions that held ERISA applicable to Indian tribes: Lumber Industry Pension Fund v. Warm Springs Forest Product Industries,54 where the 9th Circuit held that ERISA applied to a pension plan at a tribally owned and operated sawmill, and Smart v. State Farm Insurance, where the court found ERISA applied based on the broad scope of ERISA, and rejected the argument that the application of ERISA would interfere with the tribe's right of self-governance in intramural matters.

Although not entirely settled, the federal guidance to date has found that ERISA is applicable to the employee-benefit plans maintained by Indian tribes. The cases and opinion letters indicate that if an employee-benefit plan covers solely tribal employees employed in traditional governmental roles, then the employee-benefit plan may be defined as a "governmental plan" and will be exempt from most ERISA requirements. Employee-benefit plans that cover employees in a for-profit tribal business probably will be subject to ERISA.

The National Labor Relations Act (NLRA)55 permits employees of businesses to form unions and to collectively bargain with their employers. All employers with at least $50,000 annual business volume are covered by the act. The act does not contain language either expressly applying the act to Indian tribal governments or expressly exempting such governments from the act's coverage; however, the act does expressly exempt certain governmental entities.56 

The National Labor Relations Board (NLRB), which hears disputes brought under the act, has addressed the issue of whether the act applies to Indian tribal governments and has consistently held that a tribally owned and operated enterprise located on Indian lands is exempt under the act's exemption for government entities. In Robinson v. Confederated Tribe,57 at least one court has ruled that the NLRA does not apply to tribal governments.

Currently pending before the NLRB is an unfair labor-practice charge issued by the California regional director against the San Manuel Band of Serrano Mission Indians. The charge involves a claim that the tribe selectively denied access to one labor organization but allowed access by another, thus interfering with employees' rights to freely and independently seek union representation. Many practitioners in this field are concerned that the NLRB will determine that it applies to a commercial venture of the tribe, thereby opening the door to the unionization of tribal enterprises, particularly the larger, successful tribal gaming operations.

This decision will come against the backdrop of many other NLRB decisions involving tribes, tribal businesses and tribal organizations. U.S. District Court for the District of New Mexico ruled in the case of National Labor Relations Board v. Pueblo of San Juan58 that despite the lack of reference to tribes in section 14(b) of the NLRA, which allows states and territories to prohibit agreements requiring membership in a labor organization as a condition of employment, the San Juan Pueblo Indian Tribe could enact such a prohibition. This has the effect of treating tribal governments the same as states for this purpose.

In 1961, the Court of Appeals for the District of Columbia touched on the applicability of the NLBA in the case of Navajo Tribe v. N.L.R.B.,59 when it decided that the board had jurisdiction over a privately owned plant on the Navajo Indian Reservation. Similarly, the board has applied the NLRA to a joint venture between a tribal employer and a nontribal employer on a reservation in the case of Devils Lake Sioux Manufacturing Corporation.60 Finally, in Sac & Fox Industries, Ltd.,61 the board held that the act applies to an enterprise wholly owned and operated by a tribe if the enterprise is located outside the boundaries of a reservation.

Navigating through the many federal acts that govern employment and labor issues is a complex maze for the tribal employer. Generally, tribal government employees may not be covered by these federal laws, but tribal commercial employees are. On a practical level, this means each tribe must recognize this distinction and separate its employment policies and procedures to reflect that difference. Given the present posture of the U.S. Supreme Court on any Indian issue, all tribal employers should comply with these federal acts unless there is some compelling reason not to. Otherwise, the Supreme Court will get an opportunity to further infringe on the sovereign rights of tribes and other tribal entities.

NOTES

1. See Tiller, Veronica and Robert E. Chase, Economic Contributions of Indian Tribes to the State of Washington, http://www.goia.wa.gov/econdev/index.html.

2. See EEOC v. Karuk Tribe Housing Authority, 260 F.3d 1071 (9th Cir. 2001), but see also Donovan v. Coeur d' Alene Tribal Farm, 751 F.2d 1113 (9th Cir. 1985).

3. See Colville Confederated Tribes v. Somday, 96 F.Supp.2d 1120 (E.D. Wash. 2000) and Florida Paraplegic Ass'n, Inc. v. Miccosukee Tribe, 116 F.3d 1126 (11th Cir. 1999).

4. 42 U.S.C. §§ 2000-2000e-16 (1988).

5. 42 U.S.C.§ 2000e(b)(1988).

6. 42 U.S.C. § 2000e(b)(1988).

7. 157 F.3d 1185 (9th Cir. 1998).

8. California v. Cabazon Band of Mission Indians, 480 U.S. 202, 208 (1987).

9. 623 F.2d 670 (10th Cir. 1980).

10. 25 U.S.C. §§ 1301-1303 (1988 and Supp. 1992).

11. 801 F.2d 373 (10th Cir. 1986).

12. 718 F.Supp. 753 (D.N.D. 1989).

13. 871 F.2d 937 (10th Cir. 1989).

14. 718 F.Supp. 753, 754 (1989).

15. 29 U.S.C. §§ 621-634 (1967).

16. 260 F.3d 1071 (9th Cir. 2001).

17. Citing Penobscot Nation v. Fellencer, 164 F.3d 706, 709-11 (1st Cir.), cert. denied, 527 U.S. 1022 (1999). Pink v. Modoc Indian Health Project, Inc. and Reich v. Great Lakes Indian Fish and Wildlife Commission.

18. 986 F.2d 246 (8th Cir. 1993).

19. 986 F.2d at 249.

20. Id.

21. Id.

22. 871 F.2d 937 (10th Cir. 1989).

23. 871 F.2d at 938.

24. 455 U.S. 130, 152 (1982).

25. 455 U.S. at 152.

26. 42 U.S.C. §§ 12101-13.

27. 42 U.S.C. § 12181.

28. 166 F.3d 1126 (11th Cir. 1999).

29. 362 U.S. 99 (1960).

30. 112 U.S. 94 (1884).

31. 112 U.S. 99-100.

32. 362 U.S. at 116 citing Superintendent of Five Civilized Tribes v. Commissioner, 295 U.S. 418; Blackbird v. Commissioner, 38 F.2d 976; Oklahoma Tax Comm'n. v. United States, 319 U.S. 598.

33. 362 U.S. 99, 125.

34. 29 U.S.C. 651-678 (1988).

35. 29 U.S.C. 651 (b) (1982).

36. 29 C.F.R. § 1975.4(b)(3).

37. 751 F.2d 1113 (9th Cir. 1985).

38. 751 F.2d 1113, 1115 citing Rice v. Rehner, 463 U.S. 713 (1983); and National League of Cities v. Usery, 426 U.S. 833 (1976).

39. 751 F.2d 1113, 1116 citing United States v. Farris, 624 F.2d 890, 893-894 (1980), cert. denied, 449 U.S. 1111 (1981).

40. Id. at 1116.

41. 935 F.2d 182 (9th Cir. 1991).

42. 95 F.3d 174 (2nd Cir. 1996).

43. 29 U.S.C. 201-219 (1938).

44. 4 F.3d 490 (7th Cir. 1993).

45. 4 F.3d at 493.

46. 29 U.S.C. 2601-2654 (1993).

47. See 60 Fed. Reg. 2181 (1995).

48. Id.

49. 29 U.S.C. § 1001 et. seq. (1994 & Supp. 1998).

50. 29 U.S.C. § 1002(32) defines "governmental plan" as "a plan established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing."

51. 96 F. Supp. 2d 1120 (E.D. Wash. 2000).

52. Id. at 1121; see ERISA § 4(b)(1) (exempting governmental plans from Title I of ERISA).

53. PBGC Op. Ltr. 89-9.

54. 939 F.2d 683 (9th Cir. 1991).

55. 29 U.S.C. 141-187 (1988).

56. Specifically, the NLRA states: "… employer shall not include the United States or any wholly owned Government corporation, … or any State or political subdivision thereof.…"

57. 103 LRRM (BNA) 2749 (D.Or. 1980).

58. 159 LRRM (BNA) 2975 (D.N.M. 1998).

59. 288 F.2d 162 (D.C. Cir.), cert. denied, 366 U.S. 928 (1961).

60. 243 NLRB 163 (1979).

61. 307 NLRB 241 (1992).

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