• NLRA Act Applies to Tribal Enterprises, DC Appeals Court Rules
  • February 21, 2007 | Author: Joseph A. Turzi
  • Law Firms: DLA Piper - Washington Office ; DLA Piper - Las Vegas Office
  • On February 9, 2007, the District of Columbia Circuit Court of Appeals issued its long-awaited decision in San Manuel Indian Bingo & Casino­­­­­.  In a blow to tribal sovereignty, the court affirmed the National Labor Relations Board’s (NLRB) ruling that the National Labor Relations Act (NLRA) applied to tribal enterprises.

    In San Manuel Indian Bingo and Casino, 341 NLRB No. 138 (May 28, 2004), the National Labor Relations Board (Board) asserted jurisdiction over a tribal enterprise operating on an Indian reservation. In earlier cases, the Board had relied on a broad reading of Section 2(2) of the Act, which excepts “the United States, any Federal Reserve Bank, or any State or political subdivision” from the definition of employer. The Board historically recognized certain tribal commercial enterprises as exempt “political subdivisions” under the NLRA.

    In San Manuel, the Board held that Section 2(2)’s exemptions are to be construed narrowly. Because neither Section 2(2) nor the legislative history of the Act expressly exempts Indian tribes from the NLRA’s jurisdiction, the Board concluded that “Congress purposely chose not to exclude Indian tribes from the Act’s jurisdiction.” The Board rejected the claim that the location of an entity on a reservation changed the analysis, holding that “there is nothing in Section 2(2) to suggest that the exemption for ‘employer’ turns on where the entity is located.” San Manuel, at *5.

    The Board also considered whether federal Indian policy should lead it to decline to exercise jurisdiction. Referring to Federal Power Comm’n v. Tuscarora Indian Nation, 362 U.S. 99, 116 (1960), the Board stated that “well established” precedent provided that “statutes of ‘general application’ apply to the conduct and operations, not only of individual Indians, but also of Indian tribes.”  The Board concluded that because Congress intended the NLRA “to have the broadest possible breadth,” it was a statute of general application.


    Appeals Court Decision Raises More Questions Than It Resolves

    In its February 9, 2007 decision, the D.C. Circuit enforced the Board’s decision, agreeing with the Board that the NLRA was a statute of general application that applied to tribal commercial enterprises. However, the D.C. Circuit’s opinion raised more questions than it resolved.

    A close examination of the case demonstrates that the D.C. Circuit focused so intently on the case law that it gave little attention to the fundamental, underlying legal principles.  Nowhere is this more evident than in the court’s “sliding scale” approach to tribal sovereignty. The court explained that sovereignty is “at its strongest when explicitly established by treaty . . . or when a tribal government acts within the borders of its reservation in a matter of concern only to members of the tribe” and is at its weakest when a tribal government enters into off-reservation business transactions with non-Indians. San Manuel Indian Bingo & Casino v.  N.L.R.B., No. 05-1392A (D.C. Cir. February 9, 2007).

    This discussion of sovereignty is somewhat confusing because it seems to make a rather obvious point – that a nation’s sovereignty is strongest when governing its own territory. Presumably, that same analysis applies to any sovereign. For example, the D.C. Circuit presumably would not find it necessary to engage in such a detailed analysis to determine that the NLRA applies to the activities of the Venezuelan oil concern Citgo. Unfortunately, the court did not explain why it found this distinction important when the sovereign at issue is a tribal nation. The lack of explanation is significant because the result in the case suggests that the court adopted a definition
    of tribal sovereignty to mean something less than sovereignty.

    The court also did little to resolve the problems created by the application
    of the court’s statement in Tuscarora that federal laws of general application apply to tribes. While recognizing that this concept conflicted with cases holding that federal laws may not be applied to tribes absent a clear expression of Congressional intent, the court did not offer any basis on
    which to resolve the conflict. The court merely stated that the conflict can be reconciled “by recognizing that, in some cases at least, a statute of general application can constrain the actions of a tribal government without at the same time impairing tribal sovereignty.” Of course, such reconciliation was possible only in light of the court’s unexplained decision to redefine sovereignty as it applies to tribes.

    The D.C. Circuit also failed to effectively deal with the issues surrounding the potential conflict between the NLRA and the Indian Gaming Regulatory Act (IGRA). Interestingly, the court did not repeat the Board’s statement that IGRA “does not address labor relations,” and appeared to acknowledge that IGRA was potentially in conflict with the NLRA. 

    The court simply avoided addressing this issue by stating without explanation that “[w]e find no indication that Congress intended to limit the scope of the NLRA when it enacted IGRA, . . . .” In so doing, the court failed to resolve the conflict consistent with principles generally relied upon to accommodate seemingly inconsistent federal statutes. Bulova Watch Co. v. United States, 365 U.S. 753, 758 (1961); Furnco Glass Co. v. Transmirra Prod. Corp., 353 U.S. 222, 228-29 (1951).


    Irreconcilable Conflicts between US Labor Laws and Tribal Sovereignty

    A troubling aspect of the court’s decision is its statement that “the NLRA does not impinge on the Tribe’s sovereignty enough to indicate a need to construe the statute narrowly . . . .”  San Manuel Indian Bingo & Casino v.  N.L.R.B., No. 05-1392A (D.C. Cir. February 9, 2007). It is difficult to square that statement with the fact that where the Act applies, it preempts all state laws that attempt to regulate conduct prohibited or protected by the Act. San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 244 (1959). 

    For tribes that have adopted their own labor leg­islation or that have negotiated labor obligations in state compacts, a fundamental question raised by San Manuel is whether federal labor law supersedes any tribal labor law. In a 1954 decision applying the NLRA to a tribal organization, the Board held that the NLRA preempt­ed a tribal ordinance that prohibited compelling Indians from joining any organization in order to work on projects within the reservation boundaries. See J.R. Simplot Co., 107 NLRB 1211 (1954). The Board held that the NLRA, as a statute of the United States, preempted any ordinance passed by the tribal council. Id. at 1220. If federal labor law is applicable to tribes, the tribes may be placed between the proverbial rock and a hard place, at least in the short term.

    Recognizing the gains it has made in state compacts and tribal labor ordinances, organized labor has taken the position that the application of the NLRA does not preempt these alternative labor obligations. In such case, if tribes comply with the requirements of tribal law or compacts, such conduct may violate federal labor law. For example, the requirement under the California Tribal Labor Relations Ordinance that unions be licensed is likely to be found to be an improper restriction on employee rights under Section 8(a)(1) of the NLRA. On the other hand, a tribe attempting to exercise its rights under federal labor law may find itself charged with a violation of a tribal labor ordinance or compact.

    The application of the NLRA to tribal organizations will have far-reaching consequences for tribal sovereignty. In addition to providing for union organizing, the NLRA also contains, in Section 8(a), 29 U.S.C. § 158(a), a laundry list of activities by management that are illegal, or, in the parlance of the Act, “unfair labor practices.” Both the D.C. Circuit and the NLRB decisions in San Manuel fail to adequately address the necessary conflicts with tribal sovereignty that will result from attempts to enforce the NLRA.

    The most egregious oversight by the NLRB and the court may be the failure to recognize that the NLRA extends rights to individuals, and may in some cases do so in derogation of an employer’s rights. While it may be an acceptable role for the federal government to adjust the rights of private parties – the employer and its employees – an entirely different question arises when the employer is an on-reservation tribal entity.

    To take an extreme case, suppose that a tribal council requires all workers on tribal lands to register with the tribe and obtain some form of access card before gaining access to the lands. If a tribal council, acting completely independent of any commercial enterprise, denied access cards to union members, would such a sovereign act constitute a violation of the anti-discrimination provisions of the NLRA? Similarly, if the Board deems “on-reservation” employees to be inaccessible to the union, may it compel the tribe to grant professional union organizers access to tribal lands for the purpose of organizing?  See Lechmere, Inc. v. NLRB, 502 U.S. 527, 533-34 (1992).

    Other conflicts between the NLRA and sovereignty inevitably will arise because tribal governments are deeply involved in the operation of tribal enterprises. As a result, challenges against the actions of a tribal enterprise necessarily will require the discovery of information from the tribal governmental entities that made the decision to take such actions. In the context of collective bargaining, unions will be entitled to make broad requests for tribal documents pursuant to the extremely expansive relevance standard applied by the Board. It is inevitable that tribal governments and their officials will be served with subpoenas requesting the disclosure of information that historically has been treated as confidential.


    San Manuel May Lead to Increased Union Activity at Tribal Enterprises

    The San Manuel case is significant beyond the immediate labor law issue presented because it follows a trend of federal law being applied to the activities of tribal nations. Over the past several years, federal courts have found that various federal labor laws — including the FLSA, OSHA and ERISA — apply to such entities. Under the analysis used in these cases, virtually every federal law can be made to apply to tribes.

    Labor has identified tribal casinos as high-priority targets, and San Manuel provides labor organizations with new tools to use in their organizing efforts.  The most obvious tool is the availability of NLRB-sanctioned elections to employees of tribal casinos. However, possibly of greater significance is the ability of labor unions to use “corporate campaign” pressure tactics against tribal casinos and tribal governments. 

    The corporate campaign is a tool increasingly used by labor to force recalcitrant employers to cease opposing union organization. The essence of the corporate campaign is the application of public relations, litigation, and other types of pressure to make an employer acquiesce to union demands. 

    The application of the NLRA not only allows unions to use NLRB litigation against tribal enterprises, but also permits unions to use information requests and  NLRB subpoenas to compel tribes to disclose information that may then be used against a tribe. Also, as the number of laws applied to tribes increase, so do the number of legal strategies unions can deploy against a tribe in a corporate campaign.

    In light of the D.C. Circuit’s decision in San Manuel, labor union activity at tribal enterprises is likely to increase. Because unions will seek to capitalize on the unfair labor practice process in these labor disputes, tribes should consider changes to their policies or procedures to minimize such risk. In addition, management training in NLRA principles may be necessary to avoid inadvertent violations of the NLRA.