The National Labor Relations Act and Tribal Sovereignty: An Explainer

This past year, tribal governments have asked Congress, appeals courts, and now the Supreme Court, to resolve the clash between organizing rights under the National Labor Relations Act (NLRA) and tribal sovereignty.  The National Labor Relations Board (NLRB) asserted jurisdiction over an Indian owned and operated business on tribal lands for the first time in 2004, in a bi-partisan decision involving an Indian casino.  Located in 28 states, Native American gaming brought in $28.5 billion in gross revenue in 2014 and generated 43.5 percent of gaming revenues across the country.  Under the Indian Gaming Regulatory Act (IGRA), these revenues are used to supplement the tax base on Indian Reservations and support Native American governments.  Some tribes have passed ordinances that contravene the NLRA and prevent workers, many of whom are not Native American, from exercising rights protected by the NLRA.  This explainer will examine the Sixth Circuit opinion in National Labor Relations Board v. the Little River Band of Ottawa Indians Tribal Government, the Band’s subsequent petition for a writ of certiorari, and the Tribal Labor Sovereignty Act pending in the Senate.

The Sixth Circuit ruled that the NLRB’s assertion of jurisdiction in NLRB v. Little River Band of Ottawa Indians Tribal Government was proper. 

The Band, a federally recognized Indian tribe, operates the Little River Casino Resort pursuant to the Indian Gaming Regulatory Act (IGRA).  In 2005, the Band’s tribal council enacted the Fair Employment Practices Code (FECP).  The FECP includes a number of provisions that conflict with Section 7 of the NLRA.  For example, it gives the Band the exclusive authority to determine the terms and conditions under which collective bargaining may or may not occur, prohibits collective bargaining over certain topics including the Band’s “decisions to hire, to layoff, to recall or to reorganize duties,” and bans strike activity by casino workers.  As a result, the NLRB determined that the FECP violated Section (8)(1) of the NLRA.  After the Supreme Court’s holding in NLRB v. Noel Canning, the NLRB reaffirmed its assertion of jurisdiction over the Band and reissued a cease and desist order pertaining to the application of the FECP to the Band-operated casino.

On June 9, 2015, the Sixth Circuit affirmed the NLRB’s exercise of jurisdiction.  Finding that the core issue in this case was one of Native American sovereignty, the court examined Supreme Court precedent on that question.  In Montana v. United States, the Supreme Court stated that Indian tribes’ authority to regulate non-tribal members is circumscribed and only reaches matters “necessary to protect tribal self-government or to control internal relations.”  The Sixth Circuit adopted the framework set forth in the Ninth Circuit opinion Donovan v. Coeur d’Alene Tribal Farm, recognizing that this framework balanced the nature of tribal sovereignty with the Supreme Court’s declaration in Federal Power Commission v. Tuscarora Indian Nation that federal statutes of general jurisdiction apply to Indians and their property interests.  The Coeur d’Alene framework states that a federal law should not apply if “(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 Indian treaties; or (3) there is some proof by legislative history or some other means that Congress intended [the law] not to apply to Indians on their reservations.”

The court began by finding that the NLRA was a generally applicable statute.  As there was no treaty at issue, the court turned to whether the law “touches exclusive rights of self-governance.”  The court found that neither the use of casino revenues to fund tribal governance nor the tribal council’s enactment of the ordinance rendered the application of the FECP to the casino an exclusive aspect of tribal self-governance.  Instead, the court stated that purely intramural matters are actions “the immediate ramifications of which are felt primarily within the reservation by members of the tribe.”  As a result, the Sixth Circuit determined that the NLRB was correct in exercising its jurisdiction over the Band and upheld the Board’s cease and desist order.

The Band’s petition for a writ of certiorari contends that tribal governments should not be considered “employers” under the NLRA.

The Little River Band asserts that Little River Band was wrongly decided, creating a circuit split and contravening Supreme Court precedent.  The Band claims that the NLRB cannot invalidate tribal laws governing labor relations because the Act does not cover public sector employers as a category and as such is not a generally applicable statute.  The Band draws support from the approach taken by the Tenth Circuit in NLRB v. Pueblo of San Juan.  In that case, the Tenth Circuit distinguished Tuscarora on the grounds that Tuscarora did not involve a tribal law.  Instead, the Tenth Circuit concluded that the tribe had a strong interest in this area of regulation, and “Congress did not intend by its NLRA provisions to preempt tribal sovereignty.”  Therefore, the tribal governments should not be considered “employers” under the NLRA.  The Band also pointed out that the D.C. Circuit in San Manuel Indian Bingo & Casino v. NLRB, while agreeing with the result in Little River Band, employed different reasoning, resulting in three different legal analyses in the Tenth, Sixth, and D.C. Circuits.

Finally, the Band contends that Little River Band was wrongly decided because it contravenes Supreme Court precedent by failing to adhere to the principle that in the absence of clear Congressional intent tribal sovereignty should be preserved, a proposition most recently stated in Michigan v. Bay Mills Indian Community.  The Band contends that tribal sovereignty interests are at their high point in this case as the tribe retains 1) “the power to manage the use of its territory and resources by both members and non-members” and “to undertake and regulate economic activity within the reservation,” (quoting New Mexico v. Mescalero Apache Tribe), and 2) the “power to make their own substantive law” including the power to regulate contractual relationships with nonmembers (citing Santa Clara Pueblo v. Martinez).  The Band maintains that both of these precedents are implicated, and as a result, Little River Band was wrongly decided.

In Congress, the Tribal Labor Sovereignty Act has garnered support but not enough to pass the Senate. 

Originally introduced in the 111th Congress, the Tribal Labor Sovereignty Act has gained momentum, backed by the Native American Enterprise Initiative, an initiative of the U.S. Chamber of Commerce launched in 2012.  The House passed H.R. 511, the Tribal Labor Sovereignty Act of 2015, 249 to 177 in November of this year.  The legislation excludes Indian tribes from the definition of an employer under the NLRA.  Most votes on NLRA-related legislation adhere closely to the party line, but 24 House Democrats voted for the bill. An identical companion bill was reported out of the Senate Committee on Indian Affairs by voice vote.

Democrats in Congress and the White House were put in a politically difficult position as tribal sovereignty interests were pitted against workers’ rights.  Democrats, who opposed this bill, insisted that its approach failed to harmonize the principles of tribal sovereignty and organizing rights. In this vein, the Obama Administration issued a Statement of Administration Policy, stating that if legislation were to exempt Indian tribes from the NLRB, then it must stipulate that tribes “adopt labor standards…reasonably equivalent to those in the National Labor Relations Act.”

Conclusion

While passage of the Tribal Labor Sovereignty Act seems unlikely given the stance of the Obama Administration and the dwindling number of working days in the Senate calendar, a Supreme Court decision in Little River Band would make clear whether the NLRB had the ability to assert jurisdiction over Indian casinos. In any event, judicial and Congressional advocacy on the part of Native American tribes demonstrate an energized coalition in support of tribal sovereignty.