Regulatory Updates

Union Organizing in Indian Country: The Rules Change

Scott A. Wilson
Scott A. Wilson

by Scott A. Wilson, Attorney at Law

On February 9, 2007, the United States Court of Appeals for the District of Columbia (D.C. Circuit) upheld an earlier decision of the Nation Labor Relations Board (NLRB) that held that the National Labor Relations Act (NLRA) (29 U.S.C. §151 et. seq.) applies to the casino operations of San Manuel Indian Bingo and Casino, a tribal employer. Unfortunately for Indian Country, this decision reverses 30 years of precedent to the contrary.

The Ruling in San Manuel
San Manuel Indian Bingo and Casino is operated by the San Manuel Band of Serrano Indians in San Bernardino, California, approximately 60 miles east of Los Angeles. The casino is on reservation land and is operated pursuant to the Indian Gaming Regulatory Act (IGRA) (25 U.S.C §2700 et. seq.) which authorizes gaming activity on reservation land.

The case stems from unfair labor practice charges filed with the NLRB by a labor organization known at the time as the Hotel Employees & Restaurant Employees International Union (HERE). The charges alleged that San Manuel interfered with employees' exercise of their organizing rights by
providing the Communication Workers of America (CWA), a competing labor union, access to its employees, while denying the same to HERE. San Manuel contended the NLRA did not apply to it, as a tribal government acting on its reservation. The NLRB concluded the Act applies and the case was appealed to the D.C. Circuit.

The Court's opinion answered two questions: 1) Whether applying the NLRA to San Manuel's casino violates federal Indian law by infringing on tribal sovereignty, and 2) If not, whether the term “employer” in the Act includes tribal governments engaging in commercial enterprises.

In answering the first question, the Court initially reviewed the standards used by courts to determine the applicability of federal laws to tribal governments. On one hand, the Supreme Court has held that “a general statute in terms applying to all persons includes Indians and their property interests.” Federal Power Commission v. Tuscarora Indian Nation, 362 U.S. 99 (1960). An exception to this rule arises when “(1) the law touches 'exclusive rights of self-governance in purely intramural matters'; (2) application of the law to the tribe would 'abrogate rights guaranteed by Indian treaties'; or (3) there is proof 'by legislative history or some other means that Congress intended [the law] not to apply to Indians or their reservations.…” Donovan v. Coeur d'Alene Tribal Farm, 751 F. 2d 1113 (9th Cir. 1985). On the other hand, various Supreme Court cases stand for the principles that: 1) any ambiguity in a federal statute must be resolved in favor of Indian tribes (or non-coverage), and 2) Congressional intent to include Indian governments within the scope of a federal statute must be clear before courts apply the statute to Indian governments.

The Court reconciled these principles by concluding that “a statute of general application can constrain the actions of a tribal government without at the same time impairing tribal sovereignty.” It then described a continuum of tribal sovereignty; sovereignty is strongest when the tribe acts on the reservation and affects its members only, but weakest when the tribe enters into commercial transactions with non-Indians, outside the reservation. If the law in question constrains the tribe's governmental functions, then clear Congressional intent is necessary. Accordingly, the Court ruled a law that relates to non-governmental activities and involves non-Indians does not constrain tribal sovereignty.

The essential question is whether the tribe is engaging in an act of governance or a commercial endeavor. The location of the activity is one factor to consider, but is not determinative. The Court concluded the operation of San Manuel's casino is commercial in nature and entails only minor governmental functions. The NLRA does not significantly constrain San Manuel's governmental function because the operation of the casino is a purely commercial endeavor, its patrons are primarily members of the general public, and many of the casino's employees are non-Indians. For these reasons, the Court ruled the NLRB properly asserted jurisdiction over San Manuel's operation of its casino.

The Court then considered whether Indian tribes are included in the NLRA's definition of the term, “employer.” The NLRB found that they are. The Court concluded Congress implicitly delegated the NLRB the authority to interpret the NLRA, and thereby limited its review to determining whether the NLRB's interpretation is reasonable. It found it was reasonable and thus determinative. The NLRA does not define the term “employer” except in very general terms. San Manuel argued it is exempt under the NLRA's governmental exemption, which states, “[t]he term 'employer'…shall not include …any State or political subdivision thereof….” The NLRB disagreed, and the Court deferred to the Board's interpretation of the Act.

Finally, the Court rejected San Manuel's contention that its compact with the State of California, which contains a labor relations ordinance, restricted the jurisdiction of the NLRA. The Court found there was no evidence of congressional intent to bar federal agencies from regulating employment matters in tribal gaming merely because a tribe entered into a compact that includes labor relations provisions.

In sum, the Court concluded that applying the NLRA to the San Manuel casino would not constrain tribal sovereignty. And, because the NLRB reasonably interpreted the San Manuel tribe to fall within the definition of “employer” under the NLRA, the Act was held to apply to San Manuel.

What does this mean for Indian Country employers?
As a result of the decision, San Manuel has three choices: (1) simply accept the decision; (2) request a rehearing en banc from the full D.C. Circuit (the case was reviewed by a three-judge panel); or (3) seek review by the United States Supreme Court. (By the time this article goes to publication, those
decisions probably will have been made.)

Even if the case is appealed, there is no guarantee that the D.C. Circuit's decision will be overturned. En banc hearings are not routine and few cases are accepted by the U.S. Supreme Court for review. It is impossible to predict the outcome of any appeal. The NLRB considers the opinion of the D.C. Circuit, as well as its earlier decision, to be controlling nationwide. Consequently, even pending possible appeals, the NLRB will process cases involving tribal employers. Thus, the ramifications of the case must be addressed in the immediate future.

Recommendations for tribal employers
(a) Review the decision closely as to its applicability. The NLRB's initial ruling and the Court's decision do not impose NLRA jurisdiction over strictly tribal governmental functions. Instead, the focus is on commercial operations of a tribe with particular emphasis on the employment of non-Indians.
Consequently, tribes should attempt to determine which tribally-operated entities may be subject to the NLRA.

(b) Become familiar with the NLRA. What are the rights and obligations of employees, labor organizations and employers under the Act? The statute was enacted in 1935 and the NLRB operates nationwide. Consequently, there is a considerable amount to learn about the Act and the processes of the NLRB. The thrust of the NLRA is to protect employees' right to organize and/or associate with labor organizations and to prohibit retaliation by employers for such activities. The Act enumerates procedures by which employees can seek representation while defining unlawful conduct or unfair labor practices for both labor organizations and employers. There is extensive regulatory and case authority established by the NLRB.

(c) Conduct a legal compliance audit. Determine whether the personnel policies, rules and regulations of the tribal employer comply with the NRLA. There has been considerable recent NLRB case law addressing personnel policies that are potentially violative of the Act. What are the employer's rules and practices regarding solicitation by both employees and non-employee groups? Is there a no-solicitation rule to address this type of activity? Are non-employee organizations, such as financial institutions or wireless companies, routinely allowed to enter tribal property and solicit business from employees for goods or services that are not work-related? Are employees allowed to regularly solicit other employees during work time for innocuous items such as Girl Scout cookies, NCAA basketball pools, Tupperware, etc.? An employer that allows such non-employee and employee solicitation will find it more difficult to prevent labor organizations and union-sympathetic employees from advancing their cause.

(d) Conduct a human resources audit. What are the “hot button” issues for employees? Are there topics that would cause employees to seek unionization? Are wages and benefits competitive with other businesses in the area? Are there positive relationships between employees and supervisors?

(e) Become familiar with signs of union organizing among employees. Tribal employers should be aware of the so-called “early warning signs” of union organizing.

The ruling by the D.C. Circuit in San Manuel is the most far-reaching court decision affecting Indian Country labor relations and employment in several decades. Unfortunately, as the Court noted in San Manuel, there is a trend among federal courts of appeal to apply federal labor relations and employment statutes to tribal employers. For today's tribal employer, familiarity with employment-related issues from a legal and human resources standpoint is crucial.

Scott A. Wilson represents employers in labor relations and employment law, including Indian tribes. He can be reached by calling (619) 234-9011 or email