Labor law for supervisors: developing issues in native American employment law.

Increasing numbers of employment-related cases are involving Native Americans. Several reasons contribute to this trend. First, Native American tribes are expanding economic development on and off reservations, and these activities are generating complex legal questions with respect to employment

Also, the Equal Employment Opportunity Commission has announced its commitment to continuing efforts to address unlawful discrimination involving Native Americans, and is instituting new actions on their behalf. Finally, non-Native American companies operating on or near reservations are encountering difficult employment scenarios with potential, and actual, conflicts between federal and tribal law.

The employment law questions are especially problematical because the United States has a very complex legal history with respect to Native Americans. At one time Native American tribes were regarded as independent sovereign nations on a par with the United States. Over time, this status has eroded as a result of U.S. judicial decisions, and the tribes are considered as domestic dependent nations with limited sovereignty. The exact relationship of the tribes to the United States is ambiguous, and courts still struggle with questions involving the applicability of U.S. law to various situations involving Native Americans.

As alluded to above, a number of the legal question involve employment law. One issue is the extent to which federal employment laws apply to Native Americans in varying scenarios. To illustrate, court, decisions are inconsistent with respect to interpretation and appliheability of the National Labor Relations Act, the Employee Retirement Income Security Act, Fair Labor Standards Act, and the Americans with Disabilities Act. With respect to the Age Discrimination in Employment Act, three circuit courts currently hold that the statute does not apply to Native American tribes as employers; however, their reasoning has differed greatly.

Recently, a case was decided involving a Reconstruction era civil rights act codified at 42 U.S.C. Section 1981, in which the plaintiffs protested a decision by a lumber company to award a logging contract to a Yakama-owned business to do work on the Yakama reservation. The plaintiffs argued discrimination based on tribal membership constituted unlawful discrimination based on race, ethnicity and ancestry. The circuit court held, however, that the statute in question did not forbid national origin discrimination and that the lower court did not abuse its power in deciding not to hear arguments that were not raised at the outset of the case. CID Enterprises, Inc. v. Wallowa Forest Products, LLC, 2002 U.S. App. LEXIS 13366.

As noted earlier, the Equal Employment Opportunity Commission, responsible for administering several federal employment discrimination statues, has become increasingly active in pursuing the legal interests of Native Americans. Although Native American tribes are specifically excluded as employers subject to liability under Title VII, cases have been brought by Native Americans against other employers alleging both race and national origin discrimination.

In 2001, the EEOC settled employment discrimination charges against employers located on or near Native American reservations with beneficial results for 15,000 Native Americans. In June 2002, the EEOC's Chair emphasized the agency's long relationship with Native Americans and its commitment to eliminating workplace discrimination and furthering job prospects on and near Native American reservations.

Recently, the EEOC filed its first national origin discrimination suit under Title VII of the Civil Rights Act of 1964 involving English-only rules aimed at Native Americans. The employer in question had a rule in place that prohibited employees from speaking Navajo at work and fired Navajos who would not sign an agreement that they would follow the English-only policy.

The amount of litigation involving Native Americans is destined to increase because of the EEOC's proactive approach and because of increasing economic development and employment involving Native Americans on and off reservations. One of the most obvious of new ventures by Native Americans is the casino. However, Native Americans are also active in many other economic activities. U.S. Department of Commerce statistics indicate an 84 percent increase in the number of businesses owned by Native Americans between 1992 and 1997, and a 179 percent increase in the revenue of such businesses.

In cases involving the application of federal employment laws to Native Americans, a variety of unresolved issues have made this area of law a minefield for employers. In addition to the applicability of specific laws, mentioned previously, other problems include the following: the importance of whether or not the economic activity is controlled by tribal government, by Native American individuals and non-tribally owned Native American businesses, or by non-Native American companies; the legality of Native American and tribal preference policies that are present in federal and tribal statutes in different forms and that affect hiring decisions; the appropriate judicial forum -- federal or tribal courts-- to hear cases and the reconciliation and enforcement of conflicting decisions; and the significance of on or off reservation economic activity. Just as non-Native American companies engage in businesses on and off reservations, Native American tribes and Native American individuals engage in businesses on a nd off reservations.

A case that has been going on for 10 years, and that the Supreme Court recently refused to resolve for the second time, graphically illustrates some of the problems in this area. The lawsuit involves the unsuccessful attempts of a Hopi Native American to gain employment with a non-Native American corporation having a leasing agreement with the Navajo Nation to operate a generating station on the Navajo reservation. The Hopi Nation is adjacent to, and in fact surrounded by, the Navajo Nation. The plaintiff in the case lives in Arizona three miles from the generating station on the Navajo reservation He had applied for an operator trainee position at the generating station in 1991 and argued that, although he passed a test for the position, he was not considered for the job because he was not a Navajo Native American.

The leasing agreement between the Navajo Nation and the non-Native American corporation, the Salt River Project Agricultural Improvement and Power District, required Salt River give employment preferences in hiring to Navajos. Only if there were insufficient numbers of qualified Navajos could Salt River hire non-Navajos.

The Navajo Nation maintained it would not have entered into the lease agreement without that hiring preference provision. In exchange for the promise of jobs for Navajo people, the Navajo Nation exchanged Navajo water, coal and land with the inescapable pollution of the reservation that would result from the lease.

Not only was the tribal hiring preference contained in the lease agreement with Salt River, it is required by Navajo statutory law. The Navajo Preference in Employment Act required all employers doing business on or near the Navajo Nation to give hiring preference to Navajos and includes requirements for specific affirmative action plans and timetables. The intent is to provide employment for Navajos at all levels of employment.

The plaintiff sued Salt River under Title VII of the Civil Rights Act of 1964 and argued tribal hiring preferences constituted unlawful national origin discrimination. In the first round of this case the Ninth Circuit Court of Appeals held that the plaintiff could state a claim for such discrimination. The EEOC and the courts have emphasized the place of origin not nation of origin, is the key to jurisdiction under the statute Current, and even former, nation status is irrelevant. The plaintiff did not actually argue that Native American tribes were not nations. However, the plaintiff did contend that tribal preferences were really based on political preferences rather than national origin preferences, and thus were not covered by Title VII.

The Ninth Circuit disagreed with the plaintiff's argument and further held the Indian Preferences exemption contained in Title VII did not allow for tribal preferences. The Indian Preferences exemption allows businesses located on or near Native American reservations to have a publicly announced policy of giving preference to Native Americans living on or near the reservations.

The purpose of the exemption was to deal with the unemployment problems suffered by Native Americans. While this case was the first to deal with tribal affiliation preferences, the EEOC had earlier issued a policy statement in which it stated that tribal affiliation preferences were unlawful under Title VII. It was, and is, the EEOC's position that Congress meant to provide employment for Native Americans in general and not for particular tribes at the expense of other tribes. It pointed to regulations by other federal agencies prohibiting discrimination based on tribal affiliation as part of preference policies and argued that tribal preferences could result in unfairness when two tribes lived on the same reservation or were close by.

The appellate court agreed with the EEOC--priority could not be given to members of one Native American tribe over members of another. Tribal preferences allowable under the Indian Self Determination And Education Assistance Act were distinguished. The Ninth Circuit noted the purpose of the ISDA was to provide for meaningful self-determination and self-governance by Native Americans and to transfer federal programs affecting particular tribes to the tribes themselves, whereas the purpose of Title VII was to provide a remedy for cases of employment discrimination. Furthermore, other federal regulations specifically disallowed tribal preferences. Dawavendewa v. Salt River Project Agricultural Improvement and Power District (Dawavendewa I), 154 F.3d 1117 (9th Cir. 1998). The Supreme Court declined to hear an appeal.

The Ninth Circuit again was confronted with the case when the district court dismissed it because the Navajo Nation was indispensable to the action but not a part of the lawsuit. The appellate court reviewed whether the absent Navajo Nation was necessary to the lawsuit, whether it could be forced to join the lawsuit, and, if it could not be joined, whether it was indispensable to the resolution of the issues so that, in fairness, the case should be dismissed. The Ninth Circuit decided the Navajo Nation was indeed necessary, it could not be joined, and it was so vital to the lawsuit that in good conscience the case should be dismissed. The Ninth Circuit noted the plaintiff wanted a court order issued that would allow him employment at Salt River and keep the corporation from following the Navajo preference policy. However, only Salt River and the plaintiff would be controlled by such an order. The Navajo Nation could still try to enforce the lease provisions in the Navajo National judicial system and perhaps e ven try to end Salt River's leasing rights. If Salt River followed the court order desired by the plaintiff, and the Navajo Nation ended the lease agreement, the plaintiff and others like him still would not have jobs. If Salt River refused to follow the court's order, the plaintiff and others like him still would not have employment. Whatever Salt River did, the plaintiff still might not have the desired job. Furthermore, Salt River would be caught in a no-win situation of either complying with the court's requirements or complying with the lease's requirements. The Navajo Nation stressed it would continue to enforce the hiring preference policy no matter what the Ninth Circuit held. Additionally, the Navajo Nation in its briefs had convinced the court it had legally protected interest in its contract with Salt River. In cases involving contracts and leases, all parties had to be included in the litigation. This would include the Navajo Nation.

Although the appellate court found the Navajo Nation was a necessary party, it also found it could not be joined in the case. Native American tribes have sovereign immunity from suit by individuals unless they have clearly waived that immunity or Congress has removed it in a particular instance. The Ninth Circuit concluded the case should in fairness be dismissed because the Navajo Nation was indispensable to a resolution of the issues. A decision made in the absence of the Navajo Nation would cause prejudice to its interests and to the interests of Salt River, The appellate court did note the plaintiff possibly had two alternatives. First, while sovereign immunity was a defense in an action filed by an individual, the Ninth Circuit earlier had held it was not a defense in an action filed by a federal government entity, such as the EEOC. The EEOC had moved at the last minute to intervene in the case. Although the court had denied the request, the plaintiff could refile his case in conjunction with the EEOC. Second, the plaintiff could sue in tribal court lose and then bring an action against individual tribal officials the Navajo Supreme Court justices, in federal court. The Ninth Circuit upheld the trial court's dismissal of the case without prejudice to the plaintiff's right to refile the action. Dawavendewa v. Salt River Project Agricultural Improvement and Power District (Dawavendewa II) 276 F.3d 1150 (9th Cir. 2002). Again, the Supreme Court refused to hear an appeal of the case. At this juncture, it is undecided whether or not the plaintiff will pursue either of the options mentioned by the Ninth Circuit.

Regardless of what happens next in this particular case, it is clear Native American tribes will continue to secure and enforce tribal preferences in employment. It is also clear the EEOC will continue to oppose them, at least in instances such as the one presented here. With the ever-increasing involvement of tribes in economic development on and off reservations and the proliferation of businesses employing Native Americans, operating on and near reservations, and entering into contracts with Native Americans, courts will be busy sorting out the various employment law issues for quite some time.

RELATED ARTICLE: IN A NUTSHELL

(1.) While Native American tribes are not considered to be employers subject to liability under Title VII of the Civil Rights Act of 1964, Native American individuals have brought suit against companies based on race and national origin discrimination.

(2.) The EEOC recently filed the first national origin discrimination suit based on English-only rules imposed on Native Americans in the workplace.

(3.) The Indian Preferences exemption of Title VII allows companies operating on or near a Native American reservation to have a public policy of giving preference in employment to Native Americans on or near the reservation.

(4.) The EEOC has issued a policy statement that the Indian Preferences exemption allows general Native American preference but does not allow tribal preference but does not allow tribal preferences nowever, many Native American tribes requires tribal employment preferences through contractual and statutory requirements.

(5.) Supervisors should be aware of the increasing numbers of employment related cases involving Native Americans and seek counsel before making employment-related decisions that could result in litigation.