Unique Legal Issues Affect Employers
on Arizona Indian Reservations
Tribal and private entities seeking
to hire workers on or near a reservation should be aware of
confusing and conflicting statutes and case law that can affect
the employment relationship.
Generally, tribes and tribally owned entities are not
subject to state laws. While federal laws are generally applicable,
some federal laws expressly exempt Indian tribes.
to employment-related laws, the Americans with Disabilities Act
(ADA), Title VII of the 1964 Civil Rights Act (the federal
anti-discrimination statute) and the Employment Retirement and
Income Security Act (ERISA) specifically state that they do not
apply to tribes, although there are some ERISA exceptions. The
term “tribe” has been defined by case law to include tribally
owned entities; thus, since these laws do not apply to a tribe,
they do not apply to businesses that the tribe wholly owns.
applicability of other federal laws, such as the Fair Labor
Standards Act (FLSA), Family Medical Leave ACT (FMLA) and
Occupational Safety and Health Act (OSHA) is a bit more
complicated and subject to the courts’ interpretation. This
piecemeal approach has led to many rulings, some of which are
difficult to reconcile.
Adding to the confusion are conflicting
standards in many court rulings. The courts tend to find that
federal laws that are silent about applicability to tribes (a)
do apply when the tribe is acting like a commercial enterprise
but (b) do not apply when the tribe is acting like a
governmental entity. For example, the U.S. Ninth Circuit Court
of Appeals ruled, in one case, that the FLSA’s overtime pay
requirement applies to a tribally owned store; in another case,
that Court ruled that the same requirement does not apply to
payment of tribal police.
Another instance in which courts have
found that certain federal employment laws do not govern tribes
is when the tribe’s ability to govern itself would be hampered.
In one case, a nearby jurisdiction ruled that OSHA did not
govern the workplace safety issues at a tribally owned wood
manufacturing plant because enforcement would cause a treaty to
be abrogated; conversely, in a comparable case, the court found
that OSHA was applicable to a tribally owned farm where no
treaty rights were implicated. As is evident from these rulings,
determining the federal rights of employees on the reservation
requires a careful analysis of the type of business involved.
Business operations on a reservation must also address
the Title VII provision that permits tribes to preferentially hire local
Indians. This “Indian preference” is generally codified by the tribes’ own laws,
requiring businesses on or near the reservation to take certain steps to ensure
that tribal members and other local Indians are hired first. Many tribal laws
and regulations also prohibit the termination of employees without good cause –
a prohibition that conflicts with the State of Arizona’s “at-will” employment
hiring employees on or near a reservation, be sure to take all
of the levels of potentially applicable law into consideration,
so that your employment practices and employee handbook
accurately reflect the rights your employees do and do not have.