Legal Alert: Federal Court Finds NLRA Applies to Casino Operated by Native American Tribe

Date   Feb 16, 2007
The D.C. Circuit Court of Appeals has held that the National Labor Relations Act (NLRA) applies to employment at a casino operated by a Native American tribe on its reservation.

The D.C. Circuit Court of Appeals has held that the National Labor Relations Act (NLRA) applies to employment at a casino operated by a Native American tribe on its reservation. See San Manuel Indian Bingo & Casino v. NLRB (D.C. Cir. 2007). In reaching this determination, the court held that the application of the NLRA to the San Manuel Casino would not significantly impair tribal sovereignty; thus federal Indian law does not preclude the National Labor Relations Board (the Board) from applying the NLRA to a casino owned and operated by the tribe.

In this case, the casino was owned and operated by the San Manuel Band of Serrano Mission Indians (the Tribe) on its reservation. The casino employed many non-Indians and catered primarily to non-Indians. The Communication Workers of America (CWA) and the Hotel Employees & Restaurant Employees International Union (HERE) both sought to organize the casino employees. HERE filed an unfair labor practice charge with the Board, claiming the casino allowed CWA representatives access to the casino property while denying access to HERE representatives.

The Tribe sought to dismiss the charge for lack of jurisdiction, which the Board denied, holding that the NLRA applies to tribal governments and that federal Indian policy does not preclude application of the NLRA to the commercial activities of tribal governments. The Board subsequently issued an unfair labor practice determination and a cease and desist order, from which the Tribe sought review in the D.C. Circuit.

The D.C. Circuit affirmed the Board’s determination, but used a different analytical framework. The court held that its primary inquiry is whether the relation between the Tribe's sovereign interests and the NLRA is such that the ambiguity in the NLRA should be resolved against the Board's exercise of jurisdiction. In addressing this issue, the court first looked at whether the application of the NLRA to the casino would violate federal Indian law by impinging upon protected tribal sovereignty. If it does not, the court would then address whether the term employer as used in the NLRA includes Indian tribal governments operating commercial enterprises.

The court first noted that the U.S. Supreme Court has held that “a general statute in terms applying to all persons includes Indians and their property interests.” Id. (citing Federal Power Commission v. Tuscarora Indian Nation, 362 U.S. 99 (1960)). The court then noted that this statement is in conflict with the longstanding principles, set forth in numerous Supreme Court decisions, that ambiguities in a federal statute must be resolved in favor of Indians and a clear expression of Congressional intent is necessary before a court may construe a federal statute to impair tribal sovereignty.

Acknowledging this apparent conflict in statutory construction principles, the D.C. Circuit held that in some situations, a statute may constrain the activities of a tribal government without at the same time impairing tribal sovereignty.

The court noted that the U.S. Supreme Court has distinguished among the different activities tribal governments pursue, focusing on acts of governance as the measure of tribal sovereignty. The court determined that the Tribe’s activity in operating the casino was primarily commercial and that any impairment of tribal sovereignty resulting from the application of the NLRA to the casino would be negligible. “The total impact on tribal sovereignty at issue here amounts to some unpredictable, but probably modest, effect on tribal revenue and the displacement of legislative and executive authority that is secondary to a commercial undertaking.”

Thus, the court determined that it was not required to choose between the two methods of statutory construction because application of the NLRA to the casino would not impinge on the Tribe’s sovereignty enough to require it to construe the statute narrowly against application to the casino. The court noted that the operation of the casino is not a traditional attribute of self-government and that the casino in this case was virtually identical to numerous purely commercial casinos. Additionally, the majority of the casino’s employees and customers were not members of the Tribe and live off the reservation. Thus, since applying the NLRA to San Manuel's Casino would not impair tribal sovereignty, the court determined that federal Indian law does not prevent the Board from exercising jurisdiction.

The court then found that the Board’s determination that the Tribe is an employer under the NLRA and does not fall within any of the NLRA’s listed exceptions is a “permissible construction of the statute.” The court rejected the Tribe’s argument that the Indian Gaming Regulatory Act of 1988 (IGRA) implicitly restricts the scope of the NLRA. The court found “no indication that Congress intended to limit the scope of the NLRA when it enacted IGRA, and certainly nothing strong enough to render the Board's interpretation of the NLRA impermissible.”

Accordingly, the court denied the petition for review and granted the Board’s application for enforcement.

Employers' Bottom Line:

This decision is significant for tribal governments that own and operate casinos on tribal reservations, since, if other federal courts follow the analysis of the D.C. Circuit, such groups could be subject to the NLRA's requirements, which may conflict with ordinances addressing the organizational and representational rights of casino employees adopted by tribes under the IGRA. If you have any questions regarding this decision or its potential impact on your operations, please contact the Ford & Harrison attorney with whom you usually work or Troy Foster, a partner in our Phoenix office, at or 602-627-3504.