An Alaska Native corporation can be sued for allegedly discriminating
against its employees, a federal appeals court ruled on Tuesday.
In a unanimous decision, the 4th Circuit Court of Appeals
agreed that Congress exempted tribes and Alaska Native corporations
from discrimination lawsuits under Title VII of the landmark
Civil Rights Act of 1964.
But a three-judge panel said the same protections did not extend
to a different federal law that bars discrimination on the basis of
race or national origin.
The court said Chugach Alaska, an Alaska Native regional corporation,
doesn't fall in the same category as tribal governments.
"While the sovereign immunity of Indian tribes 'is a necessary corollary
to Indian sovereignty and self-governance,'"
Judge J. Harvie Wilkinson wrote in the 19-page opinion.
"Alaska Native Corporations and their subsidiaries
are not comparable sovereign entities."
The ruling opens Chugach to allegations that one of its
subsidiaries discriminated against two Hispanic men who said
they were subjected to racial slurs at a construction site in Maryland.
Chugach Support Services performs general contracting services
for the Department of Health and Human Services at the National
Institutes of Health.
A third employee, who is not Hispanic, said he was fired when
he reported the alleged hostile treatment of the Hispanic men.
While working on the government contract, Jose Aleman and Cesar Basilis
"allege that when they were employed by CSS, they were paid less than non-Hispanic employees
and were subjected to a hostile work environment and discriminatory
terms and conditions of employment, including anti-Hispanic statements
by managers and employees, segregated eating areas, and disparate
disciplinary treatment," the court opinion stated.
There is no guarantee the two men, or the third employee, will
prevail against Chugach, one of the largest Alaska Native corporation
The case was remanded to a federal judge for further proceedings,
which could include out-of-court arbitration.
But the lawsuit highlights growing concern, politically and legally,
about Alaska Native corporation contracting.
Democrats have objected because labor unions contend
the contracts are unfair and abusive
while Republicans have raised racial preference
and constitutional doubts.
So far, the courts have sided with the corporations.
In 2003, the D.C. Circuit Court of Appeals ruled that
Congress can carve out special
preferences for American Indian and Alaska Native-owned businesses
without violating the U.S. Constitution.
The U.S. Supreme Court refused to hear the case.
The 4th Circuit took a different approach after being presented
with an alternative to Title VII of the
Civil Rights Act, which specifically exempts tribes
and Alaska Native corporations.
The court instead looked at Section 1981
in Title 42, Chapter 21 of the U.S. Code, which lacks
But that doesn't mean Section 1981 applies to tribal governments.
In a recent case involving the Eastern Band of Cherokee Indians,
the 4th Circuit unanimously ruled that sovereign immunity
protected the tribe and its management company
from a discrimination lawsuit at
the Harrah's Cherokee Casino in North Carolina.
The court, however, said the Chugach dispute was not the same.
"[W]e find no basis to conclude that the ownership
of the defendant corporations by Alaska Natives and their devisees,
or any other attribute, entitles the defendants to immunity from
suits arising from their for-profit construction activities in Maryland,"
the court wrote.
The stakes in Alaska Native government contracting are high.
Chugach, in particular, has won billions of dollars in government
work through special laws and regulations meant to favor minority-owned
Just this Tuesday, the
House Oversight and Government Reform Committee passed a bill
to revise government contractor policies but only
after adopting an amendment to ensure tribal and Alaska Native
corporation business weren't harmed.
Aleman v. Chugach
(May 3, 2007)
v. Harrah's NC Casino
(April 27, 2006)
Outsourcing the Pentagon:
Chugach Alaska Corporation
(Center for Public Integrity)
Chugach Alaska - http://www.chugach-ak.com
Opinion: Alaska Natives
need tribes not corporations
Alaska Native corporations a major force in
Column: Alaska Natives abuse minority
(11/13) Alaska Native
contracting program questioned
(07/17) Alaska Native contracting comes under attack
(6/22)House hearing on Alaska Native
Court throws out suit challenging Indian
GAO calls for more oversight of Alaska Native
(04/28) Sen. Stevens defends
Alaska Native contracting
warns of Alaska Native contract abuse
(4/12) Business Week: Choctaws land shady Katrina contract
(4/5) Alaska Native corporations await
(03/20) Defense rider targets
Alaska Native contracting
Congressional probe will hurt Indian business
(03/21) Alaska Native corporation contracts under scrutiny
(3/7) Non-Native companies benefit from
(08/13) Alaska Native
subsidiary wins defense contract
(06/29) Alaska Native subsidiary awarded NASA contract
(06/25) Native firm leases Stevens
building for $6M
Court rejects appeal of Native preference case
Court rejects union claim against
Native corp close to $2.5B
Corp. survives bankruptcy