Legislation | Litigation

Appeals court sides with NLRB in Little River Band casino case

Wednesday, June 10, 2015

A view of the Little River Casino Resort in Manistee, Michigan. Photo from Facebook

A divided federal appeals court handed defeat to the Little River Band of Ottawa Indians on Tuesday amid growing debate about the impact of federal labor law on tribal casinos.

By a 2-1 vote, the 6th Circuit Court of Appeals said the National Labor Relations Board was correct to assert jurisdiction over the Little River Casino Resort. The decision means the tribe can't enforce its own labor laws at the facility because certain provisions conflict with the National Labor Relations Act.

"Tribal regulations of the activities of non-members are enacted at the frontier of tribal sovereignty," Judge Julia Smith Gibbons wrote for the majority. "Again, not even the states -- whose sovereign powers are explicitly protected by the Tenth Amendment -- may avoid the application of federal law by enacting directly conflicting legislation."

The court noted that most of the employees and patrons at the casino are not tribal members. So imposing federal labor law there does not infringe on the tribe's sovereignty, Gibbons concluded.

"The right to conduct commercial enterprises free of federal regulation is not an aspect of tribal self-government," the decision stated. "And Indian tribes are not shielded from general federal statutes because the application of those statutes may incidentally affect the revenue streams of tribal commercial operations that fund tribal government."

The court acknowledged that Congress passed the Indian Gaming Regulatory Act to ensure that tribal casino revenues support tribal programs. About 50 percent of the Little River Band's budget comes from the casino.

But Gibbons said Congress did not "immunize" tribal casinos from other federal laws. And the court noted that the NLRA does not exempt tribal governments like it does for state and local governments.

GIbbons wrote that "the band is not a state, and tribal sovereignty and state sovereignty are built on different foundations and are accorded different protections in our constitutional order."

Sen. Jerry Moran (R-Kansas). Photo from Facebook

The situation could be changing soon though. The Senate Indian Affairs Committee will vote later today on S.248, the Tribal Labor Sovereignty Act, a bill that shields tribes and their enterprises from federal labor law.

"It is not the place of the federal government to impinge upon the authority of the sovereign tribes," Sen. Jerry Moran (R-Kansas), a member of the committee who is sponsoring S.248, said in a letter to colleagues, urging them to support the measure. "Tribal governments alone, accountable to their people, should decide the labor practices for the entities they own on their lands."

The NLRA first became law in 1935, just a year after the Indian Reorganization Act began a new era of self-determination. It does not mention tribes but that didn't matter much for nearly 70 years.

Everything changed in 2004, when the NLRB asserted jurisdiction over Indian Country for the first time by pointing to the "commercial" nature of tribal casinos and noting that most employees and patrons are non-Indians. The ruling, which withstood a court challenge, has since been used to subject tribes across the nation to federal labor law.

Tribes have tried to weaken the ruling but have lost nearly every administrative proceeding. That changed last week when the NLRB declined to assert jurisdiction over a casino owned by the Chickasaw Nation of Oklahoma.

The board determined that imposing the NLRA on the WinStar World Casino and Resort conflicts with the tribe's treaties. But there is no guarantee that other tribes will be able to secure favorable rulings given the uncertain nature of the process.

"Such a matter of policy is within Congress’s exclusive and plenary authority," Judge David McKeague noted in his dissent to yesterday's decision.

McKeague believes the Little River Band's Fair Employment Practices Code, which bars strikes, work slowdowns and other activities allowed under federal law, represents an exercise in tribal sovereignty. He said it does not matter that most of the casino employees are non-Indians.

"To the extent that nonmembers are subject to regulation under the FEP Code, the regulation flows directly from the band’s inherent sovereign interests in tribal self-government and management of internal relations," McKeague wrote.

The split nature of the decision makes it a prime candidate for a rehearing before a larger en banc panel of judges. The 6th Circuit recently heard a labor dispute involving the Saginaw Chippewa Tribe but a ruling hasn't been issued.

6th Circuit Decision:
NLRB v. Little River Band of Ottawa Indians (June 9, 2015)

Committee Notices:
Business Meeting to consider S. 248 (June 10, 2015)
Legislative Hearing on S. 248, the "Tribal Labor Sovereignty Act of 2015" (April 29, 2015)

Additional Coverage:
Federal Appeals Court Says Michigan Indian Tribe Subject to Federal Labor Laws (WMUK 6/10)
6th Circuit adds to split on NLRB's power over Indian casinos (Reuters 6/9)
6th Circ. Says NLRB Has Authority Over Mich. Tribal Casino (Law360 6/9)

From the Indianz.Com Archive:
Tribal labor law rider killed by wide margin in House (June 27, 2005)
Federal labor board expands jurisdiction over tribes (June 4, 2004)