Sixth Circuit Holds National Labor Relations Act Applicable to Indian Tribe's Casino

Weighing in on a hotly contested issue, a panel of the Sixth Circuit has found that federal labor law applies to Indian tribes’ casinos, notwithstanding the tribes’ inherent sovereignty. However, the panel only did so because it was bound by an earlier decision from a panel of the same court — showing how closely divided the courts are on this subject. The ruling sets up an opportunity for en banc review at the Sixth Circuit on the specific issue of the applicability of federal labor law to tribal employees, or a petition for certiorari to the U.S. Supreme Court to clarify differing circuit approaches to the general applicability of federal statutes to Indian tribes.

Background

The Saginaw Chippewa Indian Tribe of Michigan is a federally recognized Indian tribe with more than 3,000 members. In the 1800s, the tribe granted land to the federal government under two treaties. Under an 1864 treaty, the United States agreed to set apart property in Isabella County, Michigan, as a reservation for exclusive use, ownership and occupancy by the tribe. The treaty also gave the tribe the right to exclude non-Indians from living in the territory. The tribe operates the Soaring Eagle Casino & Resort on its reservation, on land held in trust for the tribe by the United States. Only about 7 percent of the casino’s 3,000 employees are tribe members. The casino generates approximately $250 million in gross annual revenues, constituting nearly 90 percent of the tribe’s income. Casino income provides the funding to run the tribe’s 37 departments and 159 programs, including health administration, social services, tribal police and fire departments, utilities, a tribal court system and a tribal education system.

The casino’s employees must adhere to the policies set forth in its Associate Handbook. The handbook includes a policy prohibiting solicitation by any employee, including solicitation related to union activities, on casino property and states that any person violating the policy will be subject to discipline up to and including termination. On November 15, 2010, the casino discharged housekeeper Susan Lewis for engaging in union solicitation activities on behalf of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America in violation of the no-solicitation policy.

The National Labor Relations Board Decision

On April 1, 2011, the union filed a charge with the National Labor Relations Board (NLRB) alleging that the tribe’s no-solicitation policy violates sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act (NLRA). On March 26, 2012, the Administrative Judge (AJ) issued his decision and order finding that the NLRB had jurisdiction over the casino and tribe and that the tribe’s no-solicitation policy violated the NLRA.

The AJ determined that:

• Restricting operations at a casino on reservation land does not interfere with the tribe’s right of self-governance.
• The applicable treaties only provided for a general right of exclusion (of non-Indians) and did not bar application of an act of general applicability like the NLRA.
• Nothing in the language of the NLRA or its legislative history shows a congressional intent to exclude Indians from its coverage.

The tribe appealed the AJ’s decision to the NLRB, which adopted the AJ’s decision and order. The tribe then appealed to the U.S. Court of Appeals for the Sixth Circuit.

The Sixth Circuit Decision

On July 1, 2015, the Sixth Circuit issued a lengthy opinion concluding that the NLRA applied to the casino and entered judgment enforcing the NLRB’s order and denying the tribe’s petition for review. The Court acknowledged that Indian tribes have inherent sovereignty and stated that a federal statute should have a clear congressional intent to encroach on that sovereignty to be applicable to the tribes. However, on June 9, 2015, a panel of the Sixth Circuit had issued an opinion that the NLRB had jurisdiction over the Little River Band of Ottawa Indians’ casino based on an analytical framework for generally applicable federal statutes established in a Ninth Circuit case. The Sixth Circuit panel reviewing the issues in the Soaring Eagle case disagreed with a portion of the Little River holding, stating, “If writing on a clean slate, we would conclude that the Tribe has an inherent sovereign right to control the terms of employment with nonmember employees at the Casino, a purely tribal enterprise located on trust land. The NLRA, a statute of general applicability containing no expression of congressional intent regarding tribes, should not apply to the Casino and should not render its no-solicitation policy void.” But this panel of the Sixth Circuit is bound by the holding in the Little River case, so it ultimately ruled that the NLRA applies to the Soaring Eagle Casino and the NLRB has jurisdiction over the dispute.

Other Circuit Court Opinions

The Sixth Circuit’s application of the NLRA to on-reservation casinos operated by Indian tribes joins other circuit courts that have issued similar opinions relating to applicability of federal statutes to Indian tribes. Specifically, the Second, Seventh, Ninth and Eleventh circuits have applied the analytical framework used by the Sixth Circuit to determine whether federal statutes of general applicability apply to Indian tribes. However, the Eighth and Tenth Circuits have rejected the analytical framework used by the Sixth Circuit. The Eighth Circuit has specifically held that laws of general applicability will not be applied to Indian tribes absent a showing of congressional intent to do so.