I’m proud to have graduated from the University of Tulsa College of Law, home of the Native American Law Center. Because of TU’s deep commitment to the study of of Indian law issues, I certainly developed an appreciation to this specialized practice of law and its unique history. On Thursday, September 15, Minnesota swore in its first Native American Justice to our Supreme Court – Justice Anne K. McKeig, as reported by KSTP. Justice McKeig descends from the White Earth Tribe Ojibwe.

Naturally, I knew I just had to find a way to tie in this monumental event with my wage and hour blog. Thus, I felt it appropriate to explore whether the FLSA applies to Native American tribes. There are actually two very distinct issues in that single question: (1) whether the FLSA applies to the Tribe’s business; and (2) whether the Tribe has sovereign immunity with respect to the FLSA. Thus, even if the FLSA does apply to a Tribe, it may have immunity from a private suit for violation of the FLSA, though the courts tend to blur the two together often. This is admittedly a horribly long blog…I admit I may have gotten a bit carried away. However, because of how the courts don’t distinguish the two issues well, I just couldn’t find a good way to make this a two-parter. So, here we go!

Does the Federal Fair Labor Standards Act (FLSA) Apply to a Tribe’s Business?

Maybe.  If you were to Google that question, you’ll see a 9th Circuit Court of Appeals case from 2009 (Solis v. Matheson) flood your screen with various degrees of interpretation of the opinion. The 9th Circuit decided that the FLSA does apply to a “retail business located on an Indian reservation and owned by Indian tribal members”. However, this is not super helpful to us here in the Midwest, for several reasons. First, we (MN, AR, IA, MO, SD, ND, NE) are in the 8th Circuit Court of Appeals. We don’t have to follow the 9th Circuit interpretations of the law (for those of you unaware, that includes the state of California and is often 180 degrees different from many other circuits on the same issue). The 8th Circuit only defers to the precedent set by the U.S. Supreme Court, though it certainly can – and will – analyze and rely upon other courts. Thus, as I am always saying, you have to dig deeper (and then dig some more).

For example, in Costello v. Seminole Tribe of Florida (2010), the Middle District of Florida, Tampa Division, held that the FLSA does apply to a Tribe, but doesn’t expressly abrogate its sovereign immunity (the second question). Thus, the Court noted that the Tribe retains immunity absent an effective waiver. In Reich v. Great Lakes Indian Fish and Wildlife Commission (1993), the 7th Circuit Court of Appeals held that Tribal policemen are exempt from the FLSA, but that may not be the case with other employees of Indian agencies (hinting that policemen are different from employees who are engaged in a commercial or service character versus government character). Accordingly, this is not a simple question to answer.

Has The Tribe Waived Its Sovereign Immunity As to the FLSA?

As happened with a prevailing wage case I handled several years ago, a Tribe can actually chose to follow a federal or state law, removing all doubt as to whether sovereign immunity applies. Accordingly, the first thing to do, would be to determine whether your Tribe has indeed waived sovereign immunity as to a FLSA-based claim in its constitution, general administrative policies and procedures, handbook (for example, does it use words like “exempt” and “non-exempt” and/or reference state and/or federal wage and hour laws, or does it have its own wage and hour ordinances?), or other contract. For example, in 2007, the Tribal Court of the Little Traverse Bay Bands of Odawa Indians (LTBB) held in Harrington v. The Little Traverse Bay Bands of Odawa Indians, that the members of the LTBB could have voted for such inclusive waiver of rights in the LTBB Constitution, but did not do so. In Mitchell v. Pequette, (2008), the employee argued to the Leech Lake Band of Ojibwe Tribal Court that the General Administrative Policies and Procedures state the Band “may apply” the FLSA “when applicable”. However, the Tribal Court held that it is permissive rather than mandatory (“shall”), and thus, did not serve to waive its sovereign immunity.

What Have the Federal Courts Ruled on this Issue?

If no waiver is clear, then you’d look to common law (how the courts interpret the law). Currently, the only certainty is that there is not yet a definitive answer in the 8th Circuit. I recognize this provides little comfort. The only 8th Circuit case that is somewhat instructive is EEOC v. Fond du Lac Heavy Equipment and Construction Co., Inc.. In deciding that the Age Discrimination in Employment Act (ADEA) did not apply to a elder member of the Fond du Lac Band of Lake Superior Chippewa, the 8th Circuit held that the facts in that case reveal a dispute that “involves a strictly internal matter” regarding business located on the reservation. However, the Court also noted that the U.S. Supreme Court has stated that “general acts of Congress apply to Indians as well as to all others in the absence of a clear expression to the contrary” except when the interest sought to be affected is a “specific right reserved to the Indians”, usually based upon treaty, but also upon statutes, executive agreements and federal common law. Accordingly, the 8th Circuit held that consideration of a member’s age by Tribal employer may be considered by the Tribe “in accordance with its culture and traditions” and that such disputes should be “allowed to be resolved internally within the tribe” so as not to interfere with an “intramural matter that has traditionally been left to the tribe’s self-government.”

However, this is where I think the FLSA and ADEA may ultimately diverge someday when challenged in federal court in this Circuit. Is it possible that a Tribe could argue that paying a woman less, for example, or for paying individuals less than minimum wage, or to work excessive hours is “in accordance with its culture and traditions”, and thus not within the purview of the FLSA? Maybe. Indeed, Judge Wollman wrote a dissent (disagreement) in the EEOC case, stating that he would have agreed with the EEOC that the ADEA applies to the Tribe, as he does not believe the ADEA poses a threat to the Tribe’s sovereignty and that there is no evidence that Tribes have long-standing cultural practices favoring younger members of the tribe (nor did the Tribe argue that was the case).

However, as noted by the 7th Circuit in Reich v. Great Lakes Indian Fish and Wildlife Commission, the FLSA does not mention “Indians”, “tribes” or anything to suggest they intended to abrogate tribal sovereign immunity. In 2008, in Chao v. Spokane Tribe of Indians, the Eastern District of Washington held that the FLSA applied to a casino that was open to the public, but noting the “analysis of whether a tribe is entitled to immunity is full of twists and turns” and that Tribes are “not immune from suits brought by the federal government” particularly those of general applicability (such as the FLSA) which are silent on the issue of applicability to Indian tribes. Also in 2008, the 11th Circuit, in Lobo v. Miccosukee Tribe of Indians of Florida, held that whether a Tribe may be subject to the FLSA and whether they may be sued for violating the FLSA are “two entirely different questions”. The Court held that the Tribe enjoyed sovereign immunity and thus, could not be sued by a private individuals for FLSA violations.

As noted above, in 2009, in Solis v. Matheson, the 9th Circuit Court of Appeals held that the overtime provisions of the FLSA apply to a retail business (Baby Zach’s Smoke Shop) on Puyallup Tribal land owned by Puyallup Tribe members. In this case, tobacco products were sold to both Indians and non-Indians, and its annual gross sales were over the FLSA’s $500,000 threshold. The Court noted that this is not the same as, for example, the case with the applicability of the FLSA to Tribal law enforcement, as that is a traditional government function expressly exempted from the FLSA. Ultimately, since the Tribe had not enacted its own wage and hour laws, the Court decided that the overtime provisions of the FLSA applied to this commercial enterprise, and that there is “nothing profoundly intramural or involving self-governance about the employment of Indians and non-Indians by a retail business engaged in interstate commerce”. However, it is important to note that the court specifically noted that the 8th Circuit took a more narrow approach in its analysis of the ADEA with respect to making the analogy for the FLSA.

In 2010, in Brown v. Cheyenne Arapaho Tribes, Oklahoma, the Western District of Oklahoma held that it did not have jurisdiction over a FLSA claim by former employees of the Cheyenne and Arapaho Tribes working in a casino operated by the Tribe. The Court decided that sovereign immunity deprived it of jurisdiction to entertain lawsuits by private citizens against an Indian tribe, its subdivision, or its officials acting within their official capacities. Notably, however, the Court did distinguish that the lawsuit was by a private citizen versus a federal agency (presumably such as the EEOC or DOL). The Court also noted that Tribal officials may be sued in an individual capacity, but that the plaintiff failed to connect the named officials to the alleged FLSA violation. Also in 2010, a Middle District of Florida court held, in Costello v. Seminole Tribe of Florida, that the FLSA does apply to the Tribe, but that it has sovereign immunity from personal lawsuits for such violations.

In 2011, in Larimer v. Konocti Vista Casino Resort, Marina & RV Park, the Northern District of California held that the FLSA did not exempt the Tribe’s sovereign immunity in a claim brought by a former casino employee against a casino owned by the Tribe, located on Tribal land.  However, the Court does distinguish these facts – noting that in Solis v. Matheson, the defendant business was owned by a Tribe member, not the Tribe, and that the action was brought by the US Secretary of Labor (DOL) not a private citizen – and suits by the United States and its agencies are generally not barred by sovereign immunity (suggesting that the DOL can sue a Tribe for FLSA violations).

What Have Tribal Courts Decided?

Similarly, Tribal courts cannot agree. For example, in Mitchell, the Leech Lake Band of Ojibwe Tribal Court held that the FLSA does not apply to the Band. Yet, it did note, “when a tribal government goes beyond matters of internal self-governance and enters into off-reservation business transactions with non-Indians, its claim of sovereignty is at its weakest.” (citing San Manuel Indian Bingo and Casino v. NLRB). On the other hand, the Tribal Appellate Court of the Little Traverse Bands of Odawa Indians held that its Tribal Court was capable of hearing a FLSA case (there, the Tribal Court deferred the FLSA question to a federal or state court, mistakenly believing that it was not the proper forum for a FLSA claim).

What Is the Department of Labor’s Position?

Finally, even the U.S. Department of Labor appears to be somewhat conflicted, as noted in its opinion letter FLSA2001-17. There, the question was whether the FLSA applied to Tribal employees employed as nurses to work at a hospital/clinics operated by the Tribe, but which also was operating under a contract with the Indian Health Service of the U.S. Department of Health and Human Services. The DOL stated it could not waive an individual’s right to minimum wage or overtime for the reasons provided by the Tribe, yet the DOL also hinted to the Tribe that it should “be aware” that a number of 10th Circuit decision may have a bearing on federal employment laws to Tribal employers (those cases both concluding that the Tribe had sovereign immunity). Yet, there are numerous cases where the DOL has sued a Tribe for violation of the FLSA (see Reich, for example). However, very important is the fact that, as noted above, that the United States and its agencies are generally not barred by sovereign immunity to bring a lawsuit against a Tribe. Accordingly, the cases that have allowed a FLSA suit to continue, as noted above, were those brought by the United States Secretary of Labor for alleged FLSA violations (such as Spokane Tribe of Indians, Matheson, and Reich).

The Unfortunate Conclusion

At this time, unfortunately, there is still no clear answer. Thus, Tribes should be very cautious when deciding to take the position that they are exempt from the purview of the FLSA. Numerous factors should be looked at prior to making such a determination, including your applicable Tribal and federal court interpretations of the FLSA (not OSHA, ADA, ADEA, etc.) and the actual work performed, by whom, and in what setting. Further, whether a lawsuit may be brought may also depend on whether it is being brought by the DOL for example, or an individual employee.