Even as proposed federal labor reforms die on Capitol Hill, legal observers still see an uptick in labor unions seeking to organize workers at tribal casinos.
Two years ago proposed congressional legislation to make it easier for labor unions to organize workers ignited major opposition from the nation’s American Indian tribes and Alaska Native villages, particularly those operating 440 casinos in 28 states.

The Employee Free Choice Act (EFCA), or the “card check” bill – a union effort to avoid elections required by the National Labor Relations Act (NLRA) – has since blipped off the Capitol Hill radar, victim of the recession, the Obama Administration push for health care and finance reform and political focus on upcoming midterm elections.

“Those three things have kept EFCA from going anywhere,” said Paul Moorehead, partner in the Washington, D.C. firm Drinker, Biddle & Reath LLP, “the Obama agenda, the economy and now the election.”

Pro-business Republican midterm election gains in the House and Senate are expected to prevent EFCA from resurfacing.

“The legislation isn’t moving this year,” said John Dossett, counsel for the National Congress of American Indians. “I hate to predict anything after the elections, but it doesn’t appear to be doing anything right now.”

But intrusion of federal labor law remains a festering sore spot in Indian country.

Tribes have historically been exempt from the NLRA, but judicial protection has waned with the birth of the $26bn tribal casino industry and expansion of tribal economies.

“Things have evolved over the last 10, 15 years,” said Greg Guedel, attorney for Foster Pepper PLLC of Seattle, Washington.

“Tribes have moved beyond the traditional reservation smoke shop operated by three tribal employees. Tribes have casinos, Wal-Mart, Home Depot and other big box retailers, on and off reservations, with non-Indian employees.

"That evolution has begged the question: ‘Now you’ve got this big operation, what are the rules now?’”

In a landmark 2007 ruling involving the San Manuel Band of Mission Indians of San Bernardino County, California, the District of Columbia Circuit Court declared the tribal casino subject to the National Labor Relations Board, ruling it was a commercial and not a government enterprise with a majority of non-Indian employees.

Then-tribal chairman Henry Duro said the ruling miscued the purpose of casino gambling as a means of generating revenue to provide government services.

“Gaming helps tribes fulfill essential governmental functions, providing education, health care, housing, senior care and other key programs,” Duro said.

Scrutiny under federal labor law is heightened when a business is off the reservation. Most tribal casinos are on Indian land but the vast majority of 284,000 employees are non-native. Some seek the protection of national labor law and unions.

“Non-Indian employees and off-reservation enterprises are the two arguments used by people in and out of Congress who believe tribal exemption to labor statute is unfair and inequitable,” Moorehead said.

“A lot is fact-specific,” Guedel said. “If you have a wholly owned tribal business located on a reservation, even though they may have non-tribal employees you’re going to have different factors involved in terms of NLRB jurisdiction.

“This area of law is evolving, week-by-week, because with expansion of tribal economies tribes are operating under scenarios they weren’t involved with before. There are not a lot of hard-and-fast rules at this point.”

Tribes are at the mercy of the San Manuel case and Solis v. Matheson, where the 9th Circuit Court of Appeals ruled a reservation business operated by Puyallup Tribe of Washington State was subject to the Fair Labor Standards Act. The court said federal compliance agents could enter tribal lands and search records.

“Federal intrusion is a bitter pill to swallow, but it’s the flip side of the Indian gaming revenue coin,” said attorney Steve Wheeless, in the Phoenix, Ariz., office of Steptoe & Johnson LLP.

“The harsh reality is tribes with non-Indian employees cannot expect to profit from a largely non-tribal customer base and at the same time invoke tribal sovereignty to avoid federal labor laws.”

Wheeless predicts “dramatic increases” in unions organizing tribal casinos.

San Manuel has a collective bargaining agreement with the Communication Workers of America and the United Auto Workers recently organized 2,500 employees at Mashantucket Pequot’s Foxwoods Casino, a no-strike agreement drawn up under a tribal labor ordinance.

Legal experts suggest tribes draft their own labor ordinances, policies and procedures. “When a tribe has a well thought out set of labor policies and employment regulations the federal government is a lot less likely to get involved,” Guedel said.

Meanwhile, the National Congress of American Indians will continue to seek an NLRA exemption.

“Thatissue is still a concern for tribes,” Dossett said. “It’s something we’re working on.”

A Republican Congress and the House Committee on Education and Labor may be receptive to a tribal exemption to federal labor law.

“I predict legislation (to exempt tribes from NLRA) will be reintroduced in January and the committee will hold hearings and try to pass the bill,” Moorehead said.