JurisdictionUnited States
Natural Resources Development in Indian Country
(Nov 2005)


Walter E. Stern
Daniel W. Long
Modrall, Sperling, Roehl, Harris & Sisk, P.A.
Albuquerque, New Mexico

Mr. Stern is a shareholder in the Albuquerque, New Mexico office of Modrall, Sperling, Roehl, Harris & Sisk, P.A. His practice is concentrated in litigation, administrative practice, ADR, and business advice in the areas of natural resources, energy, Indian law, and public lands administration. Walter's practice includes experience representing private businesses in transactions and litigation with Indian tribes and other Native American groups around the west and across the country.

Walter has been active in the affairs of the Rocky Mountain Mineral Law Foundation, having served: as Secretary in 2003-2004, as a Trustee from 1997-2001 and 2003-2004; as a Member of the Executive Committee during 1999-2001 and 2003-2004; as Program Chair for the 47th Annual Institute in 2001; and most recently as Chair of the Foundation's Special Institutes Committee beginning late in 2002. He also has served as Chair of the Public Lands Committee (1995-97) of the American Bar Association section formerly known as "SONREEL". He has been listed in Best Lawyers in America, since 1995 in the Natural Resources and Environmental Law category.

A native Californian, Walter moved to New Mexico after receiving his undergraduate degree, a B.S. in Forestry (with honors), from the University of California at Berkeley, and his J.D. from Boston College Law School (cum laude).

Mr. Long is a shareholder in the Albuquerque office of Modrall, Sperling, Roehl, Harris & Sisk, P.A. Dan represents many of the firm's natural resources clients on employment, Indian lands, and other issues, and represents a variety of other private and public entities doing business on Indian lands. He is licensed in the Navajo Nation and has defended employers before the Office of Navajo Labor Relations, the Navajo Nation Labor Commission, and the Navajo Nation Supreme Court. In addition, he advises employers regarding the application of the Navajo Preference in Employment Act and other tribal employment rights ordinances. Dan is the 2005 Chair of the New Mexico Bar Association's Section on Natural Resources, Energy, and Environmental Law and currently serves on the Admissions Committee of the Navajo Nation Bar Association.

Dan received his undergraduate degree in Political Science and Business Economics from the University of California at Santa Barbara, with high honors, and received his J.D. from the University of Michigan, cum laude.

I. Introduction.

Many employers operate on or near Indian lands or in "Indian Country" throughout the United States, but particularly in the Southwest and Rocky Mountain regions. Although most companies are cognizant of the additional operational issues that may arise on Indian lands (such as additional tax issues, additional permitting, the need to coordinate with the Bureau of Indian Affairs, etc.), it is also important to recognize that companies may be subject to different and sometimes conflicting employment laws and may face other challenges when operating on or near Indian reservations. Companies operating on Indian lands should be aware of specialized application of federal statutes, questions concerning the applicability of state laws, and particularly, the application of tribal laws that may impact their operations.

Many Indian tribes, pueblos and other groups have adopted tribal employment rights ordinances ("TEROs") to regulate employment and labor practices on Indian reservations across the United States. These TEROs vary significantly from Tribe to Tribe, and generalizations are dangerous. Specific analysis of any particular TERO or comparable tribal regulatory scheme is critical. However, there are a number of issues that arise when Indian tribes seek to impose such tribal regulation on businesses operating on or near Indian reservations.

This paper will provide a discussion of federal, state and tribal laws potentially applicable to businesses, tribes and tribal enterprises operating on or near Indian reservations or otherwise within the jurisdiction of an Indian tribe or tribes.

II. Applicability of Federal Employment and Labor Laws in Indian Country.

The range of federal employment and labor laws applicable to businesses can apply differently, in certain respects, to employers operating on or near Indian lands or reservations. This section of the paper addresses a series of federal statutes and the manner in which they may apply to non-Indian businesses on the one hand, and to Indian tribes, Pueblos or other Native American groups and their tribally-owned enterprises on the other hand.

A. Title VII of the Civil Rights Act and the "Indian Exemption" for Employment Preferences.
1. Applicability to private employers.

Title VII of the Civil Rights Act of 1964 and the related affirmative action obligations imposed by Executive Order 11246 ("E.O. 11246") apply to businesses operating on or near Indian reservations. Title VII and E.O. 11246; however, provide an exemption to certain employers located "on or near" Indian reservations from charges of discrimination if those employers extend publicly announced employment preferences to Indians who also live "on or near" a reservation.

Of course, Title VII prohibits employers from discriminating on the basis of "race, color, religion, sex, or national origin." 2 However, the so-called Title VII "Indian exemption" provides:

Nothing contained in this subchapter shall apply to any business or enterprise on or near an Indian reservation with respect to any publicly announced employment practice of such business or enterprise under which preferential treatment is given to any individual because he is an Indian living on or near a reservation. 3

To comply with this provision, a private employer must: (a) be located on or an Indian reservation; (b) announce publicly its employment policy or practice concerning the application of an Indian employment preference; (c) offer the preference to Indians who live on or near a reservation. Although federal courts have held that application of this exemption should be determined on a case-by-case basis, the phrase "on or near" has been interpreted to mean on the reservation or within the distance surrounding the reservation that a person seeking employment could reasonably be expected to commute for a work day. In the Equal Employment Opportunity Commission ("EEOC") Compliance Manual (1988), the EEOC expressed the view that an employer operating a facility 60 miles from an Indian reservation in Montana is "on or near" the reservation, and that a Native American living within 8 miles of that reservation and 52 miles from the employer's facility is living "on or near" the reservation. 4

In all other respects, Title VII and E.O. 11246 apply to private companies operating on or near Indian lands. For example, both Title VII and E.O. 11246 bar discrimination on the basis of gender on or near Indian lands.

At this time, as a matter of federal law and policy, the "Indian preference" exemption in Title VII and E.O. 11246 will not permit an employer to offer a preference for the members of a particular tribe over the members of other tribes. The federal EEOC's policy and interpretation of the statutory "Indian exemption" permits application of a preference for "Indians" generally. The EEOC does not interpret the "Indian exemption" to allow employers to apply preferences in favor of the members of one tribe over the members of other tribes. 5

The U.S. Court of Appeals for the Ninth Circuit considered this issue in Dawavendewa v. Salt River Project Agricultural Improvement and Power Dist., 154 F.3d 1117 (9th Cir. 1998) ("Dawavendewa I"), and concluded that a tribal preference was not authorized under the Title VII exemption. In Dawavendewa I, the Salt River Project Agricultural Improvement and Power District ("Salt River Project" or "SRP") entered into a lease with the Navajo Nation allowing Salt River Project to operate a coal-fired electric generating station on Navajo trust lands on the Navajo Reservation. The lease provided in pertinent part that SRP must grant employment preferences to members of the Navajo Nation. 6

Mr. Dawavendewa, a member of the Hopi Tribe, applied for a position with SRP and was refused employment, despite that he lived on or near the Navajo Reservation. Mr. Dawavendewa sued and argued that SRP's rejection of his application was unlawful discrimination under Title VII.

The United States District Court in Arizona dismissed the claim. The district court reasoned that the preference to Navajo tribal members was within the Title VII exemption for an "Indian" preference. The Ninth Circuit reversed.

According to the Court of Appeals, the purpose of the Title VII exemption was to compensate for the effects of past and present unjust treatment, not to authorize another form of discrimination against particular groups of Indians. 7 The Court stated that discrimination on the basis of tribal membership constitutes "national origin" discrimination prohibited by Title VII. 8 While Title VII does not define "national origin," the Ninth Circuit observed that both the legislative history of the Civil Rights Act and the U.S. Supreme Court "recognize that 'national origin' includes the country or place of one's ancestors." 9 The court then concluded that a discrimination claim arises when "discriminatory practices are based on the place in which one's ancestors lived and that discrimination against Hopis in favor of Navajo tribal members constitutes national origin discrimination under Title VII." 10 The Ninth Circuit gave deference to the EEOC's 1988 policy statement concerning the proper scope of the allowable preference, and the court's conclusion...

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