Selling Ice in Alaska: Employment Preferences and Statutory Exemptions for Alaska Native Corporations 40 Years After Ancsa

• Jurisdiction: United States,Federal
• Publication year: 2014
• Citation: Vol. 31

§ 31 Alaska L. Rev. 1. SELLING ICE IN ALASKA: EMPLOYMENT PREFERENCES AND STATUTORY EXEMPTIONS FOR ALASKA NATIVE CORPORATIONS 40 YEARS AFTER ANCSA

Alaska Law Review
Volume 31, No. 1, June 2014
Cited: 31 Alaska L. Rev. 1

SELLING ICE IN ALASKA: EMPLOYMENT PREFERENCES AND STATUTORY EXEMPTIONS FOR ALASKA NATIVE CORPORATIONS 40 YEARS AFTER ANCSA

Gregory S. Fisher and Erin "Faith" Rose ^{[*] [**]}

ABSTRACT

In 1971, Congress enacted the Alaska Native Claims Settlement Act (ANCSA) in order to settle land disputes between Alaska Natives and the federal government. ANCSA established Alaska Native Corporations (ANCs), which were tasked with managing settlement funds to provide for the health, education, and economic welfare of Alaska Natives. To enable the ANCs to promote the interests of their shareholders, Congress exempted ANCs from certain employment restrictions contained in Title VII of the Civil Rights Act, but did not exempt ANCs from other worker-protective legislation. In subsequent decades, courts reviewing the preferential practices of ANCs have often construed these statutory exemptions narrowly, thus exposing ANCs to liability under various anti-discrimination statutes. This Article argues that Congress never intended to subject ANCs to these pieces of worker-protective legislation, despite court holdings to the contrary. The Article proposes two possible solutions to this discrepancy: (1) congressional amendment of ANCSA to clarify and further limit the extent of ANC liability; and (2) judicial adoption of a two-part test which would consider employment policies giving preference to Alaska Native shareholders in light of Congress's intent to protect such preferences.

INTRODUCTION

Forty-five years after President Richard Nixon signed the Alaska Native Claims Settlement Act (ANCSA) ^[1] into law, Alaska Native Corporations (ANCs) dominate the state economy ^[2] and are an economic force both nationally and globally. ^[3] According to Alaska Business Monthly, ANCs made up eight of the top ten Alaskan-owned and operated companies in the state, based on 2012 gross revenues. ^[4] Arctic Slope Regional Corporation has topped the chart for approximately twenty years, with gross revenues of more than $2.62 billion in 2012. ^[5] Bristol Bay Native Corporation was second with gross revenues of $1.96 billion, NANA Regional Corporation was third with gross revenues of $1.8 billion, and Chenega Corporation was fourth with gross revenues of $1.1 billion. ^[6] ANCs represented around forty-five percent of all Alaskan-owned and operated entities included in Alaska Business Monthly, and they collectively reported $11.8 billion in 2012 gross revenues-around seventy-four percent of all gross revenues reported. ^[7] In 2012, ANCs provided more than 59,546 jobs globally-more than 17,105 in Alaska- comprising eighty-four percent of total jobs reported by the top forty-nine Alaskan-owned businesses. ^[8] The jobs provided by ANCs represented sixty-six percent of those employed in Alaska in the private sector. ^[9]

Despite such overwhelming success, the ANCs also face a difficult challenge: sustaining jobs and economic development for the next generation of Native shareholders in a post-downturn economy while confronting a political environment as harsh as the Arctic. Congress intended that ANCs be afforded latitude and flexibility in their hiring-and employment-related decisions, allowing them to develop policies that promote the economic development and welfare of their shareholders. In the intervening decades, however, the law developed in unexpected ways and its application has sometimes caused unintended consequences. This Article explores the history and future of employment preferences and statutory exemptions for ANCs. We argue that Congress and the courts should protect and extend the ability of ANCs to adopt employment preferences that are consistent with, and advance, Congressional goals of promoting Alaska Native economic growth and stability.

I. BACKGROUND: HOW ANCS ARE SIMILAR TO, YET DIFFERENT FROM, INDIAN TRIBES

Congress's creation of ANCs represented a radical departure from the historic way in which the federal government had dealt with the indigenous peoples inhabiting what became the United States. At the inception of this nation, the U.S. Constitution granted power to Congress to regulate commerce with the Indian Tribes. ^[10] Two-hundred years later, Indian Tribes are now viewed legally as "domestic dependent nations," a label reflecting the troubled history of misinterpreted treaties, ^[11] land disputes, ^[12] and cultural conflict ^[13] that culminated in the Indian reservation system. The reservation system dominates national Indian policy in the forty-eight contiguous states. ^[14]

A. The Tribal Reservation System in the Lower Forty-Eight States

Indian reservations are the result of early peace treaties in which Indian Tribes surrendered large portions of their land to the U.S. government in return for guarantees that other parcels of land would be "reserved" for the exclusive use of the Tribe as a sovereign nation. ^[15] Eventually, the U.S. government began to forcibly relocate Tribes to parcels of land to which they had no historical connection. ^[16] Forced relocation led to tragedies such as the Trail of Tears, in which five nations-the Cherokee, Muscogee (Creek), Seminole, Chickasaw and Choctaw-were marched from various parts of the southeastern United States to "Indian Territory." ^[17] An estimated four thousand of the seventeen thousand Cherokee on the march died from exposure, disease, and starvation en route. ^[18] In 1851, Congress authorized the creation of Indian reservations in what was to become modern Oklahoma. ^[19] Later reservations were established by executive order, and eventually came to be regulated by the Bureau of Indian Affairs (BIA). ^[20]

During the period from the mid-1850s through the end of World War II, Congressional efforts to regulate the nation's relationship with Indian Tribes flip-flopped between the polar-opposite goals of assimilation and autonomy. Indian assimilation laws mandated absorbing Indian Tribes into the great "melting pot" of America's ethnically diverse population, so that Native Americans would cease to exist as separately identifiable peoples. ^[21] Indian autonomy laws, on the other hand, acknowledged cultural differences and granted quasi-sovereign powers to the Indian Tribes, including the rights to form tribal governments and tribal courts, to self-govern tribal members, and to collectively control the disposition of tribal lands. These laws also granted the power to form Tribal corporations, when approved by the Bureau of Indian Affairs, and to engage in commercial enterprises on the open market. ^[22] But despite Congressional efforts, by the late 1950s the reservation system was acknowledged as a failure. ^[23] The system had succeeded only in creating an endless cycle of Indian poverty and economic dependence on the federal government. ^[24]

B. Alaska Natives: A Different History

Unlike the Tribes of the lower forty-eight states, most Alaska Natives were not conquered by the United States in war, nor were they forced onto federal reservations. Alaska was purchased from Russia by the federal government in 1867 through a Treaty of Cession ratified by the Senate. ^[25] The federal government had no formal treaty relationship with the indigenous people of Alaska, however, and gained from Russia only the rights of conquest that Russia had obtained during its own dominion over the Alaska Territory-which, significantly, did not include the conquest of the "Uncivilized Tribes." ^[26] Therefore, these Tribes did not automatically become citizens of the United States upon ratification of the treaty but were, instead, subject to future laws the United States would adopt. ^[27] Aboriginal land titles were not an important issue for the United States for nearly one hundred years. Even when Alaska was admitted as the forty-ninth state on January 3, 1959, ^[28] the status of aboriginal land title was left unaddressed. ^[29]

C. Impact of Statehood and the Discovery of Oil at Prudhoe Bay

In 1968, when the Atlantic-Richfield Company discovered oil at Prudhoe Bay on the Arctic coast of Alaska, the issue of Alaska Native land entitlements caught fire and grew into a political conflict that threatened to engulf the new state. ^[30] With a national energy crisis looming, car owners would soon be lined up at the pump, waiting to buy the seemingly dwindling national supply of gasoline. ^[31] Soaring international oil prices sparked new interest in domestic oil and gas exploration. ^[32] In a single day, the newly formed State of Alaska sold nearly $1 billion in oil leases. ^[33] The federal government was actively issuing valuable oil and mineral exploration permits in the Arctic to other private corporations-despite protests by Alaska Natives. ^[34]

Alaska Natives saw their hunting and fishing lands, essential to sustain their traditional subsistence way of life, ^[35] snatched up by outsiders. Fear and outrage motivated Alaska Natives to swiftly organize themselves into groups and associations to fight the taking, selling and leasing of their lands by the state and federal governments. ^[36] Alaska Native protests quickly grew so fierce that by early 1969, the Secretary of the Interior instituted a "land freeze" where the federal process of approving state land selections and all other...