Let the Games Begin; NLRB asserts Jurisdiction in San Manuel Case

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Is 'new standard' an omen of expanded federal control?

In a ruling with potential impact across Indian country, the National Labor
Relations Board decided by a 3 -- 1 vote to assert jurisdiction in a labor
dispute involving a reservation-based tribally owned business.

"We establish a new standard for determining the circumstances under which
the board will assert jurisdiction over Indian owned and operated
enterprises," read the May 28 document, called a "Decision and Order."
Signing the majority opinion were Chairman Robert J. Battista and board
members Wilma B. Liebman and Dennis P. Walsh.

Jurisdictional issues will now be approached on a case-by-case basis, in
which NLRB will "examine the specific facts in each case to determine
whether the assertion of jurisdiction over Indian tribes will effectuate
the purposes of the [National Labor Relations] Act."

Previous NLRB rulings in jurisdictional matters had been largely governed
by the location of the enterprise -- off-reservation businesses were
subject to board authority while those on the rez were excluded. In the
decision, the majority said that almost 30 years of NLRB rulings have "been
inadequate in striking a satisfactory balance between the competing goals
of federal labor policy and the special status of Indian tribes in our
society and legal culture." With this ruling they seek "to adopt a new
approach that gives due recognition to those competing interests."

Throughout the decision, the majority reiterated its understanding that
"our common law and Federal statutes are suffused with examples of the
special status accorded Indian tribes." But at the same time, NLRB also
drew distinctions between the governmental functions performed by tribal
governments and the purely business or commercial operations run by those
same governments, asserting "the [San Manuel Band's] activities at issue
are commercial in nature -- not governmental."

"When Indian tribes participate in the national economy in commercial
enterprises, when they employ substantial numbers of non-Indians, and when
their businesses cater to non-Indian clients and customers, the tribes
affect interstate commerce in a significant way," the decision read. "When
the Indian tribes act in this manner, the special attributes of their
sovereignty are not implicated. Running a commercial business is not an
expression of sovereignty in the same way that running a tribal court
system is.

"The operation of a casino -- which employs significant numbers of
non-Indians and that caters to a non-Indian clientele -- can hardly be
described as 'vital' to the tribes' ability to govern themselves or as an
'essential attribute' of their sovereignty."

Of course, a significant difference between Indian tribal governments and
municipal and state governments concerns revenue sources. Non-Indian
governments generally rely on property and income taxes to finance
government services. Such revenue streams, however, are not available to
tribal governments, which instead depend largely upon commercial
enterprises for revenue.

Board member Peter C. Schaumber offered a dissent longer than the majority
decision in which he argued that such dependence upon business revenue
makes the operation of tribally owned commercial enterprises an essential
function of government.

"Operation of the casino clearly furthers the repeatedly expressed
Congressional objective of encouraging tribal self-sufficiency and economic
development, which can only occur through commercial activity," Schaumber
said.

Because tribal casino revenues are used to fund governmental programs,
Schaumber argued that such business operations are necessary and integral
components of a tribal government. "Operation of the casino on the tribe's
reservation is an 'internal matter' directly implicating 'rights of
self-governance,' and we should not ... assert jurisdiction in the absence
of a clear expression of Congressional intent," Shaumber concluded.

The case in question involves the San Manuel Band of Serrano Mission
Indians, whose bingo and casino operation is located on reservation land in
San Bernardino County. The complainant, the Hotel Employees & Restaurant
Employees International Union, alleges the band violated the National Labor
Relations Act by denying it access to employees for organizing purposes.
The band had moved for dismissal due to lack of jurisdiction. The decision
made no mention of the merits of the case itself.

NLRB is an independent federal agency created by Congress in 1935. It
administers the National Labor Relations Act, governing relations between
labor unions and private sector employers. The board's five members are
appointed by the President, with Senate approval, to staggered five-year
terms; one member's term expires each year.

Will NLRB's new "case-by-case" approach lead to further assertions of
jurisdiction into disputes involving Indian enterprises on reservation
land? At this point it is impossible to say for sure, as NLRB insists it
will "examine the specific facts in each case to determine whether the
assertion of jurisdiction over Indian tribes will effectuate the purpose of
the [National Labor Relations] Act."

But the board did observe that Indian commerce is growing and even gaining
national prominence.

"Tribal enterprises are playing an increasingly important role in the
[national] economy," the majority said. "As tribal businesses prosper, they
become significant employers of non-Indians and serious competitors with
non-Indian owned businesses."

Among NLRB's mandates is the protection of interstate commerce. As
reservation-based economies continue to grow and forge greater links with
non-Indian economic partners, it may be only a matter of time before NLRB
officials are more frequently involved in labor disputes they used to
avoid.