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Monday, June 22, 2009

Ninth Circuit Holds that Tribal Business on Tribal Land is Subject to FLSA

In Solis v. Matheson (full text here) the Ninth Circuit held that the Fair Labor Standards Act (FLSA) applies to a Native American-owned business on Native American land, and the Department of Labor can enter Native American land to audit such a business. I don't suppose that this is going to affect a whole lot of people, but I find it fascinating. I quote at length, omitting citations:
Paul Matheson is a member of the Puyallup Tribe. The Puyallup Tribe is a Pacific Northwest Indian tribe that has a reservation in the State of Washington. Paul Matheson owns and operates a retail store known as Baby Zack’s Smoke Shop “Baby Zack’s”), located on trust land within the Puyallup Indian Reservation. Baby Zack’s sells tobacco products and sundries to Indians and non-Indians. Some of the goods sold by Baby Zack’s have been shipped in from locations outside the State of Washington. Baby Zack’s accepts credit card and debit card payments and uses electronic or telephonic means of communication to banks and credit card companies located outside of the State of Washington. Baby Zack’s regularly employs both Indian and non-Indian workers.
The Puyallup Tribe entered into a treaty in the 1850s known as the Treaty of Medicine Creek. The Treaty of Medicine Creek provides that the “tribes and bands agree to free all slaves now held by them, and not to purchase or acquire others hereafter.” The Treaty of Medicine Creek also provides that certain lands are for “exclusive use” of the Indians, “nor shall any white man be permitted to reside upon the same without permission of the tribe and the superintendent or agent.

Indian tribes have a special status as sovereigns with limited powers. Indian tribes are dependent on, and subordinate to the federal government, yet retain powers of selfgovernment. However, those powers may be limited, modified, or eliminated by Congress.

The tribes’ retained sovereignty reaches only that power needed to control internal relations, preserve their own unique customs and social order, and prescribe and enforce rules of conduct for their own members. Toward this end, the Supreme Court has recognized that a tribe may regulate any internal conduct which threatens the political integrity, the economic security, or the health or welfare of the tribe.

Indians and their tribes are equally subject to statutes of general applicability, just as any other United States citizen. However, a statute of general applicability that is silent on the issue of applicability to Indian tribes, like the FLSA, does not apply to Indian tribes if: (1) the law touches exclusive rights of selfgovernance in purely intramural matters; (2) the application of the law to the tribe would abrogate rights guaranteed by Indian treaties; or (3) there is proof by legislative history or some other means that Congress intended the law not to apply to Indians on their reservations. In any of these three situations, Congress must expressly apply a statute to Indians before we will hold that it reaches them.

The Ninth Circuit held: (1) FLSA does not touch exclusive rights of selfgovernance in purely intramural matters (in part because the Puyallup Tribe had not enacted its own wage and hour laws); (2) the 1850 Treaty of Medicine Creek, by which the Puyallup Tribe agreed to free all slaves, does not address employment rights and the payment of overtime compensation; (3) the Puyallup Tribe's right to exclude non-Native Americans from their land does not prevent the Department of Labor from entering the reservation to investigate FLSA violations.

I have mixed feelings about this decision. Far be it from me to argue against extending minimum wage protections to any employee, but there's a part of me that believes that decisions like this one render Native American "sovereignty" illusory.

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