NLRB Jurisdiction over Indian Reservation Casinos Upheld

The United States Court of Appeals for the District of Columbia Circuit has upheld the National Labor Relations Board’s (NLRB) assertion of jurisdiction over a casino on an Indian reservation in San Manuel Bingo and Casino v. NLRB. In the underlying NLRB unfair labor practice proceeding arising out of the organizing activity of two competing unions vying for the representation rights for the casino’s employees, the NLRB departed from its previous analysis of jurisdictional issues concerning Indian reservations. The Board concluded that the language of the NLRA applies to tribal governments, and that there was nothing in the National Labor Relations Act’s legislative history to indicate an exemption for tribal governments. Then the NLRB concluded that nothing in federal Indian policy prevented application of the NLRA to the commercial activities of tribal governments. Having cleared the field of all potential obstacles to asserting jurisdiction, the NLRB next decided to exercise its discretion and assert jurisdiction, because the casino operation was neither a traditional tribal nor governmental function, but rather, “a typical commercial enterprise” that both employed non-Indians and catered to non-Indian customers who did not live on the reservation. On review in the Court of Appeals, the D.C. Circuit first considered whether applying the NLRA to the Indian reservation casino would violate federal Indian law. It looked at this issue de novo, without deferring to the NLRB, because these issues were outside the sphere of the NLRB’s expertise and delegated authority. In so doing, the court concluded, first, that the operation of a casino is not a traditional self-governmental function; second, that the substantial majority of the casino’s employees and customers were not members of the tribe and did not live on the reservation; and third, that the NLRB’s exercise of jurisdiction over the casino would not impair tribal sovereignty, and, therefore, would not run afoul of federal Indian law. The court next considered the NLRB’s interpretation of “employer” under the NLRA. It deferred to the Board’s expertise and found the Board’s interpretation a “permissible construction” under the Chevron standard.

Accordingly, the principal facts—that the casino was a purely commercial enterprise employing mostly non-Indians who were also predominantly serving non-Indian customers who did not live on the reservation—made assertion of NLRB jurisdiction over the Indian reservation casino appropriate.