Drummond Woodsum Attorneys at Law

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November 13, 2012

Under Navajo law, employers doing business on the Navajo reservation must give employment preferences to Navajo tribal members before others. This makes perfect sense: economic opportunities within the jurisdiction of the Navajo Nation should go first to Navajo citizens before non-citizens. No doubt, the Navajo Nation has sovereign authority to enact and enforce such a law within its jurisdiction.

The U.S. Equal Employment Opportunity Commission is of the view that employers (other than the Navajo Nation and its enterprises) who comply with this law and hire Navajo citizens over equally qualified citizens of other Indian nations commit a form of employment discrimination known as "national origin discrimination." To prove its point, the EEOC has been fighting a case against one company operating on the Navajo reservation, Peabody Western Coal Company, for over a decade.

In EEOC v. Peabody Western Coal Company, the EEOC wants a federal court to force Peabody Coal to hire two non-Navajo Indians who were passed over for positions in favor of Navajo citizens. Peabody Coal is simply complying with Navajo law, but it faces a federal court action for national origin discrimination.

The nub of the problem is this: when Congress passed Title VII of the sweeping Civil Rights Act of 1964 to prohibit workplace employment discrimination on the basis of race, gender, religion, national origin and other protected classifications, it decided to exempt certain hiring preferences given to "Indians." Here's the language of the exemption:

Nothing contained in this subchapter [prohibiting employment discrimination] shall apply to any business or enterprise on or near an Indian reservation with respect to any publically 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.

The EEOC, which is the federal agency charged with interpreting this law, holds that the exemption works if an employer gives preferential treatment to Indians over others, but not if an employer gives preferential treatment to the members of one tribe over the members of any other tribe.

In mid-October, the federal court in Arizona issued its most recent decision in this drawn out saga. It held that because the Department of the Interior approved, and can enforce, Peabody Coal's lease with the Navajo Nation, and the lease requires the company to comply with the Navajo hiring preference law, the act of giving employment preference to Navajo citizens over the citizens of other tribes "is not unlawful national origin discrimination but a political classification and thus not within the scope of Title VII."

Apparently in the absence of DOI's oversight and approval of the lease provision, Peabody Coal would be liable to the non-Navajo Indian job applicants for national origin discrimination. That's what the Ninth Circuit Court of Appeals suggested in a separate case, Dawavendewa v. Salt River Project Agric. Improvement & Power Dist., 154 F.3d 1117 (1998). A moment's reflection should leave us all scratching our heads. Why would federal oversight of the lease requiring compliance with the Navajo employment preference cause the preference to be a "political classification," while the sovereign decision of the Navajo Nation to enact and enforce such a law, alone, would not?

Something has to change. By prosecuting "national origin discrimination" cases against businesses that follow the laws of sovereign Indian nations designed to ensure that employment opportunities go first to their tribal citizens, the EEOC is thwarting tribal sovereignty. The EEOC would do well to refrain from interfering in such matters. In the meantime, Congress should amend Title VII's exemption to clarify that employment preferences given to tribal members within an Indian reservation in accordance with tribal law do not constitute unlawful employment discrimination.

These issues are explored in Labor and Employment Law in Indian Country, jointly published by the Native American Rights Fund and Drummond Woodsum.

To read the federal court's most recent decision in EEOC v. Peabody Western Coal Company, click here.

Related Professional

  • Kaighn Smith

  • Related Practice Areas

  • Tribal Nations Practice Group

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