ANALYSIS: High stakes for tribal casinos in court fight over labor rights

MOUNT PLEASANT, MI, Sept 15 (Reuters) - After the Saginaw Chippewa fired a housekeeper at the Soaring Eagle casino in 2010, the Michigan tribe found itself at the center of a national legal battle over the reach of U.S. labor law and the sovereig...

MOUNT PLEASANT, MI, Sept 15 (Reuters) - After the Saginaw Chippewa fired a housekeeper at the Soaring Eagle casino in 2010, the Michigan tribe found itself at the center of a national legal battle over the reach of U.S. labor law and the sovereign rights of Native American tribes.

The housekeeper, Susan Lewis, was fired for soliciting union support among workers at the casino in central Michigan. She challenged her dismissal before the U.S. National Labor Relations Board, which ordered the casino to reinstate Lewis.

The Saginaw Chippewa refused, saying the NLRB, which oversees union elections and referees private-sector labor relations disputes, had no right to meddle in tribal business.

Four years later the tribe is fighting the NLRB in one of three nearly identical court cases whose outcomes could be felt throughout the $28 billion tribal casino industry.

At issue are two long-held legal principles. One is the right of private-sector workers to band together and pursue union representation, as embodied in the 1930s National Labor Relations Act (NLRA), which the NLRB oversees.


The other is tribal sovereignty, which has been affirmed by Supreme Court decisions going back to the 1820s.

If the Saginaw Chippewa can convince a court that the NLRB has no jurisdiction over their casino, unions would be unable to organize workers there, leaving the casino to carry on with its present business model.

But if the NLRB gets its way and unions move in, potentially raising the Soaring Eagle's operating costs and eroding its profits, "the impact on the tribe and its governmental services would be, in a word, devastating," said the tribe in a brief filed with the 6th U.S. Circuit Court of Appeals in Cincinnati.

The casino is "critical to the political integrity of the tribe," the brief said. The tribe, which does not tax its members, receives 90 percent of its income from the casino.

Like most of the Soaring Eagle's 3,000 workers, Lewis is not Native American. After her firing, she moved on to a manufacturing job in a nearby town.

"I just wanted our voice to be heard," she said in an interview. "My old co-workers, they're still afraid to talk to a union."

Native American casinos are big business. In 2013, 235 of roughly 550 federally recognized indigenous tribes ran gaming facilities, collectively generating more than $28 billion in revenue, according to the National Indian Gaming Commission.

Tribal-owned facilities accounted for about 43 percent of all U.S. casino gaming revenue in 2012, according to Alan Meister, an economist with consultancy Nathan Associates Inc.


He said 12 tribes operate 21 gaming facilities in Michigan, with collective revenue of $1.5 billion in 2012.

The federal appeals court cases are testing a 2004 NLRB decision in which, for the first time, the board asserted its jurisdiction over an on-reservation tribal casino. The question before the courts is whether that assertion was proper or whether it ran afoul of tribal sovereignty statutes.

One federal appeals court, in Washington, D.C., has already sided with the NLRB, in a 2007 decision involving a Native American casino in California. The Saginaw Chippewa, along with the Chickasaw Nation in Oklahoma and the Little River Band of Ottawa Indians, also in Michigan, hope another federal appeals court elsewhere will side with them. If the courts split, the issue will likely go to the Supreme Court.

It is unknown when the cases, which are on hold for procedural reasons, will be argued before the appeals courts.

Mount Pleasant is a college town of 26,000, home to Central Michigan University. In the mid-1800s, the U.S. government relocated the Saginaw Chippewa, Swan Creek and Black River bands of the Ojibwa Native Americans there. White settlers came for the timber.

Since its grand opening in 1998, the Soaring Eagle in busy years has drawn more than 20,000 visitors and generated revenue of more than $250 million. It is the city's largest employer and parcels out millions of dollars a year to local schools and governments under a state agreement.

Its profits have allowed the Saginaw Chippewa to pave their reservation's dirt roads, build a cultural center and break ground on a tribal college.

Tribe spokesman and member Frank Cloutier recalled times in the 1980s when tribe members would phone local police, but no officer would come to the scene. Now the tribe has its own police and fire departments. "Our reality has changed, our quality of life has completely changed," he said.


The tribe has argued that allowing the NLRB to establish authority over the Soaring Eagle infringes on a treaty between the Saginaw Chippewa and the U.S. government. It is also improper because the NLRB has jurisdiction only over private-sector employers, not state, local or tribal governments, the tribe has said.

"But all of a sudden, the Native American community is being treated differently than any other government," Saginaw Chippewa attorney Sean Reed said.

Federal agencies and courts have struggled for decades to sort out which federal laws apply to Native American tribes and enterprises on their reservations.

For years the NLRB saw off-reservation businesses as subject to the NLRA and on-reservation businesses as exempt. That changed in 2004 when the agency said the NLRA applied to an on-reservation casino run by the San Manuel Band of Serrano Mission Indians in San Bernardino County, California.

The San Manuel decision created opportunities for organized labor in an otherwise challenging climate. Only 6.7 percent of U.S. private-sector workers belonged to a union in 2013. After the decision, a wave of unionization campaigns began at tribal casinos, including at the Soaring Eagle.

Lewis was a known union supporter who was fired in late 2010 without severance pay for violating the casino's no-solicitation policy. She challenged her firing via an internal process and then turned to the NLRB, with the UAW's help.

The NLRB heard her case and in April 2013 ordered the Soaring Eagle to reinstate her. But the Saginaw Chippewa refused, arguing that the NLRB lacked jurisdiction over the casino because it was not a private-sector employer, but part of a sovereign government.

The NLRB maintained that the casino had nothing to do with the tribe's government and was a purely economic enterprise that it could regulate.


Ed Morin, who worked with a local Teamsters union in an unsuccessful bid to organize the Soaring Eagle, said in an interview that fear of speaking up to casino managers was a common complaint cited by workers.

Workers complained of overly harsh disciplinary decisions, unfair hiring practices and said tribe members got more favorable treatment than non-tribal employees, he said.

Speaking of workers' experiences at the Soaring Eagle versus non-tribal casinos represented by the Teamsters in Detroit, Morin said, "Conditions as far as wages go were not that far out of line, but work conditions were out of line."

Saginaw Chippewa leaders said full-time jobs at the casino come with generous benefits packages. Workers who want to challenge employment decisions can request a hearing, bring witnesses and present evidence, the tribe said.

"It's a very fair process," Cloutier said.


By Amanda Becker

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