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Legal Clinic

Time Off Prior to Layoffs?

The Legal Clinic this month explores whether the WARN Act requires employers to provide time off for interviewing prior to the actual layoffs and whether federal laws and regulations apply to Indian-owned casinos or other businesses.

Monday, August 9, 2010
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Question: Once employees are notified they will be laid off in 60 days, is the employer required to or responsible for providing time off for interviews?

Answer: No -- Absent any agreement to the contrary, employees are not required or responsible for providing employees with time to interview for new positions when they are going to be laid off. The Worker Adjustment and Retraining Notification Act generally governs an employer's obligations and responsibilities for engaging in mass layoffs and plant closings.

Although the WARN Act requires covered employers to give certain workers 60 days' advanced written notice of a plant closing or mass layoff, the Act is void of any provision that requires employers to also provide affected employees with time off for interviews. 

Generally, the WARN Act requires employers to provide 60 days' written notice of: (i) the intention to lay off more than 50 employees during any 30-day period as part of a plant closing; or (ii) any mass layoff, that does not result from a plant closing, but will result in an employment loss of 500 or more employees or 33 percent of the workforce during any 30-day period. 29 U.S.C. § 2101 et seq.

Employers are covered under the Act if they employ at least 100 employees who have worked at least six months or more in the last twelve months and work an average of 20 hours or more a week. Id. at § 2101(a)(8). For a thorough review of the WARN Act, please see my earlier posting on April 20, 2009 entitled The Law is Not Enough.

 

Several states have also enacted their own mini WARN Acts to supplement the provisions of the federal statute, providing at times an even broader range of employee protections. These states include, but are not limited to, California, Hawaii, Iowa, Illinois and New York. See, e.g., CAL. LAB. CODE § 1400 et seq. (applies to layoffs involving 50 employees in facilities with 75 or more employees); HAW. REV. STAT. § 394B et seq. (applies to employers with 50 or more employees); IOWA CODE § 84C.1 et seq. (applies to companies with 25 or more employees); 820 ILL. COMP. STAT. § 65/1 et seq. (applies to employers with 75 or more employees); N.Y. LAB. LAW § 598 et seq. (applies to employers with 50 or more full-time employees and requires at least 90 days' advance written notice to affected employees).

The advance notice of termination required under the various WARN Acts is intended to give workers and their families a transition period to adjust to the prospect of losing their jobs, to seek and obtain employment, and to pursue training and other programs, as necessary, to enable them to compete in the current job market.

Although one of the purposes of the Act and its state counterparts is to allow affected employees time to find new employment, there is, however, no federal or state mandate requiring employers to give employees time off to seek other business opportunities during this notice period.

Question: Does the Americans with Disability Act apply to an Indian casino? Are there any other federal laws or regulations that do or do not apply to Indian casinos?

Answer: The applicability of the Americans with Disabilities Act to Indian tribes that own and operate casinos will likely vary by ADA title. While Indian tribes are excluded from liability under Title I and most likely Title II of the ADA, an Indian tribe's obligations under Title III are uncertain.

Similarly, Indian tribes are generally not subject to the provisions of federal laws, such as Title VII of the Civil Rights Act of 1964 and the WARN Act, however, the applicability of other federal statutes remains unclear due to disagreement among the circuits. 

It is important to discuss the concept of sovereign immunity when addressing the applicability of federal statutes to Indian tribes or entities because whether an Indian tribe is subject to a statute and whether the tribe may be sued for violating the statute are two entirely different questions. Fla. Paraplegic Ass'n v. Miccosukee Tribe of Indians of Fla., 166 F.3d 1126, 1130 (11th Cir. 1999).

Generally speaking, the doctrine of sovereign immunity precludes the institution of a lawsuit against a government without its consent. Therefore, even if a statute is held to apply to a sovereign government, state and federal courts do not have jurisdiction to hear private lawsuits brought against it without the sovereign's express or implied waiver of immunity.

Indian tribes are recognized under federal law as having sovereign authority to govern themselves and, therefore, can invoke the doctrine of sovereign immunity to avoid civil liability.

It is important to note that several courts treat Indian tribes and their business entities as one for purposes of sovereign immunity when the business is wholly owned and operated by the tribe such that the entity acts as the arm of the tribal government. See, e.g., Allen v. Gold Country Casino, 464 F.3d 1044, 1046 (9th Cir. 2006) (holding that casino was entitled to tribal sovereign immunity as an arm of the tribe); Setchell v. Little Six, Inc., No. C4-95-2208, 1996 WL 162560, at *2 (Minn. Ct. App. Apr. 9, 1996) ("If it is doubtful that 'Indian tribes' in the ADA means tribally owned corporations, a construction in favor of [the tribe] should be adopted."); Wardle v. Ute Indian Tribe, 623 F.2d 670, 672 (10th Cir. 1980) ("Indian tribes and businesses operating on or near Indian reservations are excluded from the employment discrimination prohibitions of Title VII").

Indian Casinos and the ADA

The applicability of the ADA to Indian-owned casinos will likely vary by ADA title. See 42 U.S.C. § 12101 et seq. Title I of the ADA, which seeks to prevent the discrimination of disabled workers in employment, does not apply to tribal government employers because Indian tribes are expressly excluded from the definition of employer under the ADA. 42 U.S.C. §§ 12111(5)(B)(i), 12112(a); see, e.g., Charland v. Little Six, Inc., 198 F.3d 249 (8th Cir. 1999) (holding a former employee of tribe-owned casino had no private remedy under the ADA for alleged disability discrimination because of tribal exemption).

Title II, which regulates state and local governments, neither mentions nor excludes Indian tribes from the definition of public entities covered under its provisions. 42 U.S.C. § 12131(1). However, it is unlikely that Title II would apply to a tribal government since Title II clearly defines its applicability to programs, services, and activities run by state and local governments. Id.

While Indian casinos are not likely to be subjected to the provisions of either Title I or Title II of the ADA, the implications of Title III are less clear. Title III of the ADA requires places of public accommodation to be accessible to individuals with disabilities. Id. at 42 U.S.C. §§ 12181-12189. Like Title II of the ADA, Title III is silent on whether or not tribes are covered under its provisions. However, at least one circuit has held that Title III can apply to public accommodations run by Indian tribes. See Fla. Paraplegic Ass'n, 166 F.3d 1126.

In the Miccosukee case, the plaintiffs alleged that a restaurant and entertainment facility owned and operated by the Miccosukee tribe failed to meet the ADA's requirement that places of public accommodation be accessible to the disabled. Id. at 1127. The 11th Circuit held that the ADA is a statute of general application that applies to Indian tribes unless its application would: (i) abrogate rights guaranteed under a treaty; (ii) interfere with an Indian tribe's right of self-government; or (iii) contradict Congress' intent. Id. at 1129; see also Donovan v. Coeur d'Alene Tribal Farm, 751 F.2d 1113, 1115-16 (9th Cir. 1985).

Since there was no treaty in existence and no indication that Congress expressed intent that the ADA not apply to Indian tribes, the Court had to look to whether Title III interfered with the Tribe's rights of self-governance in truly purely intramural matters (i.e. matters that affect only the Tribe itself) to determine whether it applied to the Tribe-run restaurant and entertainment facility. Id.

In analyzing the facts of the case, the Court determined that because the tribe-run restaurant and entertainment facility was open to non-Indians and affected interstate commerce, it was not exclusively within the domain of the Tribe and its members, and therefore, it did not fall under the self-government exception to the applicability of the ADA. Id.; cf. EEOC v. Cherokee Nation, 871 F.2d 937, 938 (10th Cir. 1989) ("ADEA is not applicable because its enforcement would directly interfere with the Cherokee Nation's treaty-protected right of self-government").

 

Ironically, although the court concluded that Title III of the ADA governs Indian tribes, the court nevertheless held that tribes can still assert their sovereign immunity to avoid private lawsuits because Congress did not express an intention to waive tribal sovereign immunity anywhere in the ADA. Fla. Paraplegic Ass'n, at 1131-32.

If, however, there is a pattern of discrimination or the discrimination raises an issue of general public importance, Title III allows the Attorney General to bring a civil lawsuit to compel a tribe's compliance with the statute via court injunction. 42 U.S.C. § 12188(b)(1)(B). Therefore, although a private right of action may not exist against tribal employers, Title III can still be enforced against tribes through legal action by the Attorney General of the United States.

Overall, compliance with Title I and Title II of the ADA should not pose great cause for concern for Indian-owned casinos because they are expressly or implicitly exempt from their definitions of covered employees. While the applicability of Title III is a little more complex, Indian casinos should strongly consider complying with Title III or risk facing various penalties that can be brought by the United States. See 42 U.S.C. § 12188(b)(2) (listing various penalties that can be enforced by the courts).

Indian Casinos and other Federal Laws/Regulations

The applicability of other federal laws to tribal casinos remains generally unclear. While statues like Title VII of the Civil Rights Act of 1964 (Title VII) and the WARN Act explicitly exempt Indian tribes from the mandates of their provisions, the applicability of other federal employment laws such as the Age Discrimination in Employment Act, the Fair Labor and Standards Act, the Family and Medical Leave Act and the Occupational Safety and Health Act vary amongst the federal circuits. See 42 U.S.C. § 2000e et seq, (Title VII); 29 U.S.C. § 2101 et seq. (WARN); 29 U.S.C. § 621 et seq. (ADEA); 29 U.S.C. § 201 et seq. (FLSA); 29 U.S.C. § 2601 et seq. (FMLA); 29 U.S.C. § 651 et seq. (OSHA).

Title VII: Title VII prohibits covered employers from basing employment decisions on factors such as race, sex (including pregnancy), religion or national origin. 29 U.S.C. § 2000e et seq. Title VII applies to private employers as well as federal, state, and local governments Id. at § 2000e(b). However, as previously mentioned, Title VII explicitly excludes Indian tribes from its definition of covered employers. Id.; see also Morton v. Mancari, 417 U.S. 535, 547-48 (1974); Tenney v. Iowa Tribe of Kan., 243 F. Supp. 2d 1196 (D. Kan. 2003) (Nebraska Gaming Commission that operated a casino with the Iowa tribe of Kansas and was comprised of tribal members was exempt under Title VII). But see Hines v. Grand Casinos of La., LLC, 140 F. Supp. 2d 701 (W.D. La. 2001) (holding that an Indian gaming casino was not exempt under Title VII because the casino was operated and managed by an independent contractor which possessed sole and exclusive responsibility for managing and operating the casino), aff'd with op., 31 F. App'x 832 (5th Cir. 2002).

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WARN Act: Under the WARN Act, covered employers are required to give certain workers 60 days' advanced written notice of a plant closing or mass layoff. 29 U.S.C. § 2101 et seq. The WARN Act statute itself is silent as to its applicability to Indian tribes, however, the regulations promulgated by the U.S. Department of Labor interpreting the Act expressly excludes "Indian tribal governments." 20 C.F.R. § 639.3(a)(1)(ii). 

ADEA: The ADEA prohibits discrimination in hiring, firing, compensation, assignment and promotion against persons who are age 40 and over. 29 U.S.C. § 623, 631. However, the language of the ADEA neither expressly includes nor excludes Indian tribes from coverage. See id. at § 623. The circuits that have addressed this issue have generally held that Indian tribes are not covered under the ADEA, however, at least one court has suggested that a tribal exemption does not apply.

See Cherokee Nation, 871 F.2d at 939 (holding that the ADEA did not apply to the Cherokee tribe because its enforcement would interfere with tribe's right of self-government); EEOC v. Fond du Lac Heavy Equip. & Constr. Co., 986 F.2d 246, 249-51 (8th Cir. 1993) (holding that the ADEA did not apply to an action against a tribal employer brought by a member of the tribe); EEOC v. Karuk Tribal Housing Auth., 260 F.3d 1071, 1076 (9th Cir. 2001). (declining to apply the ADEA to a tribe's housing authority). But see Cano v. Cocopah Casino, No. CV-06-2120, 2007 WL 2164555, at *4 (D. Ariz. Jul. 25, 2007) (holding that the ADEA may apply to a tribal owned and operated casino, that was open to the public and employed non-tribal members)

FLSA: The FLSA imposes upon employers statutory requirements with respect to minimum wage to be paid to workers, overtime, and regulating child labor. 29 U.S.C. § 202. Employers subject to the FLSA are prohibited from: (i) paying their workers at a lower rate than the statutorily prescribed minimum, (ii) instituting a work week in excess of forty hours unless employees are compensated at one-and-a-half times their regular wage; and (iii) exploiting child labor. 29 U.S.C. § 206(a). 

The FLSA makes no mention of its applicability to Indian tribes and very few circuits have addressed this issue. A recent decision by the Ninth Circuit has provided employers with some guidance. In Solis v. Matheson, the Ninth Circuit held that the FLSA's overtime provisions applied to a tribal-owned retail store located within the boundaries of the tribe's reservation. 563 F.3d 425 (9th Cir. 2009).

The court concluded that because the FLSA was a statue of general application and was silent as to its applicability to Indian tribes, the FLSA applied to tribes unless its application fell into one of three exemptions articulated in Donovan v. Coeur d'Alene Tribal FarmSee Solis, at 430; Donovan, 751 F.2d at 1115-16.

Therefore, in order for the tribe to be exempt, application of the FLSA needed to either: (i) abrogate rights guaranteed under a treaty; (ii) interfere with an Indian tribe's right of self-government; or (iii) contradict Congress' intent. Id. The Ninth Circuit held that none of these exemptions applied because the tribe had not enacted its own wage and hour laws subject to a treaty and the tribal business was not engaged in intramural affairs (the retail store was a "purely commercial enterprise engaged in interstate commerce selling out-of-state goods to non-Indians and employing non-Indians"). Id. at 434.

FMLA: In general, the FMLA requires employers who employ 50 or more employees to provide up to 12 weeks' unpaid family and medical leave a year to eligible employees. 29 U.S.C. § 2601 et seq. Both male and female employees are entitled to leave: (i) for the birth or adoption, of a child (ii) to care for a seriously ill child, spouse or parent; (iii) to care for a service member who is the spouse, child, parent or next of kin of the employee; or (iv) for the employee's own serious illness. Id. § 2612(a). Eligible employees who take leave pursuant to the FMLA are provided with adequate protection of their employment and health benefit rights while on leave. Id.

To date, there is no clear decision on the applicability of the FMLA to Indian tribes. Although the statute is silent as to whether tribes are exempt from complying with its provisions, at least once circuit has held that Indian tribes enjoy sovereign immunity protecting them from suit for damages under the FMLA. See Chayoon v. Chao, 355 F.3d 141 (2d Cir. 2004) (holding a casino employee could not bring a FMLA suit for damages against his tribal employer, nor against officers or employees of tribe acting in their official or representative capacities).

However, as mentioned earlier, whether an Indian tribe is subject to a statute and whether the tribe may be sued for violating the statute are two entirely different issues. Therefore, the implications of the FMLA on Indian tribes and entities still remain unclear.

In sum, absent any explicit language excluding Indian tribes from the provisions of a federal statute, courts, generally have construed the tribal exemption narrowly and found tribal organizations liable under generally applicable statutes, like the FLSA, unless liability would impinge upon the tribe's self-governance.

Accordingly, tribal employers of casino workers and other tribal employees engaged in commercial activities would be best able avoid potential liability (or the cost of litigation) if they comply with all federal employment laws that do not specifically exempt tribal employees, such as the Title VII exemption or Title I exemption of the ADA. 

Keisha-Ann G. Gray is senior counsel in the Labor & Employment Law Department of Proskauer in New York and co-chair of the Department's Employment Litigation and Arbitration Practice Group.

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