Title VII of the Civil Rights Act of 1964 allows employers on or near an Indian reservation to give preferential treatment to Indians living in the vicinity. But the Equal Employment Opportunity Commission (EEOC) has taken the position that this provision doesn’t permit preference for members of a particular tribe. In the continuing saga of a case that has dragged on for years, the 9th Circuit Court of Appeal (whose rulings apply to all Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington employers) recently issued its third decision, finally ruling against the EEOC. 
Coal company leases have Navajo hiring preference
Peabody Western Coal Company mines coal at locations on the Navajo and Hopi reservations in northeastern Arizona. The leases for these operations were agreed to by Peabody’s predecessor back in the 1960s. Under the Indian Mineral Leasing Act of 1938 (IMLA), the secretary of the interior must approve the terms of all such leases.
Under one of the leases, Peabody “agreed to hire Navajo Indians when available in all positions for which, in the judgment of [Peabody,] they are qualified.” Peabody also was to “make a special effort to work Navajo Indians into skilled, technical and other higher jobs in connection with [its] operations under this Lease.” A second lease had similar provisions but permitted Peabody at its option to extend the preference to Hopi Indians as well.
The EEOC, which originally filed suit against Peabody in 2001, conceded that these specific terms were imposed at the direction of the Department of the Interior. Nonetheless, it contended that the terms violate Title VII by providing a preference not for Indians in general but instead exclusively for Navajo (and potentially for Hopi) Indians. The tribal limitation, according to the EEOC, amounted to unlawful national origin discrimination against Indians from other tribes who lived in the vicinity of Peabody’s operations.
The 9th Circuit’s earlier rulings in the case—in 2005 and 2010—dealt with the question of whether all necessary parties had been brought into the lawsuit. The EEOC’s initial complaint was filed only against Peabody, which insisted that the Navajo Nation be added because rights of the Nation would be affected by the outcome of the action. The EEOC then filed an amended complaint that included the Nation. Eventually, the secretary of labor was also added as a party.
At last, the trial court could address the merits of the matter. The court dismissed the EEOC’s claims without a trial. According to the decision, the secretary of the interior’s approval of hiring preferences based on tribal membership amounted to a political determination by the federal government, not national origin discrimination. The EEOC appealed.
Preferences intended to meet special obligations to tribes
The 9th Circuit’s review focused on the federal government’s special trust obligation to the tribes as quasi-sovereign political entities. In that light, tribal preferences are based on political classification rather than national origin.
The specific preferences in the Peabody leases were authorized under the IMLA, which predated and wasn’t amended by Title VII. The IMLA’s purpose was to advance tribal independence and foster tribal self-determination with respect to natural resources on tribal land. The statute was designed to help tribes reap the greatest return possible from their property. Such goals were consistent with the Indian Reorganization Act, passed several years earlier.
When Title VII came along, it also contained special treatment for Indian tribes. First, tribes were excluded from the definition of employers subject to nondiscrimination requirements. Second, Title VII expressly permitted businesses on or near an Indian reservation to give preference in hiring to Indians over non-Indians. The 9th Circuit looked to the legislative history of these provisions and concluded that Congress intended Indians to be able to protect and promote their own interests, preserving existing hiring preferences.
Title VII didn’t expressly address hiring preferences for Indians from one tribe over those from another. The EEOC’s position was that such a preference amounted to national origin discrimination. The question for the 9th Circuit was whether tribal affiliation (e.g., Navajo, Hopi, or Oto) was equivalent to national origin. The court answered that question in the negative.
Under Title VII, “national origin” connotes the country where an individual or her forbears were born. The concept is different from race or ethnicity because persons of different races can come from the same country. On the other hand, the court noted, tribal distinctions are based on blood quantum and lineage and thus closely related to race and ethnicity—not national origin.
Looking to U.S. Supreme Court authority upholding preferences for Indians in other contexts, the 9th Circuit concluded that the preferences in the Peabody leases didn’t constitute national origin discrimination. Rather they reflected permissible political distinctions that maintained the unique historic obligation of the federal government to Indian tribes.
Dismissal of the case was affirmed. EEOC v. Peabody Western Coal Co., Case No. 12-17780 (9th Cir., Sept. 26, 2014).
Wheels of justice grind slowly!
This decision—perhaps the last in a 13-year lawsuit—demonstrates the challenge an employer faces when different government agencies impose seemingly contradictory requirements. It also shows how complex, slow, and costly it may be for an employer to litigate a novel question before it gets a satisfactory answer.
Nancy Williams is a partner with Perkins Coie, practicing in the firm’s Seattle, Washington, office. She may be contacted at NWilliams@perkinscoie.com
This is fascinating-it is as though the EEOC interprets every law in the most unfavorable way towards business and is aggressive even when common sense would dictate otherwise. They have a history of being struck down by the courts but continuing to fight, which wastes taxpayer money and hampers those it is supposed to protect.