Alaska Employment Law

The Ninth Circuit issued an opinion Monday in Solis v. Paul Matheson, et al., ___ F.3d. ___ (9th Cir. Apr. 20, 2009), holding that that the Fair Labor Standards Act overtime provisions applied to a business located on an Indian Reservation and owned by trial members. 

A statute of general applicability such as the FLSA will ordinarily apply to Indians as well as non-Indians.  However, if a statute is silent as to whether or not it applies to Indians, there are certain circumstances under which it will not govern Indian affairs.  One well-known exception concerns if the law involves something that implicates the exclusive rights of self-governance in intramural tribal affairs.  For example, in Snyder v. Navajo Nation, 382 F.3d 892, 894 (9th Cir. 2004), the court held that the FLSA did not apply to tribal law enforcement officers because law enforcement touched upon the tribe’s exclusive rights of self-governance in an intramural tribal affair.

Paul Matheson, a member of the Puyallup Indian Tribe, owns and operates Baby Zak’s, a business selling tobacco products and other goods on the Puyallup Indian Reservation.  Its customers are Indians and non-Indians.  Baby Zak’s employs both Indians and non-Indians.  Matheson argued that Baby Zak’s was exempt from FLSA coverage primarily because the business was owned by tribal members, and therefore something that touched upon purely intramural affairs.  The Ninth Circuit rejected this argument. 

The court concluded that Baby Zak’s did not qualify for the intramural exemption because it was primarily a “commercial enterprise engaged in interstate commerce selling out-of-state goods to non-Indians [and Indians] and employing non-Indians [and Indians].”  There was not, in other words, a sufficient basis to link up the enterprise with any issue implicating tribal self-governance.   The court recognized that the Puyallup tribe had the right to regulate economic activity involving its own tribal members on tribal land.  The court also acknowledged that in certain circumstances tribes retained authority to regulate the conduct of non-Indians transacting business or entering into employment relationships on tribal land.  However, the Puyallup tribe never asserted any regulatory authority over non-Indians with respect to issues concerning wages and employment.