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New NLRB Rule Presents an Unwelcome Choice for Tribal Businesses

Chloe Thompson
10/22/11

The National Labor Relations Board (NLRB) has been intruding on tribal sovereignty for several years, by asserting authority over businesses owned and operated by tribal governments, including those located on reservations. And it's poised to strike yet another blow. On January 31, 2012, the NLRB will begin requiring employers subject to the National Labor Relations Act (NLRA) to post a notice informing employees of their NLRA rights. The NLRB’s intent for the rule to apply to tribal businesses is implied, given its position that it has authority over them.

Until now, tribal businesses could largely avoid the question of the NLRB’s authority over them (or lack thereof), unless they became the target of union organizers. That will no longer be the case. It remains arguable that the NLRB lacks authority over tribal businesses, although recent cases make that position more tenuous. But as a practical matter, when the new notice-posting rule takes effect, tribal businesses will be directly faced with a choice whether to comply with the NLRB’s directive or not. And there will be risks either way.

On one hand, complying with the new rule by posting the notice could pose consequences for tribal sovereignty. A tribal business that posts the notice could be viewed as conceding the NLRB’s authority over it, something which many tribal businesses have not conceded to date. Posting the notice may also prompt employees to file NLRB charges against a tribal business that they would not otherwise have filed. Each such charge constitutes a challenge to tribal sovereignty, and carries with it the risk of a negative outcome. And the threat of increased charges is heightened by the fact that the broadly-worded notice could cause employees to erroneously believe they have rights that they do not actually have. Moreover, the resources a tribal business expends to address legal issues associated with the notice, including any charges filed against it, are resources that consequently will not be available for essential tribal government services to children, elders, and the community. So, the risks of posting the notice are significant.

The possible consequences of not posting the notice, on the other hand, are set forth in the new rule, and include the following:

• Upon the filing of a charge, the NLRB will “make reasonable efforts” to get the employer to post the notice. If the employer does post the notice at that point, “there will rarely be a need for further administrative proceedings.”

• If the employer still refuses to post the notice, then the NLRB may issue a complaint against the employer, and may ultimately find that the employer has violated the NLRA and committed an unfair labor practice. In that event, the NLRB will order the employer to post the notice, as well as a remedial notice.

• The NLRB might extend the normal 6-month deadline for bringing claims, unless the employer can show that the employee had actual or constructive notice that the conduct complained of is unlawful. This could leave the employer open to claims indefinitely (although the NLRB would take into account other factors such as prejudice to the employer in deciding whether to extend the deadline and, if so, for how long).

• If the employer’s failure to post the notice was knowing and willful, the NLRB might consider it as evidence of anti-union animus in a case in which the employer’s motives for given conduct are at issue.

• The NLRB may also invoke unspecified “additional remedies” in some instances.

Of course, a tribal business faced with these consequences might argue, perhaps successfully, that the NLRB lacks authority over it. Even if the NLRB were found to have authority over it, some of the consequences may not apply if the tribal business believed in good faith that it was not subject to the NLRB’s authority, as many tribal businesses arguably do. Furthermore, the possible consequences are limited in several ways. For example, the NLRB does not have investigatory authority unless and until someone files a charge against an employer, so there is no threat of random enforcement visits. Even in the event of a charge, there is essentially a second opportunity to post the notice and avoid further consequences. And, notably, the NLRB does not have the authority to impose fines for an employer’s failure to post the notice. Accordingly, the consequences of not posting the notice are relatively limited and, some might say, not particularly severe in the first place.

Tribal businesses will need to determine in the coming weeks what position to take regarding the NLRB’s new rule. The choice is not a welcome one, and either course of action has potential consequences. But some consequences are more significant than others, and tribal businesses that value sovereignty may well decline to post that piece of paper.

S. “Chloe” Thompson is an attorney admitted to practice in several tribal courts and the States of Minnesota and Washington.

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