Can a state worker’s compensation court hear a dispute involving an injury incurred by a worker while assisting with the expansion of an on-reservation casino?

Recently, the Minnesota Supreme Court said that Minnesota worker’s compensation courts have the power (jurisdiction) to hear disputes when the worker is injured in connection with a casino expansion project located on tribal lands.  The employer was an enrolled member of the tribe who contracted with the project’s general contractor.  The construction agreement between the tribe and contractor included a dispute process wherein the parties invoked tribal court jurisdiction.  The subcontractor, for whom the employee worked, purchased worker’s compensation insurance and when the claim arose, the insurance company argued that Minnesota courts lacked the power to hear the dispute.  The state court rejected the insurance company’s argument even though the general contractor agreed to tribal court jurisdiction.

The court wrestled with the question of whether employers and employees can contract away Minnesota worker’s compensation coverage and in rejecting this proposition the court stated:

“The rule in workers compensation is dictated by the overriding consideration that compensation is not a private matter to be arranged between two parties; the public has a profound interest in the matter which cannot be altered by any individual agreements.”

That reasoning may make sense to the state court because worker’s compensation is an important safety net for injured employees which cannot be waived through employee consent.  However, the debate never included a rejection of worker’s compensation; instead the debate was over whether the tribe’s worker’s compensation laws or the state’s worker’s compensation laws would define the rules for the injured worker.  The state court chose the state’s worker’s compensation system to bring relief to the employee.

Note, this case did not involve the tribe as employer but instead it involved an employee working for a subcontractor hired by a general contractor with whom the tribe had a contract.  If the tribe was the employer and was sued under these circumstances, the defense of immunity may have forced the Minnesota court to change its decision.

Also, the written agreement invoking tribal court jurisdiction was between the tribe and the general contractor.  Since the injured worker was employed by a subcontractor, there is an argument that the worker did not consent to tribal jurisdiction.

Recommendation:  Make sure tribal employees, contractors and subcontractors explicitly consent to the tribe’s jurisdiction.  An abundance of employee consent to follow the tribe’s rules and submit disputes to the tribe’s courts is not a guaranty of tribal jurisdiction but it will certainly arm the tribe with a strong argument.

About the Author:

Richard McGee is a lawyer in Minneapolis, Minnesota who focuses his practice on gaming, gaming regulation, tribal employment and litigation in tribal, state and federal courts.  Richard has the privilege of working with tribes and tribal organizations on Human Resources matters including training.  Additionally, tribes ask Richard to address specific topics while incorporating the tribe’s related laws and policies into the sessions.  This is an invitation to engage Richard to produce and facilitate training for your tribe.