Last week a federal court dismissed Equal Employment Opportunity Commission v. Peabody Coal and Navajo Nation in a long awaited judgment reaffirming the legality of utilizing tribe-specific preference in hiring.  Many tribal governments offer government and enterprise jobs first to qualified members of the tribe before offering the job to members of other tribes and the courts have characterized that hiring process as tribe-specific preference, but a cloud of litigation has raised questions regarding the use of tribe-specific preference and now that cloud is mostly removed.

The courts have been engaged in this litigation since June 2001 when the EEOC filed a complaint against tribe-specific preference and alleging national origin discrimination in violation of federal civil rights laws.  Peabody, a private company located on tribal lands, preferred Navajo citizens in hiring consistently with Navajo law and a lease between Peabody and Navajo Nation.  That lease had been approved by the federal government which was the same federal government raising objections through a lawsuit.  In addition to the blatant inconsistency of the federal government’s argument that the lease it approved would later be challenged, the federal court dismissed EEOC’s claims for other reasons declaring that tribe-specific hiring is not a race based decision triggering civil rights claims, but instead a choice based on the connection between a tribal member and her tribe.  It is that connection (tribe to tribal member) which is the basis of the hiring decision and it is that connection which likely makes the employee a better fit for the job.  This rationale was the source of an earlier United States Supreme Court decision called Morton v. Mancari which declared that Indian preference did not violate the civil rights of non-Indian applicants for jobs at the Bureau of Indian Affairs.

The Peabody court, in dismissing the EEOC’s claims, focused on the distinction between (1) national origin discrimination and (2) hiring based on the legitimate relationship between tribe and member (political classification according to the court). When there is support for tribe-specific hiring which focuses on the relationship between tribe and member, the Peabody court held that the hiring decision may further legitimate, non racially based goals.  When tribes focus on the connection between tribe and its members in hiring, that focus may generate tribal self-sufficiency, economic development and self governance.

Is there still risk with using tribe-specific preference in hiring?  There are still risks with tribe-specific preference and those risks likely fall into two groups.  The first is when the tribe has executed a funding agreement which specifically references “Indian preference” as a requirement of the contract.  Reading the fine print of funding agreements is part of the due diligence required in evaluating this potential risk. Secondly, there are a handful of other cases challenging tribe-specific preference which gives the EEOC some authority to scrutinize these hiring practices, but in my view, that authority is significantly curtailed by the Peabody holding.

Congratulations to Albuquerque lawyer and gentleman Paul Frye and his legal team for excellent work generating an excellent result.

Recommendation:  Review your preference laws and policies to determine if tribe-specific preference is clearly defined and the reasons supporting tribe-specific preference is clearly articulated.  As to the latter point, do your laws and policies articulate the value in leveraging the significant talent tribal members bring to the workplace which in turn promotes tribal self-sufficiency, economic development, self governance and myriad other objectives?  Please consider updating and therefore strengthening your preference laws and policies.