What is the role of casino employer in performing due diligence in evaluating prospective employees?

Where a clear and limited delegation of authority is granted to the gaming commission, the employment function is the exclusive province of the tribal casino.  Accordingly, tribal casinos have a duty to perform the full range of employment functions which include hiring, firing, disciplining and coaching employees.

The only role of the gaming commission in the employment process is, for some or all of the employees of the tribal casino, a license from the gaming commission is a prerequisite.  The some or all qualifier limits the licensing obligation under federal law only to primary management officials and key employees which therefore applies to only a portion of the casino workforce.
Whether a license is a prerequisite for all employees is determined by the tribe or its regulator through the gaming ordinance or the regulations promulgated by the gaming commission.  Some tribal gaming ordinances meet the minimum threshold required by federal law and therefore require the licensure of primary management officials and key employees.  On the other hand some tribes require the licensure of all employees receiving a paycheck from the gaming enterprise.  Whether licensed or not, gaming employers have a duty to perform the full range of employer duties.

Because gaming commissions are performing substantial due diligence in making licensing decisions as a prerequisite to the hiring of some or all of the casino’s employees, some tribal casinos assert redundancy as the reason for neglecting the employer’s duty of performing due diligence on prospective employees.  Under this logic due diligence in the form of a reference check, background investigation, and thorough interview is abandoned by the tribal casino employer under the mistaken belief that the regulator’s licensing work is sufficient.  The flaw in this analysis is the tribal gaming employer never sees the licensee application or the commission’s work in evaluating the licensee.  Since the casino employer never sees the results of the gaming commission’s licensing work, reliance on work not seen is not reasonable for an employer.  From a liability perspective the safety of employees and the avoidance of a claim for negligent hiring is mitigated by the reasonable exercise of due diligence by employers.  Reliance on the due diligence of another entity, like a gaming commission making licensing decisions, is not reasonable.

Recommendation:  Tribal gaming enterprises should evaluate prospective employees by performing background checks, verification of information submitted during the application process and other due diligence.

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.