United States: Key Labor And Employment Issues Affecting Alaska Native Corporations

Walter T Featherly III is a executive partner in Holland & Knight's Anchorage office.

Similar to tribes, Alaska Native Corporations (ANCs) are exempt from the definition of an "employer" under Title VII of the Civil Rights Act of 1964. Alaska Native Claims Settlement Act (ANCSA), 43 U.S.C. § 1626(g) (2012). This exemption applies to ANCSA corporations and related partnerships, joint ventures, trusts, or affiliates in which an ANC owns not less than 25 percent of the equity. Id. Congress has made clear that the purpose for exemption of ANCs from Title VII is to allow ANCs to adopt shareholder hiring preferences without facing employment discrimination charges. See Alaska Land Status Technical Corrections Act of 1992, Pub. L. No. 102-415, § 11, 106 Stat. 2112, 2115 (substituting the definition of employer as a means to avoid conflict with the 1964 Civil Rights Act).

Title VII's definition of employer incorporates the ANCSA exemption, which means that ANCs will be similarly exempt from any federal statute that adopts the Title VII definition of employer. For example, the Genetic Information Nondisclosure Act (GINA) explicitly adopts Title VII's definition of employer, ANCs are also exempt from GINA restrictions. 42 U.S.C. § 2000ff(2)(B).

Despite the Title VII exemption, numerous other federal, state, and local laws apply to ANCs and their affiliated entities. For example, Americans with Disabilities Act (ADA) defines employer in terms comparable to Title VII and expressly exempts Indian Tribes from its definition of employer, but it does not expressly incorporate Title VII's definition exempting ANCs. Accordingly, courts have held that ANCs are not exempt from claims under the ADA. Pearson v. Chugach Gov't Servs., 669 F. Supp.2d 467, 476 (D. Del. 2009) (holding that ANCs retain liability under the ADA).

Similarly, the Age Discrimination in Employment Act and the Equal Pay Act do not incorporate the Title VII definition of employer, and they do not exclude or exempt ANCs.  See, 29 U.S.C. § 630(b) (listing ADEA definition of employer) and § 203(d) (listing Federal Labor Standards Act definition of employer, which governs the Equal Pay Act).

Another statute providing a private cause of action for employees is the Civil Rights Act of 1866, 42 U.S.C. § 1981, which courts have held is a separate statutory basis for prosecuting an employment race discrimination claim.  (See Johnson v. Ry. Express Agency, 421 U.S. 454, 461 (1975) (holding that remedies under Title VII and the Civil Rights Act of 1866 are "separate, distinct, and independent"). But there is a split of authorities on the question whether the Title VII exemption for ANCs extends to § 1981 claims.

The Tenth Circuit has issued an opinion suggesting that Title VII's express exemption operates to preclude liability from being imposed in any related context. This supports an argument that ANCs are not subject to § 1981. (See Wardle v. Ute Indian Tribe, 623 F.2d 670, 672–73 (10th Cir. 1980) (determining that the specific exemption of Indian Tribes from compliance in Title VII control the broad, general civil rights provisions which do not speak to the issue)).

But the Fourth Circuit, on the other hand, held that ANCs are subject to § 1981 claims (See, Aleman v. Chugach Support Servs., Inc., 485 F.3d 206, 210–11 (4th Cir. 2007)). That court noted that Title VII limits exclusions to Title VII itself and that § 1981 includes no such exemption for ANCs.

The District of Alaska has agreed with the Fourth Circuit and has refused to read an exemption for ANCs into § 1981 when there is a reasonable explanation as to why a difference may exist as to ANC exemption status under § 1981 as opposed to Title VII. See Becker v. Kikiktagruk Inupiat Corp., No. 3:09-cv-00015-TMB, slip op. at 9–10 (D. Alaska Aug. 12, 2010) (holding that ANCs are not immune from suit under § 1981).

Other federal employment statutes that do not include express exemptions for ANCs and to which ANCs are, therefore, subject, are the Family and Medical Leave Act (FMLA) and the Fair Labor Standards Act (FLSA). Moreover, for ANC companies engaged in federal contracting or receiving federal grants, the contracting provisions or grants typically incorporate a number of federal Equal Employment Opportunity laws and related provisions.

ANCs (and their subsidiaries) are also subject to many state and local laws. For example, as to their employees in Alaska, ANCs are subject to the Alaska Wage and Hour Act (AWHA) and the Alaska Human Rights Act, neither of which excludes ANCs. (Although the Alaska State Commission for Human Rights (ASCHR) does recognize that ANCs are entitled to grant preferences to their shareholders in their employment policies and practices.)

In summary, the patchwork of laws to which ANCs are subject (or to which they are not subject) at the federal, state, and local levels is intricate and complex, requiring ANCs to create, adopt, and follow carefully researched employment policies and procedures that are tailored for each of the jurisdictions in which ANCs have employees. Moreover, due to the frequent changes to the statutes, regulations, and adjudicatory decisions, ANCs much regularly review and revise their policies and standard operating procedures and provide regular training to ensure that the policies and procedures are consistently followed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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