Opinion ID: 185305
Heading Depth: 2
Heading Rank: 1

Heading: Governmental Capacity

Text: 7 Yukon argues that the Board acted arbitrarily in limiting the exemption afforded to Indian tribes under S 2(2) to activities conducted on a reservation, rather than limiting the exemption to governmental activities of Indian tribes, wherever conducted. In our review of the Board's decision, we must accept the Board's position unless it conflicts with the 'unambiguously expressed intent' of the Congress or is [otherwise] not 'a permissible construction of the statute.'  Hormel v. NLRB, 962 F.2d 1061, 1065 (D.C. Cir. 1992) (quoting Chevron v. NRDC, 467 U.S. 837, 843 (1984)). 8 In the past, the Board has interpreted the exemption under S 2(2) for any State or political subdivision thereof, to include entities that are either (1) created directly by the State, so as to constitute departments or administrative arms of the government, or (2) administered by individuals who are responsible to public officials or to the general electorate. NLRB v. Natural Gas Utility District of Hawkins County, Tennessee, 402 U.S. 600, 604-605 (1971). In Fort Apache Timber Co. v. NLRB, 1976-77 NLRB Dec. (CCH) p 17,475 (Oct. 19, 1976), the Board applied this test to conclude that because the Fort Apache Timber Company is an entity administered by individuals directly responsible to the Tribal Council ... [it is] exempt as a governmental entity recognized by the United States, to whose employees the Act was never intended to apply. Id. at 28,876 n.22. 9 More recently, in Southern Indian Health Council v. NLRB, 1988-89 NLRB Dec. (CCH) p 15,052 (July 29, 1998), the Board applied the direct responsibility test to a hospital located on a reservation and operated by a consortium of seven tribes. The Board concluded that the hospital was exempt from the NLRA pursuant to the State or political subdivision exemption because the directors of the Employer are directly appointed by, and subject to removal by, the governing bodies of the member tribes. Id. at 28,226. 10 Later, in Sac & Fox Industries v. NLRB, 1992-93 NLRB Dec. (CCH) p 17,250 (Apr. 24, 1992), the Board modified its test for application of the State or political subdivision exemption to Indian tribes. In that case the tribe had secured a $30 million supply contract with the Department of Defense, for which it had built or acquired four factories not on its reservation. Many of the workers employed at the acquired factories previously had been represented by a union, but the tribe argued that its substitution as the employer made the operation exempt from the NLRA and, hence, from the obligation to bargain with the union. The Board rejected this claim, explaining that [a]lthough the Board's decision in Fort Apache [ ]contains statements to the contrary ... we read that decision as limited to situations in which the tribal enterprise is located on the reservation. Id. at 32,416. 11 Yukon argues that the Board should read Sac & Fox as having denied exemption to the off-reservation factories in material part because of their commercial nature, not simply because of their location off the reservation. The Board, however, has never drawn a distinction based upon the nature of the Indian enterprise. The Board first said somewhat tentatively in Sac & Fox that the exemption in Section 2(2) for a 'political subdivision' of a 'State' does not clearly include an off-reservation tribal enterprise. Id. Now, the Board has firmly concluded that an Indian tribe does not qualify as a State or political subdivision for purposes of S 2(2) when it conducts activities off its reservation. We can hardly say that position is unreasonable. 12 An Indian tribe, like any other governmental unit, typically operates in its governmental capacity only within its geographical jurisdiction. There are, to be sure, exceptions to that general rule, as recognized, for example, in the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. S 1605(a)(2). The distinction between commercial and governmental activities, however, is often elusive, see Princz v. Federal Republic of Germany, 26 F.3d 1166, 1172 (D.C. Cir. 1994) (noting that FSIA, rather than attempting to define commercial and governmental activity, leaves to courts the task of distinguishing between the two), and the Board has long and reasonably preferred bright line rules in order to avoid disputes over its jurisdiction. See, e.g., Siemons Mailing Service, 122 N.L.R.B. 81, 85 (1958) (setting dollar threshold for the effect on commerce sufficient to support Board jurisdiction). Accordingly, we defer to the Board's interpretation and reject Yukon's argument to the contrary.