PHOENIX -- Indian nations are free to demand that private firms doing business on reservation land give preference to tribal members despite anti-discrimination laws, a federal appeals court ruled Friday.
In a precedent-setting case with implications in Arizona and beyond, the 9th U.S. Court of Appeals, the judges upheld a requirement the Navajo Nation imposed on Peabody Coal that members of the tribe get special treatment when the company hires workers.
Judge William Fletcher, writing for the court, acknowledged that federal laws prohibit discrimination in hiring by private firms based on "national origin.' And he said that category can be read to include disparate treatment of members of different tribes, as they were once upon a time separate nations.
But Fletcher and his colleagues concluded that the hiring preference instead amounted to discrimination based on a political classification, one designed specifically to benefit the Navajo Nation and its members, because it deals with coal being mined from reservation lands. And that kind of discrimination, he said, is legal.
Friday's ruling is a setback for the U.S. Equal Employment Opportunity Commission which first sued Peabody 13 years ago over its hiring practices.
"We are disappointed by the ruling,' said Mary Jo O'Neill, the EEOC's regional attorney. She said her agency is reviewing the decision before deciding what to do next.
The 2001 lawsuit involves two Hopis and one member of the Otoe Tribe who applied to work for Peabody but were not hired.
"Peabody has a history of refusing to hire non-Navajo Native Americans for open positions at its mine,' the lawsuit charged. "The effect of this reputation is that qualified non-Navajo Native Americans have been discouraged from applying for open positions at Peabody and have accordingly failed to apply for open positions.'
Company officials did not dispute the contention, saying its contract with the Navajo Nation specifically requires that first preference for jobs be given to members of that tribe. And they argued that Navajo and Hopi lands on which it also mines are "sovereign nations' not subject to federal employment laws.
O'Neill argued that's only half right.
She said the EEOC has no power to police tribal hiring practices. But she contends federal law gives her agency power over private companies like Peabody operating on tribal lands.
Federal anti-discrimination laws do allow companies to offer preference to Indians living on or near a reservation. But Fletcher said the question of allowing a tribe and a company to choose which Indians get preference has never been addressed.
In writing the 26-page ruling, Fletcher said Congress approved a 1934 law to provide for tribal self-government and economic development.
He said the U.S. Department of Interior, in a bid to achieve those goals, has approved mineral leases that require a private company to give preference in hiring to members of that tribe. That agency also approved this contract and joined the lawsuit to defend the provision.
"This long-established practice serves to ensure that the economic value of the mineral leases on tribal lands insures to the benefit of the tribe and its members,' Fletcher wrote.
The EEOC, in challenging the Navajo-mandated Peabody practice -- and, effectively, all other similar agreements -- said that still does not make it legal.
Agency attorneys said they read the law to allow only preference for Indians as a category. Anything else, they argued, still amounts to letting a private company discriminate based on national origin.
But Fletcher said that ignores the fact that one purpose of that 1934 law was to ensure that the tribe whose resources were being mined is the one that benefits, not all Indian nations.
What that means, he wrote, is that the preference provision is based on benefitting a specific "political classification,' meaning the tribe, and not on the national origin of the people seeking the work. And that, said Fletcher, is permitted discrimination.
"Measures intended to preserve for the (Navajo) Nation and its members the fruits of the resources found on the tribe's own land are rationally designed to fulfill the federal government's trust obligation to the tribes,' Fletcher said.
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