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June 04, 2009
Store on Tribal Land: An ‘Intramural Activity'?
Two male relatives, members of an Indian tribe, run a tobacco and sundries store on a tribal reservation in Washington. But the Department of Labor (DOL) took the men to court, seeking unpaid overtime under the Fair Labor Standards Act (FLSA) for many current and former store employees. Were the employers entitled to sovereign immunity from FLSA? That was the question facing judges.

What happened. “Paul Mason” and “Nick Mason,” both members of the Puyallup tribe, operate a store called Baby Zack’s on Puyallup land. After subpoenaing the store’s books, DOL calculated that the Masons owed more than $31,000 in back pay for overtime wages. The appeals court opinion of the case notes that Baby Zack’s had gross annual sales for 2004 and 2005 of $500,000 or more.

In federal district court, the Masons argued that they are not subject to the provisions of FLSA. They cited what are called “intramural activities,” or those taking place within their tribe. The judge overruled them on the grounds that the Masons engage in interstate commerce—they sell goods obtained from outside Washington—and that they employ and sell to non-Indians. The Masons next pointed to the Medicine Creek Treaty, which was signed in the 1850s. In part, it specifies that some lands are for the exclusive use of the Indians and that white men can’t live on them without tribal permission. The judge overruled them on the treaty as well, repeating that they are covered by FLSA.

Further, he said, if the Masons didn’t pay the back overtime, the court would appoint a receiver to ensure payment, with the Masons also paying that person’s wages and expenses. The Masons appealed to the 9th Circuit, which covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington.

What the court said. Appellate judges said they had never ruled on a situation exactly like this one. But they reviewed their 1985 decision involving federal laws that do not say whether they apply to Indian tribes. In that case, judges wrote that such a law would not apply if it “touches exclusive rights of self-governance in purely intramural matters.” That was not the situation here, they ruled, nor was the 1850s treaty relevant to wage and hour laws. The Puyallup tribe had no wage and hour laws of its own, so FLSA applies to them. But judges felt the lower court had overstepped by vowing to appoint a receiver, so that ruling was rejected. Solis v. Matheson, U.S. Court of Appeals for the 9th Circuit, No. 07-35633 (2009).

Point to remember: On these same grounds, such other federal laws as the Americans with Disabilities Act, ERISA, and OSH Act apply to many tribal activities.

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