On February 21, 2017, a federal court in Wisconsin reaffirmed a tribe's sovereign immunity with respect to Title VII claims of wrongful termination. See Bruguier v. Du Flambeau, 16-cv-604-jdp, (W. Dist Wisc. February 21, 2017). The court found, among other things, that tribes do not waive their sovereign immunity when they incorporate federal labor laws into their tribal code.

The case involved claims from two former tribal employees who sued the Lac du Flambeau Band of Lake Superior Chippewa Indians. The employees alleged that the then-president of the tribal council "arranged a phony internal audit to create a negative perception" of the plaintiffs. The tribe subsequently accused the plaintiffs of misconduct and terminated their employment without giving the plaintiffs an opportunity to defend against the accusations. The plaintiffs filed separate charges with the U.S. Equal Employment Opportunity Commission (EEOC), each alleging Title VII claims of sex discrimination, race discrimination, and retaliation against the tribe. The EEOC dismissed both charges for lack of jurisdiction. The plaintiffs then separately filed actions against the tribe, which were consolidated.

The tribe filed a motion to dismiss for lack of subject matter jurisdiction or failure of the plaintiffs to state a claim. The court found that (i) the tribe's sovereign immunity precluded the plaintiffs' claims, and (ii) a tribe is not an "employer" under Title VII such that the tribe's incorporation of federal labor laws into its code did not waive its sovereign immunity.

With respect to the court's first finding, the plaintiffs claimed that the tribe's corporate charter contained a waiver of sovereign immunity. The court noted that the alleged waiver language was contained in the charter of the tribe's Section 17 corporation and not the tribe's charter. Indeed, court explained that the tribe and its Section 17 corporation are distinct entities. Thus, because the plaintiffs sued the tribe as employees of the tribe, the tribe had not waived its sovereign immunity.

With respect to the court's second finding, the plaintiffs contended that the tribe waived its sovereign immunity by incorporating various federal labor laws into its tribal code. The court followed the Tenth Circuit's precedent in Nanomantube v. Kickapoo Tribe in Kan. that an "Indian tribe's promise to provide fair labor standards in no way constitutes an express and equivocal waiver of sovereign immunity and consent to be sued in federal court." The court also found an additional reason to dismiss the plaintiffs' Title VII claims: An Indian tribe is not an "employer" under Title VII; thus, "[b]y its terms, Title VII does not apply to Indian tribes."

In sum, tribes and their entities that have not otherwise expressly waived their sovereign immunity can continue to consider incorporating various federal labor and employment laws into their codes and charter without inadvertently waiving their sovereign immunity, unless Congress has expressly abrogated the tribes' sovereign immunity with respect to a specific labor and employment law. Because federal labor and employment laws' application to tribes vary across each jurisdiction, we encourage you to discuss with your counsel the pros and cons of choosing to incorporate and apply the various federal labor and employment laws into your tribal law and order code.