Regulatory Updates

Smoking Bans In Tribal Casinos: Health Issue or Labor's Latest Smokescreen Assault on Tribal Sovereignty?

John H. Douglas
John H. Douglas

John H. Douglas, Attorney at Law
Foley & Lardner LLP

As tribal leaders are well aware, the economic success of tribal gaming has spurred organized labor into action designed to protect its “turf” in competing venues such as Las Vegas and Atlantic City. Organized labor's repeated tactic of choice has been litigation aimed at, among other things, subjecting tribal employers to federal and state laws that apply to private employers generally, particularly when they directly or indirectly benefit labor. With the applicability of the federal National Labor Relations Act to tribal casinos now largely settled (absent a legislative fix), organized labor is now free to turn its attention to other “wedge” issues that it can use to pit tribal employers against their employees - while potentially undermining tribal sovereignty in the process.

The latest chapter in this saga may well turn out to be union-backed efforts to ban smoking in tribal casinos. As most tribal leaders know by now, following a Fall, 2007, campaign and election, the United Auto Workers (UAW) succeeded in securing the right to act as the exclusive representative of a bargaining unit of roughly 3,000 dealers at the Mashantucket Pequot's Foxwoods casino. During the run up to the election in July, August and September, 2007, as unions invariably do, the UAW had filed a variety of unfair labor practice charges against Foxwoods. (The reason that unions do this is because, in the event that the union loses the election, such unfair labor practice charges - if proven - can provide a basis for a union to seek a new election or even to secure a “bargaining order” requiring the employer to bargain with a union despite its election loss.) Among other things, the union alleged that Foxwoods had unlawfully threatened employees with discipline for engaging in union activity, prohibited employees from soliciting or distributing literature on behalf of the union, engaged in surveillance of employees' union activities, threatened employees with loss of benefits and changes in schedules if they voted for the union, solicited employee complaints, prohibited workers from wearing union insignia, and suspended two employees and issued a written notice to another for engaging in union activities.

While these ULP charges were still pending, and at the behest of Foxwoods' dealers, on February 21, 2008, Mary Ann Hadley, a Connecticut Democratic State Senator, introduced Senate bill 419 in the Connecticut legislature - a bill that would create a 10-member committee (including Connecticut's six legislative leaders, its governor, attorney general and public health and consumer protection commissioners) to facilitate an “agreement” to extend the state's smoking ban to tribal casinos. At a subsequent February 29 press conference introducing the bill and attended by a large number of Foxwoods workers wearing yellow UAW “Union Yes” t-shirts, Connecticut Attorney General Richard Blumenthal claimed that the anti-smoking legislation was “historic” and that the UAW-backed employees would “make history at the casinos.”

The economic impact of such a ban can indeed be significant. For example, on December 8, 2005, the State of Washington banned smoking in all workplaces, including bars, restaurants, bowling alleys, non-tribal casinos, and bus stops. Currently Washington's is the strictest smoking ban by any state in the country, and studies have shown very high levels of compliance with the law. According to published reports, however, following the adoption of the ban in Washington, the revenues of 30 of the largest non-tribal casinos in the state, which had previously been increasing in excess of 13 percent per year, suddenly fell 14 percent. There seems to be no question that a large number of gamblers also happen to be smokers.

Not surprisingly, Connecticut tribes have reacted negatively and denounced Senator Hadley's proposed legislation, publicly characterizing it as an “inappropriate assault on the principles and laws that govern the relationship between the state of Connecticut and the Indian tribes of Connecticut.” The issue, according to the Connecticut tribes, is that the tribal-state compacts in Connecticut were carefully written to apply state laws strictly to the “sale and distribution of alcoholic beverages.”

In its 1987 decision in California v. Cabazon Band of Indians, the U.S. Supreme Court found that state “civil” (as opposed to “criminal”) and regulatory (as opposed to “prohibitory”) statutes only apply on tribal lands if Congress has authorized their application. Particularly as the effects of “second hand” or “environmental” smoke have become better understood, an increasing number of states have adopted bans on smoking in restaurants and other public places. In 1973, for example, Arizona became the first state in the United States to pass a comprehensive law restricting smoking in public places. California enacted a workplace smoking ban in 1994, and a complete smoking ban in enclosed spaces in 1998. Florida made a workplace smoking ban part of its state constitution in 2002. As of 2008, only 18 states do not have any form of a smoking ban applying to bars, restaurants or public spaces, while 20 states ban smoking in all such locations. In states without bans, numerous cities and smaller municipalities have taken it upon themselves to institute such bans.

Federal laws of general applicability, on the other hand, do apply to tribal employers with only certain, limited exceptions, and under a 1985 decision of the federal Ninth Circuit Court of Appeal, Donovan v. Coeur d'Alene Tribal Farm, OSHA, the Occupational Safety and Health Act, the federal statute that governs workplace safety, does apply to “commercial activity” taking place on tribal lands. Although OSHA proposed tough regulatory standards for secondhand smoke in the workplace in 1994, faced with intense opposition by the tobacco lobby, they never passed, and in 2001, OSHA announced that it would no longer pursue its anti-smoking agenda and would instead defer to state and local initiatives.

On March 13, 2008, Attorney General Blumenthal provided state legislators with a formal legal opinion in which he claimed that the law banning smoking at the two tribal casinos could withstand a federal court challenge. According to Attorney General Blumenthal, at “the core of each compact” with the Connecticut tribes, was “a key health and safety provision - a critical mandate that health and safety conditions in every gambling facility be no less rigorous than state public health and safety standards." Blumenthal opined that "the statutory smoking ban is clearly and quintessentially a public health protection, applying broadly to all public buildings and facilities across the state. The compacts extend this standard to the gaming facilities, unless the legislature creates an exception. The legislature has authority to make an exception for the casinos, but also to eliminate the exception, and apply the smoking ban as a broader public health standard.”

"Principles of sovereignty,” Blumenthal wrote, “in no way bar this measure, because the tribes have already agreed - as a condition in the compacts - to adopt public health standards at least as rigorous as the state's public health laws.”

At the same time, however, and in the same opinion, Blumenthal conceded that the process of defending such action by Connecticut in federal court would be long and expensive. Accordingly, Blumenthal indicated that the best course of action would be for Connecticut Governor Rell to commence negotiations with the Connecticut tribes over the issue. Both Bruce “Two Dogs” Bozsum, the chairman of the Mohegan tribal council and the Pequot Tribe subsequently issued statements welcoming the invitation to commence negotiations.

Of course, just as states such as California previously attempted to foist onto tribal employers compact provisions favorable to labor, tribes can and should expect that some states - whether or not influenced by organized labor - will continue to raise smoking bans during compact negotiations, and tribal employers should be prepared for unions to continue to make the case for such bans as part of their organizing propaganda.

In states where there is a ban on smoking in non-tribal casinos in effect and there would not be any competitive disadvantage from adopting such measures, tribal employers may want to consider getting in front of - and defusing - the issue by proactively prohibiting (or at least regulating) workplace smoking under tribal law. Such a tack has the advantage, obviously, of maximizing tribal sovereignty and self-determination. In states where there is no ban in effect, in contrast, the calculus will be more complex.

Connecticut and its tribal employers now may well be headed in the direction of a negotiated resolution. Indeed, on March 24, 2006, Foxwoods and the UAW entered into a private settlement of the UAW's election-related unfair labor practice charges. The momentum on this issue, at least for now, thus seems to be behind negotiation rather than confrontation. As always, however, tribal leaders should remain on guard for new developments.

John H. Douglas is a management-side labor lawyer and partner in the San Francisco office of Foley & Lardner LLP. He can be reached by calling (415) 984-9879 or email jdouglas@foley.com.