This article originally appeared in the March 2019 “Infrastructure” print edition of Native Business Magazine.
Employees are vital assets — like any other piece of business infrastructure. Across industries, for a business to scale, founders rely on employees to act as the bridge between the business and clients.
“Workers are absolutely imperative to business success,” says Geoff Hash, co-founder of The EiroBridge Group, a consulting firm committed to helping businesses thrive. Hash is also a licensed attorney who, for the past 15 years, has worked with business owners, including Tribal Governments and Native-Owned business owners, providing both litigation and counseling services in the area of employment law.
“You’ve got to have employees that are not only proficient in whatever service you’re providing but also have the emotional intelligence to connect with your customers or clients so they keep coming back,” Hash stresses.
Hash stands by the belief that “all work is sacred,” naturally excluding work that is illegal or aimed at exploiting others, he adds. He believes and has witnessed firsthand that leaders who embrace this fundamental truth “naturally do things in their marketplace and workplaces that lead to increased employee engagement, decreased incidents of improper behavior (whether that’s harassment or anything else), and decreased expense related to litigation, turnover, administrative charges, etcetera,” he says.
Hash adds: “I think Indian Country is more likely to embrace the sacredness of work than those on Wall or Main Street.”
While employees can act as the bridge to efficiency and customer retention, on the flip side, a disengaged employee can disrupt business and sever relationships with potential customers. Worse, employees can become a huge liability.
“Employees can become litigants and losses,” Hash says. “Those lawsuits can be very expensive in terms of hard economic cost, and they can be time-consuming and draining beyond just dollars and cents. The emotional tolls that lawsuits take are tremendous, and they’re often not realized until you’ve been through the lawsuit as a defendant in the hot seat, so to speak. Avoiding those types of legal issues, especially when it comes to litigation, is very significant to business success.”
The most common claims filed against Tribes and Tribal enterprises are those by federal government agencies, especially the Department of Labor — often for wage and hour violations as well as workplace safety issues. The great majority of those claims stem from employer misclassification of workers.
And once one employee files charges against a place of work, it opens the door for a class action lawsuit. “The plaintiff attorney receiving that call does not care about getting anything other than that employee’s paystub information. Because once they get that, it’s almost guaranteed that they can find a technical violation to bring a claim not only on behalf of that individual employee, but on behalf of every single other employee that is similarly situated,” Hash says.
Native Business Magazine asked Hash to shed light on how Tribal and Native-owned businesses can cultivate a trustworthy team of employees and shield themselves from potential lawsuits.
NBM: How can a Tribally or Native-owned business protect against potential claims?
Hash: That’s the million-dollar question. To sum it up, I would say: get good, trusted, sound advice from the very beginning.
Partner with trusted legal counsel that: (1) knows the law; (2) knows the business(es) involved; and (3) is not afraid to speak candidly and directly to the leadership. In my experience, many attorneys working in Indian Country are too fast to say ‘yes’ to Tribal Council’s without advising, candidly, of the real risks or even saying ‘no’ when appropriate. I also think many Tribes and related businesses fear the expense involved with consulting legal counsel. From my perspective, however, a dollar spent today on good counsel will save many dollars spent tomorrow if you opt for no (or bad) counsel.
NBM: While some Tribes and Tribally owned businesses may think or hope they’re impervious to the U.S. Equal Employment Opportunity Commission (EEOC) laws and other national labor laws, those rights vary tremendously across geographic jurisdiction, the law(s) at issue, and the facts regarding the work (nature of the work, where it’s performed, etc.). What’s safe to assume when it comes to sovereign immunity?
Hash: The bottom line is that outside of strictly/purely governmental functions occurring strictly on Reservation, Rancheria or Trust land (as opposed to at a Tribal-owned business), Tribes are well-advised to start with the presumption that they must comply with the various local, state and especially federal employment laws. That presumption should only change once they have applied the specific facts to the laws and jurisdiction at issue, with the help of legal counsel that is well experienced in the unique intersection of Tribal sovereignty, business and employment law.
Too often, I have seen where Tribes, understandably but mistakenly, assume that as Sovereign Nations, they are immune from the employment-related laws of other jurisdictions. That can be a very expensive assumption, in terms of legal fees, penalties, and interruption of Tribal affairs/attention. That attitude often also leads to practices that put them at a competitive disadvantage when it comes to recruiting and retaining talent.
One additional factor worth noting is contracts. Specifically, many Tribes have entered into contracts with other governments (state and federal) or other entities. The vast majority of those contracts, at least upon presentation to the Tribe, have choice of law clauses, forum/venue selection clauses, and alternative dispute resolution clauses, each of which have been found by many courts to be a waiver of sovereign immunity. It happens in virtually all business-to-business contexts.
It also happens when Tribes seek to do government contracting work, or accept government grant funds. Often, without actually knowing it, Tribes are ‘voluntarily’ subjecting themselves to compliance with state and federal laws, as well as the enforcement mechanisms that go with that.
NBM: How can Tribes leverage sovereignty to its greatest extent?
The single-most important factor here involves a proactive exercise of sovereignty. Too often, sovereignty is viewed in the context of a shield — as sovereign immunity (from application of laws and enforcement of them). The more important aspect of sovereignty, from my perspective, is the authority to govern yourself under your own laws. As a sovereign, a Tribe has the right and authority to adopt and enforce its own laws (ideally, enforcement comes from a truly independent judiciary that is committed to due process). If it does both, it will have a strong jurisdictional defense, and it will be less likely to get hit with claims.
I see a tremendous amount of opportunity — through the marketplace and business — flowing from proper exercises of sovereignty, knowledge of the limits of sovereignty and sovereign immunity, and recognition that growth is about a lot more than just complying with the law.
NBM: What about small, privately owned Native businesses and entrepreneurs — how can they avoid issues or claims, while cultivating a positive and productive workplace environment?
Hash: Beyond, as previously discussed, recognizing that work is sacred, focus on the following, in roughly this order:
- Assume that they ARE subject to all local, state, and federal laws (to the extent those are otherwise applicable to a non-Native owned business).
- Engage qualified counsel — counsel with experience in Indian Country, their state/jurisdiction, and employment law to help proactively identify what laws they are actually subject to.
- Evaluate hiring practices. (Stop hiring in a hurry/without clarity on anything beyond immediate panic to fill immediate need.)
- Refine wage/hour practices.
- Correctly classify independent contractors versus employees, and use written contracts when hiring independent contractors.
- Clarify and accurately classify employees as salaried versus hourly and exempt versus non-exempt from overtime pay.
- Track all time employees work (no off the clock work).
- Pay overtime properly.
- Hold anti-discrimination/harassment trainings. (Go beyond creating and disseminating written policies.)
- Be diligent about performance management and termination procedures — particularly as it relates to documentation and use of general releases for risk-mitigating terminations.