The Navajo Nation (Naabeehó Bináhásdzo) is a federally-recognized Indian Nation located on 27,000 square miles of land in the States of Arizona, New Mexico, and Utah.  According to the U.S. Census Bureau, there are over 165,000 people living on the Navajo Nation.  (,_AZ–NM–UT?g=2500000US2430).  

The Navajo Nation plays a vital role in the social, cultural, economic, and legal landscape of the four-corners region, and in some ways, the United States.  As a sovereign Indian Nation, it has the power to make its own laws and be ruled by them.  The Navajo Preference in Employment Act (NPEA) is one example of a significant and much litigated law of the Navajo Nation.  If you or your business entity is an employer on the Navajo Nation or contracts with the Navajo Nation, it is essential that you are familiar with the duties, responsibilities, enforcement mechanisms, and remedies set forth in the NPEA.

The Challenge

Despite the Navajo Nation’s vast human and natural resources, as well as a variety of opportunities for financial growth, the government and people of the Navajo Nation face extraordinary economic, social, and health-related challenges.  According to the U.S. Census Bureau, the Navajo Nation has an unemployment rate of approximately 61%, the median household income is only $33,323 (compared to a median household income for the United States over $74,000), and the poverty rate is 35% (compared to a poverty rate for the United States of 12.6%).   (,_AZ–NM–UT?g=2500000US2430#employment). 


In 1985, the Navajo Nation enacted the NPEA with the intent of improving the Nation’s economic conditions through the comprehensive regulation of employment-related activities on the Navajo Nation.  Among other things, the NPEA creates requirements for advertising vacancies, hiring employees, prohibiting prejudice and intimidation in the workplace, and setting standards for layoffs and adverse actions such as terminations.  The NPEA’s stated purposes include creating employment opportunities for Navajo people, providing training for Navajo people, decreasing the Navajo Nation’s dependency on employment sources outside the Navajo Nation, and bolstering the self-sufficiency of Navajo families.  In a 2013 federal court pleading, the Navajo Nation described the NPEA as “one of the Navajo Nation’s most important laws.”

Since its passage, the NPEA has given rise to costly and time-consuming employment-related litigation in the courts of the Navajo Nation and federal courts.   The impact of this litigation on employers and employees is profound.  As the Navajo Nation Supreme Court wrote in a 2000 Order, “We are mindful of the economic impact of our interpretive rulings of the NPEA.  Interpreted too strictly, the NPEA might discourage business owners and employers from locating their operations on the Navajo Nation.”  Dilcon Navajo Westerner/True Value Store v. Jensen, 8 Nav. R. 28, 40 (Nav. Sup. Ct. 2000).  

Given the importance of the NPEA and the impact of NPEA-related litigation, it is imperative that employers, employees, and their attorneys understand the ins-and-outs of the law.  This blog gives a summary of the most important aspects of the NPEA, including duties and responsibilities of employers and the means by which employees may seek enforcement of their rights.  This blog does not constitute legal advice and does not address application of the NPEA to specific facts or cases.  You are advised to consult legal counsel prior to dealing with actual cases or allegations of NPEA-violations.

Who Is Regulated by the NPEA?

The NPEA applies to all “persons, firms, associations, corporations, and the Navajo Nation and all of its agencies and instrumentalities, who engage the services of any person, whether as employee, agent, or servant.”  Additionally, it applies to “[a]ll employers doing business within the territorial jurisdiction [or near the boundaries of] the Navajo Nation, or engaged in any contract with the Navajo Nation.”  The law applies to all covered employers regardless of the size of the employer, the nature of the employer’s business, or the number of individuals employed.  

Who Has Rights Under the NPEA?

The NPEA protects traditional employees, and not independent contractors.  Some of the rights under the NPEA apply only to enrolled members of the Navajo Nation (e.g., the right to priority preference for employment opportunities), some rights apply to certain spouses of enrolled members of the Navajo Nation (e.g., the right to secondary preference for employment opportunities), and some rights apply to all employees regardless of Tribal affiliation (e.g., the right to a workplace free from prejudice and the right to written notice and just cause to support adverse employment actions).

What Are the Main Substantive Rights Under the NPEA?

As amended, the NPEA requires that all employers must:

1. Give preference in employment to Navajos and, in certain cases, spouses of Navajos.  

2. File a written Navajo affirmative action plan and quarterly reports with the Office of Navajo Labor Relations (ONLR).  

3. Include and specify a Navajo employment preference policy statement in job announcements, advertisements, and employer policies.

4. Post in a conspicuous place on the employer’s premises a Navajo preference policy notice prepared by the ONLR.

5. Modify all seniority systems so that they comply with the NPEA.

6. Utilize Navajo Nation employment sources and job services for employee recruitment and referrals except when a current Navajo employee is selected for the position.

7. Advertise and announce all job vacancies in at least one newspaper and radio station serving the Navajo Nation except when a current Navajo employee is selected for the position.

8. Use non-discriminatory job qualifications and selection criteria.  

9. Not penalize, discipline, discharge, or take any adverse action against any employee without just cause and written notice of such cause.

10. Maintain a safe and clean working environment and provide employment conditions that are free of prejudice, intimidation, and sexual harassment.

11. Provide training as part of its affirmative action plans or activities.

12. Provide cross-cultural programs as part of its affirmative action plans, focusing on the education of non-Navajo employees regarding the cultural or religious traditions or beliefs of Navajos.

13. Ensure that fringe benefit plans, sick leave programs, and other personnel policies do not discriminate against Navajos in terms or coverage as a result of Navajo cultural or religious traditions or beliefs. 

14. Establish written necessary qualifications for each employment position in the work force and provide a copy of the qualifications to all applicants when they express an interest in the position.

15. Provide reasonable accommodations to certain persons with disabilities.

16. Ensure that transaction documents such as contracts acknowledge the NPEA.

17. Refrain from retaliating against persons who have opposed an NPEA-related practice or exercised rights under the NPEA.

18. Under a separate law but which incorporates certain aspects of the NPEA, ensure that working mothers have opportunities to breastfeed their infant children or use a breast pump in the workplace.

Preference in Employment for Navajos and Non-Navajo Spouses of Navajos

One of the most important aspects of the NPEA is the requirement that employers give preference in employment to Navajos and, in certain cases, spouses of Navajos.  Specifically, the law requires that irrespective of the qualifications of any non-Navajo applicant, a Navajo applicant who demonstrates the necessary qualifications for an employment position must be selected by the employer for hiring, promotion, recall, and other employment opportunities.  Among a pool of applicants who are solely Navajo and meet the necessary qualifications, the Navajo with the best qualifications must be selected or retained.  In the case of reductions-in-force, Navajo employees who demonstrate the necessary qualifications for a position must be retained until all non-Navajos are laid-off, and a Navajo who is laid-off has the right to displace a non-Navajo in any other employment position for which the Navajo is qualified.     

A non-Navajo who is legally married to a Navajo and can provide proof in the form of a valid marriage certificate is entitled to secondary employment preference if he or she has resided within the Navajo Nation for a continuous one-year period immediately preceding the employment consideration.  This preference is secondary in that it merely provides the non-Navajo spouse with preference over other non-Navajos.

Just Cause and Written Notice of Adverse Actions

Another important aspect of the NPEA, and one that has generated a significant amount of litigation, is that employers are prohibited from disciplining, discharging, or taking any adverse actions against employees without just cause and written notice citing such cause.  The term “adverse action” is not defined in the NPEA.  From the statutory context and case law, it can be inferred that adverse actions include employment terminations, demotions, pay reductions, and other disciplinary actions that have a tangible, negative effect on a person’s ongoing employment.  By contrast, the termination of employment due to the expiration of a term contract that lacks an automatic renewal provision is generally not an adverse action because the employer has not taken an affirmative “action” to end the employment.

To take a lawful adverse action against an employee, the employer must have just cause and provide the employee with contemporaneous written notice of the just cause.  “Just cause” is determined on a case-by-case basis in which consideration is given to a variety of factors to determine whether there was sufficient basis for the employer to take the action.  For example, the Navajo Nation Supreme Court has stated that “ordinarily a violation of a clear rule set out in a personnel manual for which termination is a result of non-compliance is ‘just cause.’”  Smith v. Navajo Nation Department of Head Start, 8 Nav. R. 709, 715 (Nav. Sup. Ct. 2005).

Next, the employer must provide the employee with written notice of the just cause.  The Navajo Nation Supreme Court has explained that the notice must state in clear and meaningful language the adverse action being taken and the just cause supporting the adverse action.  The notice must include a sufficient description of facts so that the employee can understand the reasons for the adverse action and challenge the adverse action.  Finally, the notice must be provided to the employee contemporaneously with the adverse action.

Enforcement of Rights Under the NPEA

Individuals who believe their rights under the NPEA have been violated may file a Charge with the ONLR.  The ONLR may also file Charges on its own initiative.  Charges must be filed within one year after the accrual of the claim.  The ONLR is required to investigate the Charge to determine whether there is probable cause to believe the NPEA was violated.  Within 180 days of the filing, the ONLR must make a determination, which might include dismissal for lack of probable cause or a determination that probable cause exists.  In either event, the ONLR issues a “right to sue,” giving the charging party the right to initiate proceedings by filing a Complaint with the Navajo Nation Labor Commission (NNLC).  The Complaint must be filed with the NNLC within 360 days following the date on which the Charge was filed.

The NNLC conducts evidentiary hearings, issues decisions as to whether the NPEA has been violated, and if violations are found, award relief to the complaining party.  The complaining party has the burden of proving by a preponderance of the evidence that the employer violated the NPEA.  Decisions of the NNLC may be appealed to the Navajo Nation Supreme Court, and NNLC decision may be enforced in the District Courts of the Navajo Nation. 


Through its exercise of sovereignty and law-making authority, the Navajo Nation enacted the NPEA to, among other things, expand employment rights and better the economic situation of the Navajo people.  The law is both important and heavily litigated.    As such, it is important that employers and employees, as well as those who are considering doing business on the Navajo Nation, have an understanding of the law.

Additional Resources

The Office of Navajo Labor Relations

The Twenty-Fifth Anniversary of the Navajo Preference In Employment Act: A Quarter Century of Evolution, Interpretation, and Application of the Navajo Nation’s Employment Preference Laws, by Howard L. Brown and Honorable Justice Raymond D. Austin, 40 NEW MEXICO LAW REVIEW 17 (2010).

The Navajo Preference in Employment Act: A Review and Update of Cases and Rules,2010-2012, by Howard L. Brown and Honorable Justice Raymond D. Austin, 43 NEW MEXICOLAW REVIEW 397 (2013).

Applying Navajo Employment Laws to State Public School Districts on the Navajo Nation, in INSIDE THE MINDS: EMERGING ISSUES IN TRIBAL-STATE RELATIONS, 2014 ed., by Howard L. Brown (Aspatore Books, a Thomson Reuters business, June, 2014).

AWD LAW® is an expert legal team with specialties in Business Law and a wide array of other legal matters.