Federal Enclave Doctrine -- Sometimes State Wage and Hour Claims are Barred

“If any one proposition could command the universal assent of mankind, we might expect it would be this -- that the Government of the Union, though limited in its powers, is supreme within its sphere of action.”

--U.S. Supreme Court Chief Justice Marshall in the famous case of M’Culloch v. Maryland.

Some federal lands are exempt from state law regulations because of the way the Federal Government acquired the property. These lands are called federal enclaves. That means that federal law, or perhaps only the law of the state as it existed when the state ceded jurisdiction over the lands to the Federal Government, will apply. By this we mean, for example, that state wage and hour laws, recently enacted or rules promulgated thereunder, will not apply to certain federal properties. An example of that is Vandenberg Air Force Base where the California minimum wage, overtime break period, meal period and other state labor laws generally do not apply. Notably, it has been said that no new federal enclaves have been created since World War II, so any recently acquired or leased federal properties since then are not enclaves. As for the status of older properties, that is a subject of inquiry or research into the land records.   

The federal enclave doctrine stems from Article 1 of the Constitution (the so-called Supremacy Clause) granting Congress exclusive jurisdiction over lands purchased by the Federal Government for the “erection of forts, Magazines, dock-yards, and other needful buildings.” Article 1 § 8, Cl. 17. This doctrine can be used as a defense in litigation that arises out of events occurring on a federal enclave.  The doctrine has developed over the past 100 years and currently represents a challenge for states attempting to regulate land ceded to the federal government. It also presents a barrier to the plaintiff’s bar in bringing state labor-related claims against employers working on certain federal properties.

A federal enclave is created when a state cedes land and jurisdiction to the federal government freely or as part of a sale. If land is only rented by the federal government or if the land has been returned to the state, then the doctrine does not apply.

What is the scope of the enclave doctrine? The laws that govern the land depend on the circumstances around the property when it transferred hands. If the state law was a cause of action at the time the land was ceded, then the law will apply to actions arising on the enclave. If the laws were created after the cessation of land, then the new laws only apply if they are ‘adopted’ by Congress. Alternatively, the states can reserve jurisdiction over an area of law, and if the regulation falls within that area of law then the state will have jurisdiction. However, the Supreme Court has said that the reservation of jurisdiction and the application of state law must not conflict with the Federal Government’s use of the land. James v. Dravo Contracting Co., 302 U.S. 137, 147(1937).

The best option for a plaintiff in an employment cause of action to overcome the federal enclave doctrine is to claim that the state law existed before the establishment of the enclave, or that Congress has expressed specific intent to allow the state to exercise concurrent jurisdiction in the area. To exercise the former, the state law must predate the enclave. Then if the state law does not violate the Supremacy Clause it will govern the claim. The second option is more complicated. If Congress legislates that the land, or an appendage of the Federal Government is to be regulated under state law on that land, then the state has jurisdiction over the claim. Like in the District of Columbia, where Congress gave control over most of Washington, D.C. to the local government in the Home Rule Act of 1973, which showed a clear and unambiguous intent for local government to regulate the ceded land.

In times when the Government has not legislated with such clear language, courts look to current legislation to infer express grants of authority.  For example, a plaintiff in Puerto Rico claims that the SCA expressed congressional approval of the application of certain local wage and hours laws, the court interpreted this to mean that the claim arising out of employment benefits should be tried in state court. See Emily S. Miller, The Strongest Defense You’ve Never Heard: The Constitution’s Federal Enclave Doctrine and its Effect on Litigants, and Congress, 29 Hofstra Lab. & Emp. L.J. 73, 89 (2011). However, a court in New Jersey dismissed a minimum wage claim based because similar language in the SCA was not clear and unambiguous enough to mean clear Congressional authorization. Congress has made an effort to designate many state laws dealing with taxes, workers’ compensation, criminal cases (resulting in application of state law in federal courts where there was no federal law prohibiting the conduct), and some environmental regulatory efforts to apply on federal enclaves. See Leonora M. Schloss, The Federal Enclave Doctrine, Briefing Papers (Federal Pub. 2000).

If the cause of action arises out of events that take place on a federal enclave, it will be subject to the doctrine. Plaintiffs have attempted to avoid this by claiming that the cause of action occurred off of the enclave, like objecting to a firing decision and claiming the firing was decided at headquarters instead of in the enclave. Miller, Supra at 88. The courts have not favored these arguments and have taken a “substance over form” view of the facts to determine what the cause of action arises from.

The doctrine can be a valuable resource for those doing business on federal land because it allows, at the very least, removal to a federal court for many claims, and dismissal if the right of action is superseded by the Supremacy Clause. This can include many labor and wage and hour issues based on state law. If you are a federal Government contractor working on a military base, and you are sued for wage and hour violations under state law, one of the first due diligence steps you need to take is to figure out whether you are working on an enclave, and whether state law applies.

That is sometimes easier said than done. We had one client who said that the federal enclave was nothing but a rabbit hole where you jumped in but never found the bottom. It can be murky and frustrating to figure out. And, of course, the employer likely has the burden of proof to show the enclave exists in order to gain dismissal of the employee’s state based cause of action. There is a GSA List of Federally Owned or Leased Buildings with some helpful notations as to the acquisition status of various federal properties, and that may be a good starting point for the examination of the enclave doctrine. https://catalog.data.gov/dataset/inventory-of-owned-and-leased-properties.

Of course, this is the kind of issue that employers need to consult competent legal counsel to have better chance of getting it resolved in their favor. And counsel for the worker may need to review this before filing a state cause of action.