The Federal Enclave Doctrine: A Potentially Powerful Defense To State Employment Laws

The U.S. Constitution provides that the federal government has exclusive legislative rights over certain federal territories - such as military bases, courthouses, and other official properties - if a state consents to the purchase of the territory. These territories are known as "federal enclaves." In practical terms, the federal enclave doctrine provides a little known, but potentially powerful, defense for employers that perform work in federal enclaves because often only federal law will apply in those locations. The application of federal law to work performed in federal enclaves is significant because state employment laws may give rise to more plaintiff-friendly remedies and longer statutes of limitations than their federal counterparts. Significantly, the doctrine has been recognized to preclude state law wage and hour class actions. In addition, because the doctrine gives rise to federal law claims exclusively, it may form the basis to remove a lawsuit from state to federal court.

This article provides an overview of the federal enclave doctrine, including practical considerations for the employment law practitioner.

What Is a Federal Enclave?

A federal enclave is territory, transferred by a state through cession or consent to the United States, over which the federal government has acquired exclusive jurisdiction. Once the federal government exerts exclusive jurisdiction over a territory, it can choose whether state or federal law will govern. The source of the federal enclave doctrine is article I, section 8, clause 17 of the U.S. Constitution, which provides that:

Congress shall have power . . . to exercise exclusive Legislation in all Cases whatsoever over such District[s] . . . as may, by Cession of particular States . . . become the Seat of the government of the United States, and to exercise like authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, Dock-Yards, and other needful Buildings.1

Federal enclaves thus include some federal courthouses,2 military bases,3 federal buildings,4 and national forests and parks.5 Importantly, not all federal territories are federal enclaves.

In order for a territory to be considered a federal enclave, the federal government must have purchased the territory "by the Consent of the Legislature of the State." If it did not, then the United States and, by implication, a private employer working on the federal property, does not obtain the benefits of the federal enclave doctrine. Instead, its possession is one of an "ordinary" proprietor, and state law will apply.6

In litigation, determining whether a federal territory is a federal enclave can be a time and fact-intensive undertaking. Given the sheer volume of federal territories in the United States and the dearth of case law addressing each territory, a party will often need to conduct this unconventional research from scratch. Such research might include digging through old deeds or sifting through old court records to determine whether the federal government in fact procured the property. Moreover, a party must also locate the state statute consenting to the purchase by the United States. The source of this information can vary, ranging from a deed of purchase to an opinion letter from the state's attorney general explaining that the property at issue was ceded to the federal government and consented to by the state's general assembly.7

How to Determine Which State Laws Are Preempted

After establishing that a federal territory is a federal enclave, the next question that must be answered is: which state laws are preempted? The general rule is that: (1) a state law that was enacted before the cession continues to apply unless Congress states otherwise;8 and (2) state law that was enacted after the creation of the enclave does not apply to the enclave.9 As described more fully below, there are three notable exceptions to this general rule.

First, state law is not preempted if the state had, at the time of cession, expressly reserved the right to legislate over the matters at issue.10 Second, minor regulatory changes to state programs that existed at the time of cession are not preempted "provided the basic state law authorizing such control has been in effect" since the time of cession.11 Finally, federal enclaves are not shielded from state law if Congress provides "clear and unambiguous" authorization for such state regulation over its federal enclave.12

Therefore, it is necessary in this step of the analysis to determine the date upon which the land in question became a federal enclave, as well as the date upon which the state law at issue was enacted. If the alleged claim is borne from the common law, rather than statutory law, the same analysis will still apply13 The date upon which the territory became a federal enclave may be determined through a deed of purchase or other court record, while traditional statutory research might provide the date on which the state law was enacted. If the state law was enacted after the territory became a federal enclave, the state law will not apply. By contrast, if the state law was already in existence, the general rule, as noted, is that the state law will apply.

The U.S. District Court for the Eastern District of New York's decision in Sundaram v. Brookhaven National Laboratories14 provides a good example of this principle. There, the issue was whether New York's state anti-discrimination statute applied to the laboratory. As a threshold matter, there was no dispute that the land on which Brookhaven National Laboratories sat was a federal enclave because the United States purchased the property from the State of New York on July 17, 1933, in a transfer signed by the governor and authorized by the state legislature. Because neither the New York Human Rights Law nor the New York Civil Rights Law was enacted before July 17, 1933, the Sundaram court held that the state anti-discrimination laws did not apply to the Brookhaven National Laboratories. In addition, the court held that the plaintiff's two common law claims - breach of contract based upon an employee handbook and a tort for unlawful discharge - also did not apply because those claims were not recognized by New York courts until well after 1933.

What Are the Exceptions?

There are three...