## Facts

- Alaska enacted the Local Hire Under State Leases Act (“Alaska Hire”) to reduce in-state unemployment.
- The Act required certain state-related oil and gas instruments (including leases, pipeline rights-of-way, and related agreements) to include provisions mandating preferential employment of “qualified Alaska residents” over nonresidents.
- Alaska administered the preference through “resident cards” issued to individuals meeting statutory residency requirements.
- Hicklin and other job seekers, including nonresidents unable to qualify for resident status, sought employment covered by the Act but were ineligible for resident cards.
- Plaintiffs challenged the statute under the Privileges and Immunities Clause (Art. IV, § 2) and the Equal Protection Clause (Fourteenth Amendment).

## Issues

1. Whether the case became moot after the Alaska Supreme Court invalidated only the statute’s one-year durational residency requirement.
2. Whether Alaska’s resident hiring preference for covered oil and gas employment violated the Privileges and Immunities Clause of Article IV, § 2.
3. Whether the statute violated the Equal Protection Clause of the Fourteenth Amendment.

## Decision

- The case was not moot because some appellants still could not qualify as residents under the remaining statutory definition and continued to face discrimination.
- The Court unanimously reversed and held that Alaska Hire violated the Privileges and Immunities Clause.
- The Court did not rely on equal protection as an independent basis for the judgment.

## Legal Principles

- Article IV, § 2 protects nonresidents against state discrimination in fundamental economic activities, including pursuing a common calling.
- A state may discriminate against nonresidents only if it shows (1) a substantial reason for differential treatment, meaning nonresidents are a distinct source of the problem addressed, and (2) a close fit between the discrimination and the problem.
- General in-state unemployment, without proof that nonresidents are a distinct cause of that unemployment, does not justify exclusionary employment preferences.
- A broad resident preference that applies regardless of whether residents are unemployed or connected to the targeted labor market is invalid for lack of a close fit.
- A state’s asserted interest in benefiting from its natural resources does not eliminate Article IV limits when the state uses resource-related arrangements to mandate private-sector discrimination.

## Conclusion

The Court invalidated Alaska’s across-the-board resident hiring preference for oil and gas work tied to state leases because Alaska failed to show that nonresidents were a distinct cause of the unemployment problem and failed to limit the discrimination to measures closely related to that asserted harm.


Hicklin v. Orbeck, 437 U.S. 518 (1978)