Academic journal article Labor Law Journal

When Does a Foreign Law Compel a U.S. Employer to Discriminate against U.S. Expatriates?: A Modest Proposal for Reform*

Academic journal article Labor Law Journal

When Does a Foreign Law Compel a U.S. Employer to Discriminate against U.S. Expatriates?: A Modest Proposal for Reform*

Article excerpt

I. Introduction

A large U.S. multinational corporation announces a major joint venture in Saudi Arabia and strongly encourages certain employees to relocate there for three to four years. It could be a smart career move. It could be a terrific experience, both professionally and personally. The Saudi Government, however, refuses to process work visas for young, single women, openly homosexual employees, Jews, disabled employees, and all employees over the age of 50. Can the U.S. employer intentionally discriminate on the basis of gender, marital status, sexual orientation, religion, disability and age, by denying transfers to all employees on these protected bases? Unfortunately, despite Congress' amendments of Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act (ADA) in 1991, and the Age Discrimination in Employment Act (ADEA) in 1984,1 to provide for extraterritorial application of these landmark anti-discrimination laws, the answer is still unclear.

As the global economy continues to develop rapidly, more and more courts will grapple with the contours of the so-called "foreign compulsion" defense. Under what circumstances will U.S. multinational employers get a pass on intentional discrimination? Does the foreign law truly compel the U.S. employer to discriminate against U.S. citizens, or is the U.S. employer instead using this foreign law compulsion defense as a smokescreen to legitimatize discrimination? How well-defined must the foreign law be to compel such blatant discrimination? How hard must the U.S. employer push the foreign government before acceding to the discriminatory foreign law?

This Article analyzes the legislative history and some of the evolving case law interpreting the foreign compulsion defense to otherwise clear violations of Title VII, the ADEA and the ADA. Neither Congress nor the courts have pro- vided clear guidance to multinational employ- ers and expatriates as to when the "foreign laws" defense permits em- ployers to deny employ- ment opportunities to employees in protected classes. Such lack of clarity necessarily results in increased litigation expenses, not to mention strained foreign relations and other attendant social costs. This Article proposes a practical solution to help employers, employees and the courts determine when the foreign compulsion defense applies to immunize U.S. employers from liability under Title VII, the ADEA and the ADA. Congress ought to amend these three antidiscrimination statutes again to permit employers and employees to seek intervention by the U.S. Department of State in cases of conflict or perceived conflict between U.S. and foreign employment discrimination laws.

II. Analysis

A. Extraterritorial Application of U.S. Employment Antidiscrimination Laws (Title VII, ADEA and ADA)

To "protect against unintended clashes between our laws and those of other nations which could result in international discord," courts developed a "presumption" against extraterritorial application of U.S. law.2 For example, the Fifth Circuit majority in Boureslan v. Aramco, Arabian Am. Oil Co., 857 F.2d 1014, 1020 (5th Cir. 1988),3 noted the "strong countervailing policy arguments" against extraterritorial application of Title VII in a religious, race and national origin case brought by a naturalized U.S. citizen born in Lebanon who worked in Saudi Arabia. The majority acknowledged the reality that "the religious and social customs practiced in many countries are wholly at odds with those of this country."4 "Requiring American employers to comply with Title VII in such a country could well leave American corporations the difficult choice of ei- ther refusing to employ United States citizens in the country or discon- tinuing business."5 In addition to the "paucity of reference to such an [extraterritorial] application" of Title VII in the statute or its legislative history, the Fifth Circuit majority noted the "serious, potentially divisive policy considerations for and against application of [Title VII] outside the country. …

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