Chickens Come Home to Roost: Have American Treaties Fenced off Some of Our Best Jobs from Americans?

By Gottesman, Michael H. | Law and Policy in International Business, Spring 1996 | Go to article overview

Chickens Come Home to Roost: Have American Treaties Fenced off Some of Our Best Jobs from Americans?


Gottesman, Michael H., Law and Policy in International Business


The worm has turned, the pendulum swung, the chickens come home to roost. The bully is hoist on his own petard, there to suffer his just desserts. Our language abounds in metaphors reflecting our delight in David-and-Goliath stories, in which underdogs rise up to bite their oppressors.

Here's one such story you may not find so delightful. The United States, the only healthy economic power in the aftermath of World War II, wrung from the rest of the world a set of friendship, commerce, and navigation treaties (FCN Treaties) entitling corporations of one country to operate businesses in the other on equal footing with local companies and providing these corporations with the right to employ key personnel "of their choice." For a while, Americans disproportionately reaped the benefits of this deal, just as expected. Americans operated many businesses overseas, while foreigners operated relatively few in the United States.(1) But then the economic pendulum swung. Now, vast numbers of foreign companies operate on U.S. soil.(2) Many of these companies assert that the treaty entitles them to reserve the top jobs for their own citizens.

In an era in which the United States is struggling, in the words of its President, to find "good jobs at good pay,"(3) Americans are finding that an ever-increasing number of the best jobs are fenced off, reserved for foreigners. Adding insult to injury (if you'll suffer just one more metaphor), this exclusion must be tolerated even though, years after negotiation of the treaties, the United States enacted sweeping civil rights laws designed to assure "equal employment opportunities" for all Americans. It is said that the treaties' commitment that foreign companies may employ key personnel "of their choice" takes precedence over the commands of Title VII of the Civil Rights Act of 1964, as amended.(4)

That is the thesis of an article recently published in Law and Policy in International Business.(5) That is also the view that has been accepted, more or less, by the lower federal courts. The courts differ, to be sure, about exactly what bites out of Title VII are compelled by the treaties, but they generally hold that Title VII must be subordinated, at least in some respects, to honor the promise that foreign companies can employ certain key employees of their choice.(6)

I disagree. The United States may have been a Goliath in negotiating the post-war FCN treaties, but the foreign companies asserting the right to xenophobic preference for their own citizens are undeserving Davids. The United States' purpose in demanding the "of their choice" provisions in the FCN treaties was to escape local laws that would restrict the labor pool from which an employer could select its key personnel-in particular, laws that required the hiring of local citizens even if they were not the best qualified candidates. In negotiating the treaties, the United States was not seeking to monopolize the best jobs overseas for U.S. citizens but simply to assure that its companies operating overseas could hire the best qualified personnel wherever they might be citizens.

By contrast, the revenge that the formerly oppressed wish to visit on U.S. workers is nastier stuff: an entitlement to favor their own citizens for xenophobic reasons unrelated to merit. Ironically, the very "us-first" mentality that the United States was fighting against in negotiating the treaties (country X can't reserve jobs in its own territory for its own citizens) is now claimed to be the core of the right the treaty conferred (corporations of country X can reserve jobs in the United States for country X's citizens).

The courts' subordination of U.S. workers' legal rights in response to this claim is wrong on two levels. First, it is based on a misapprehension as to the true purpose of the "of their choice" provisions in the post-war FCN treaties. Second, even if it were not, it accepts too casually the proposition that these earlier-adopted treaties should take precedence over the later-enacted Title VII's ban on employment discrimination. …

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Chickens Come Home to Roost: Have American Treaties Fenced off Some of Our Best Jobs from Americans?
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