Volume 43 | Number 2 Spring 2008
The Result of Disparate Treatment of Third-Country Alien Employees in Multinational Enterprises: A Class Distinction
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II. Title VII in the United States and Its Protection to U.S. Citizens Abroad
Title VII was enacted in response to the civil rights movement and was intended to provide employees with legal protection against discrimination in the workplace.3 Specifically, Title VII provides protection from discrimination based on gender, race, or national origin.4
A. Sexual Harassment Under Title VII
Title VII does not make all harassment actionable;5 in fact, it does not even make every form of verbal harassment with sexual overtones actionable.6 Instead, Congress limited the scope of Title VII, focusing on discrimination arising from an imbalance and abuse of power against a “discrete and vulnerable group.”7 By enacting Title VII, Congress sought to stem the sense of degradation felt by victims attacked on the basis of their gender and sexuality.8 Thus, the intent of Title VII was both to ensure that victims of harassment did not feel degraded within their work environment and to provide a remedy under the law to protect the victim’s autonomy within the workplace.
B. Title VII’s Applicability to American Citizens Abroad
Title VII defines an employee as “an individual employed by an employer”9 and defines an employer as a person engaged in an industry affecting commerce who employs fifteen or more people.10 Within the United States, therefore, the term “employee” could be construed as anyone who works for another person, regardless of United States citizenship.11 Every employee working for an employer in the United States is extended the same Title VII protections, and every employer must adhere to the Title VII policies or risk action by the Equal Employment Opportunity Commission (EEOC).12
Following the enactment of Title VII, the courts generally construed the definition of an employee to include any American individual, in any country, employed by an American employer.13 In 1991, however, the Supreme Court dramatically changed the definition of an employee for purposes of Title VII with its decision in EEOC v. Arabian American Oil Co. (“Aramco”).14
The petitioner in Aramco, Boureslan, was transferred at his request to Saudi Arabia.15 He worked for Aramco for four years in Saudi Arabia and was discharged in 1984. Boureslan filed charges of discrimination with the EEOC and instituted his suit in the Southern District of Texas, seeking relief under both state law and Title VII. The district court dismissed his claim, ruling that it lacked subject matter jurisdiction because Title VII did not apply to U.S. citizens employed abroad by American employers.16
Boureslan appealed the decision, and the Supreme Court upheld the district court’s ruling. While the Court agreed that the statutory definition of employee could be construed differently, the Court ruled that Congress did not intend for Title VII to apply to workers overseas for Congress had not specifically stated that Title VII applied to workers located in other countries.17 Under general principles of American jurisprudence, federal law is interpreted to apply only within the boundaries of the United States unless Congress expresses its clear intention to the contrary.18 The Supreme Court’s decision caused uproar both in Congress and among employers. The meaning of the statute, as it had been interpreted by the lower courts, was changed and the statute no longer extended protections to Americans abroad.
C. Amendments to Title VII
As a direct response to the Aramco decision, Congress amended Title VII (and the Americans with Disabilities Act) to reflect its intent that Title VII apply extraterritorially.19 The amended definition of employee under Title VII states that, “[w]ith respect to employment in a foreign country, such term includes an individual who is a citizen of the United States.”20 If these amendments to Title VII had been made prior to the Aramco decision, Boureslan would have had standing to bring his cause of action in the United States. But while the new statutory definition of employee extended the protections of Title VII to American citizens working abroad, it also raised questions about extraterritorial application of the law to foreign employees working for American employers abroad.
One of the leading cases addressing the applicability of Title VII to aliens working for American companies abroad is Shekoyan v. Sibley International Corp.21 In Shekoyan, an employee who was not a U.S. citizen was denied protection from discrimination under Title VII while working for an American employer overseas.22 The court held that Congressional intent on this issue was made clear by the failure of Congress to include such employees in the amended definition of employee under Title VII.23 As the court interpreted the statute, “[t]itle VII will only have an extraterritorial application when: (1) the employee is a United States citizen and (2) the employee’s company is controlled by an American employer.”24
D. Title VII’s Applicability to Choice-of-Law Issues and Aliens Working for an American Employer Outside of the United States
The Congressional amendments to Title VII provided increased protection abroad to U.S. citizens working for American companies while denying protection to alien employees working overseas, even though these employees would have been protected had the acts had occurred within the United States. Title VII’s application within the United States extends to all employees, including aliens.25 In fact, one form of discrimination prohibited by Title VII is discrimination on the basis of national origin.26
1. Choice of Law
Title VII’s lack of coverage for aliens that work for American MNEs in foreign countries creates a choice of law problem when an alien employee desires to file suit against her company. An alien who wishes to file suit against her employer must determine which potential remedies exist, and identify where those remedies might come from. When the courts evaluate a legal claim, the general rule pertaining to choice of law is that the rule of the law of the country in which the tort was committed controls.27 If the conduct occurred in the United States, there would be sufficient minimum contacts to allow for the territorial jurisdiction in United States courts. In the case of a foreign plaintiff, a court in the United States may dismiss the case on the basis of forum non conveniens, or because the case is not in the proper forum. However, several criteria must be met before a court will grant a dismissal for forum non conveniens.
The initial inquiry made by the court hearing a claim asks what degree of deference should be given to the plaintiff’s choice of forum.29 In the United States, there is a strong presumption in favor of the plaintiff’s choice of forum.30 Because the plaintiff is the person instituting the lawsuit, the courts generally defer to the plaintiff’s choice of forum unless private and public interest factors clearly show that the forum is inappropriate.31 At the same time, the courts generally give less weight to a foreign plaintiff’s request to proceed with a lawsuit in United States courts.32
Once the court has determined the degree of deference it is willing to give to the plaintiff’s choice of forum, the court must administer a two-pronged test. The first prong asks whether there is an adequate and available alternative forum.33 If an alternative forum exists, but the remedy available in that forum is unsatisfactory, the other forum may not be an adequate alternative, and the case should not be dismissed under forum non conveniens.34 In the hypothetical situation described in the Introduction, a court might choose to dismiss the Mexican worker’s claim under the first prong because a remedy is available to the plaintiff in the Chinese courts. However, if the court does not believe that the remedy available in the Chinese courts is adequate based on, for example, the Chinese courts’ response to sexual harassment, the court could move on to the second prong of the test.
The second prong of the test requires the court to balance private and public interest factors.35 Essentially, if the forum interest is sufficient, the case will be heard by the forum court. Because a United States court likely has a sufficient interest in an American company’s harassment of a foreign national, a sexual harassment case filed by an alien employee of an American MNE could be heard in the United States. But the determination of whether to allow the case to proceed in the United States would be up to the court’s discretion.
If the court allows the plaintiff’s case to proceed, the only remedies available will be in tort. Thus, Mexican workers can bring suits in the United States in either federal or state court for torts committed abroad, but such workers are not covered by Title VII.36 Accordingly, any claim brought under Title VII will be barred. For instance, if a worker alleged assault or intentional infliction of emotional distress, the claim may be heard.37 But if the employee alleged sexual harassment in violation of Title VII, the employee’s claim would be dismissed. Termination on the basis of sex discrimination could be the basis for an action of wrongful discharge in violation of public policy.38
Even if the MNE consented to the application of Mexican law, the case could still be barred under forum non conveniens. Moreover, as Mexican law is different than U.S. law, the U.S. court may dismiss some claims which would have merit had they been brought under Title VII.40
As the law currently stands, the Mexican worker faces many obstacles in bringing a claim in the United States under Title VII. The clearer way of dealing with these problems is to extend Title VII to workers from third-party countries.
2. Applicability to Foreign National Employees
A major problem with the amendments to Title VII is that they provide a foreign national working in the United States with a remedy if the employee is harassed, but they leave a foreign national working for an American company abroad without a remedy, even though she suffered the same injury. If an alien employee were sexually harassed in South Carolina, Title VII would apply. However, if an American employer were to sexually harass an alien employee in China, the amended Title VII would not provide the alien employee with the same protection, and she would be forced to find an alternative, perhaps inadequate, forum and remedy.