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Article: When Does Foreign Law Compel US Employer to Discriminate
March 20, 2009 by Ross Runkel at LawMemo
A new article by Littler Mendelson lawyer Tyler M. Paetkau raises a number of issues relating to the “foreign compulsion” defense to claims of intentional discrimination. The concept is that a US employer can discriminate against its employees with regard to transfers to certain foreign countries in order to avoid violating the laws of those foreign countries.
When Does a Foreign Law Compel a U.S. Employer to Discriminate Against U.S. Expatriates?: A Modest Proposal for Reform identifies flaws in the law and inconsistencies in its interpretation, and makes a sensible proposal for reform.
You can get a taste from the 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 and the Americans With Disabilities Act (“ADA”) in 1991, and the Age Discrimination in Employment Act (“ADEA”) in 1984, to provide for extraterritorial application of these landmark antidiscrimination 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 provided clear guidance to multinational employers and expatriates as to when the “foreign laws” defense permits employers to deny employment 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.
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