Recent Development: Amenability of Foreign Corporations to United States Employment Discrimination Laws

Authors

Kevin C. Tyra

First Page

197

Abstract

As the Linskey court noted, the existence of employment exemption provisions in over thirty commercial treaties, if liberally construed, would create a loophole in Title VII enforcement. Given the ever-increasing number of United States employees of foreign-owned corporations, liberal treaty constructions could decrease the scope of Title VII.

Nevertheless, the effect on international commerce must be considered. Although equal employment opportunity is a laudable goal, this goal may conflict with the values of other cultures, as it did with the culturally-based organization and management philosophy of the C. Itoh Co. A more prudent approach to the problem of subsidiaries might have been to apply the NLRB integration test to United States subsidiaries so that subsidiaries that are closely linked in management with their parent corporations would be at least partially exempt from the application of Title VII to their employment of managerial personnel. Combining different types of parent-subsidiary relationships, the Spiess / Avigliano reasoning oversimplifies the problem.

These courts could also have interpreted the treaties more liberally. The courts reached a hasty conclusion that the treaty provisions were unambiguous, thereby circumventing State Department opinions on the matter, as in Avigliano. By narrowly construing the treaties, the courts breached existing international treaty obligations.

The ultimate effect of the decisions is expansion of the jurisdiction of United States employment discrimination law both to United States subsidiaries and to foreign parent corporations whose only contact with the United States may be their interest in the subsidiary. This will afford United States residents maximum protection against infringement of their civil rights and will effect the intent of Title VII. The decisions are, however, a possible springboard for judicial infringement of State Department treaty interpretation and of United States treaty obligations.

Recommended Citation

Kevin C. Tyra, Recent Development: Amenability of Foreign Corporations to United States Employment Discrimination Laws, 14 Vanderbilt Law Review 197 (1981)
Available at: https://scholarship.law.vanderbilt.edu/vjtl/vol14/iss1/6