EXTRATERRITORIAL APPLICATION OF U.S. EMPLOYMENT LAWS
By:
Tarig Anani
New York
Normally, there is a strong presumption against the extraterritorial application of U.S. law. In the area of employment law, however, many statutes have broad extraterritorial application. The primary effect of this extraterritorial scope is that U.S. companies, universities and other entities operating abroad must comply with various non discrimination laws and affirmative action requirements. Some U.S. employment laws apply extraterritorially if the employee in question is a U.S. citizen, while others apply extraterritorially if the employee was recruited in the United States, regardless of whether he is a U.S. citizen (and may not apply if the employee is a U.S. citizen but was recruited abroad for work abroad). Finally, some of these laws contain a conflict of laws clause, stating that they will not apply if they are in conflict with local law, thereby requiring an examination of foreign law to decide whether or not a particular U.S. law applies. The following is a partial list of U.S. employment laws that, under certain circumstances, apply extraterritorially. Executive Order No. 11,246. Executive Order No. 11,246 applies to "government contractors and subcontractors." The Order prohibits discrimination on the basis of race, color, religion, sex, or national origin and contains affirmative reporting requirements to ensure compliance. The Executive Order applies extraterritorially to U.S. employers that hire employees in the United States but does not apply abroad if no employees are recruited in the United States.
Veteran's Readjustment Assistance Act ("VRAA"). The VRAA also applies to government contractors and subcontractors. It prohibits discrimination against Vietnam and other veterans, and requires affirmative action to employ such veterans. The VRAA applies extraterritorially to the same extent as Executive Order No. 11,246.
Title VII of the Civil Rights Act of 1964, as amended. Title VII applies to all U.S. employers. It prohibits discrimination on the basis of race, color, religion, sex, or national origin. Title VII affords extraterritorial protection to U.S. employees who work for a U.S. employer. However, it does not apply extraterritorially to non-U.S. employees. Title VII also contains a conflicts clause which makes it inapplicable extraterritorially if compliance with Title VII would force the employer to violate the law of the host country.
The Age Discrimination in Employment Act ("ADEA"). The ADEA applies to all U.S. employers. It prohibits discrimination against persons who are 40 years of age or older, with no upper age limit. As with Title VII, extraterritorial application is limited to employees who are U.S. citizens.
Title VI of the Civil Rights Act of 1964. Title VI applies to all programs and activities receiving federal financial assistance. It prohibits discrimination based on race, color, or national origin. Extraterritorial application is limited by the proviso "no person in the United States." The term "program or activity," however, is defined broadly, such that if some operations are conducted in the United States and others are conducted abroad, the entity as a whole may be subject to the non discrimination requirements of Title VI. Furthermore, recruitment within the United States is always subject to the requirements of the Title VI, even when the employee is recruited for an overseas position.
Title IX of the Education Amendments of 1972. Title IX applies to education programs receiving federal financial assistance. It prohibits discrimination on the basis of sex. The language of the statute suggests that it applies only to graduate students, but the U.S. Supreme Court has ruled that employees are also covered. Like Title VI, Title IX contains the proviso "no person in the United States." Title IX nevertheless has some extraterritorial application because most universities which are receiving federal financial assistance either have their primary campus in the United States or recruit students and faculty in the United States. Thus, for example, a U.S. university with a summer program in Europe may not discriminate on the basis of sex in its summer program.
The Americans with Disabilities Act ("ADA"). The ADA applies to U.S. employers with more than 15 employees. It prohibits discrimination against the disabled and mandates "reasonable accommodation" of disabled employees unless an employer shows "undue hardship" in providing such accommodation. The ADA applies extraterritorially to U.S. citizens working for a U.S. employer in a foreign country. Like Title VII, the ADA contains a clause which makes it inapplicable if compliance would force the employer to violate the law of the host country.
The Rehabilitation Act of 1973. The Rehabilitation Act applies to programs or activities receiving federal financial assistance. Like the ADA, the Rehabilitation Act prohibits discrimination against the disabled. It contains the proviso "no otherwise qualified individual within the United States..." Nevertheless, the Act may apply extraterritorially in certain circumstances because "program or activity" is broadly defined. Thus, if one "program or activity" is located in the United States, all operations of the entity may be subject to the Act.
