Sometimes U.S. employment laws apply to U.S. citizens who are working abroad, and sometimes they don’t. HR should know when these laws apply “extraterritorially,” as well as when U.S. law and non-U.S. law are at odds.
When U.S. citizens work for a U.S. company or subsidiary abroad, they are protected from discrimination under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA) and the Americans with Disabilities Act (ADA).
The Fair Labor Standards Act, the Family and Medical Leave Act, the National Labor Relations Act, the Occupational Safety and Health Act and state laws have no extraterritorial application, said Erika Collins, an attorney with Faegre Drinker in New York City.
“We are fortunate in the U.S. because our laws are quite clear as to when and whether they have extraterritorial application,” she said. Foreign laws often do not address extraterritorial application.
Who Isn’t Covered
In general, non-U.S. citizens aren’t covered in these cases. For example, the extraterritorial application of anti-discrimination laws does not apply to green card holders working abroad for a U.S. company, Collins said.
As for foreign individuals working or applying to work within the U.S., the 4th U.S. Circuit Court of Appeals has held that a foreign employee’s work within the U.S. must be more than minimal to be protected by U.S. anti-discrimination laws. The 4th Circuit has refused a claim that mere submission of a resume by a non-U.S. citizen, who had no authority to work in the U.S., for work entirely in the U.S. gave the individual the right to sue under the ADEA, noted Kourosh Jahansouz, an attorney with Duane Morris in Palo Alto, Calif. The plaintiff’s interpretation of the statute would extend ADEA coverage to millions of foreign nationals who file overseas applications for U.S. employment, exponentially increasing the number of lawsuits in U.S. courts, he explained.
Another federal appeals court declined to hold that a two-month training program in the U.S. of a non-U.S. citizen hired by a U.S. company qualified the individual for coverage, Jahansouz said. The District of Columbia Circuit noted that the employee’s primary place of work was in a foreign country. His employment letter stated the foreign country as such, he was classified as long-term staff in a foreign country, and he resided and worked in the foreign country during his employment.
However, Jahansouz cautioned that “in some cases, these anti-discrimination laws may apply to non-U.S. citizen employees.”
In one district court case, 10 foreign nationals who were not hired by a U.S. airline to work as flight attendants based out of London sued, arguing the ADEA and Title VII applied to them. The court noted that the ADEA and Title VII had been amended to apply to U.S. citizens employed in a foreign country but did not apply to foreign nationals in a foreign country.
“The question remaining was whether the foreign nationals were, in fact, employed in a foreign country or in the United States,” Jahansouz said. The foreign nationals argued their employment should be considered within the U.S. because, as flight attendants, they would regularly fly into and out of U.S. destinations. The court found, however, that the plaintiffs would have spent most of their work time in international airspace and only 20 percent of their work time within the U.S. The court concluded that the position must be considered extraterritorial and denied the foreign nationals coverage.
The implication of the case, nonetheless, was that “if the plaintiffs had shown sufficient work within the United States, the position may have lost its extraterritorial character and Title VII and the ADA could have applied even to these non-U.S. citizens based in a foreign country,” Jahansouz said.
Conflicting Foreign Law Defense
Sometimes, there is a conflict between U.S. law and non-U.S. law, Collins said. Employers might then invoke the conflicting foreign law defense.
In one case, a company employed helicopter pilots to fly over Mecca. “Saudi Arabian law prohibited the entry of non-Muslims into Mecca under penalty of death,” Collins said. “The company in Saudi Arabia accordingly instituted a requirement that all helicopter pilots be Muslim.” Normally, this would have violated Title VII, but in this instance the company didn’t violate the law because of Saudi Arabian law.
In another case, a company entered a collective bargaining agreement with unions representing employees in Munich, requiring all employees to retire by the age of 65. “The company was not in violation of the ADEA because the agreement was legally enforceable and breaching the agreement would have violated German law,” she said.
It’s best to have local legal advice available to ensure compliance with non-U.S. labor and employment laws, Collins added.
U.S. citizens usually are only a tiny percentage of U.S. companies’ workforces abroad.
“Comply with U.S. discrimination laws as to your overseas American employees specifically,” said Donald Dowling Jr., an attorney with Littler in New York City. “But don’t let the tail wag the dog; don’t extend U.S.-tailored compliance tools to foreign-based non-U.S. citizens who are not protected by U.S. law.”
Never transplant U.S. domestic HR policies straight out of a U.S. domestic employee handbook into a global code of ethics, he cautioned. Instead, adapt the policies for different international HR environments.