Mahoney v. RFE/RFL: an unexpected direction for the foreign laws defense.

AuthorWang, Thomas




    1. The Presumption Against Extraterritoriality

    2. Congressional Intent in Applying the ADEA

      and Title VII Extraterritorially

    3. Interpretation of Other Defenses to

      Anti-Discrimination Statutes

    4. The Foreign Compulsion Defense as Applied

      to Non-Employment Cases

    5. Application of the Foreign Compulsion

      Defense to Title VII Actions Arising Before


    6. The Facts of Mahoney

    7. The District Court Opinion

    8. The Decision of the Court of Appeals

    9. Critique of Mahoney's Reasoning V. INTERESTS AT WORK IN MAHONEY

    10. Foreign Compulsion in Mahoney

    11. Ways in Which the Works Council and the

      CBA are Like "Legislation"

    12. The German Government's Interest in

      Early Retirement

    13. The Difficulty of Renegotiating the

      Collective Bargaining Agreement VI. SUGGESTED INTERPRETATIONS OF THE



    14. Application of the Traditional Foreign

      Compulsion Defense to the Facts of


    15. Reasonableness Approach

    16. The Mahoney Standard VII. CONCLUSION


    Ordinarily, international custom is the primary source of international law.(1) In the realm of extraterritorial employment law, however, there is no body of customary international law because only the United States extends its employment laws to govern its nationals working abroad.(2) Without custom as a guideline, U.S. courts have been forced to develop this body of law on their own. In Mahoney v. RFE/RL. Inc.,(3) the D.C. Circuit Court of Appeals was faced with the task of defining the extraterritorial scope of Title VII(4) and the Age Discrimination in Employment Act (ADEA)(5) by interpreting the foreign laws exception to those statutes.(6) The foreign laws defense provides that U.S. companies hiring U.S. citizens abroad are not required to comply with the ADEA and Title VII where compliance with them "would cause such employer, or a corporation controlled by such employer, to violate the laws of the country in which such workplace is located."(7) Mahoney is the first decision to set standards for the foreign laws exception, and its interpretation unnecessarily limits protection against employment discrimination for U.S. citizens working abroad. With an increasing number of U.S. citizens working outside the country.(8) the increase in international trade and work, and the strong national interest in eliminating discrimination in the workplace. any unnecessary limitation on the protection against employment discrimination undermines a significant national interest in promoting fair employment practices.

    For those inclined to balance interests. the international labor arena presents a dizzying array of conflicting motivations: the interest in eliminating employment discrimination against U.S. citizens. the legitimate desire of foreign states to regulate their domestic workplaces, the potential for international disputes stemming from jurisdictional or cultural overreaching by the United States, the rational impulse of U.S. companies to avoid being caught in conflicting social and legal regimes, and the reluctance of U.S. courts to become involved in international policy making. This Note argues that the Mahoney court has not balanced the interests in this field so much as it has avoided making decisions affecting foreign policy, a role that courts have strived to avoid. As a consequence, the rule promulgated in Mahoney limits the protection of U.S. law even when there is no significant threat to international comity or foreign relations, which are the most important factors in the balancing of competing interests.

    Section II briefly traces the history of the extraterritorial application of U.S. law and the circumstances that led Congress to apply the ADEA and Title VII to U.S. citizens abroad. Section III surveys the policies served by the presumption against extraterritoriality, the foreign compulsion defense, and the construction of other defenses to the ADEA and Title VII. This analysis reveals the strongest interests in the equation, those that should be served by an interpretation of the foreign laws defense. Section IV considers the district court and court of appeals decisions in Mahoney, and Section V attempts to classify the facts of Mahoney to determine which interests were really at stake in that case. Section VI surveys several legal standards that could be used to determine when to limit the extraterritorial application of law, and concludes that the foreign compulsion defense. rather than the standard created in Mahoney, better addresses the interests involved. Finally, the Note concludes by suggesting one way in which these statutes might be amended to allow each branch of the government to make decisions that are better tailored to their respective roles.


    For two centuries, the U.S. Congress. U.S. courts. and commentators have struggled to determine under which circumstances to extend the reach of U.S. law beyond our national borders. Initially. the question was easily resolved by the Supreme Court's strict adherence to a jurisdiction limited by territoriality--the traditional notion that the law of a country cannot extend beyond its territorial boundaries.(9) Under such a scheme, Congress, whatever its intent, simply lacked the power to affect the employment relations of U.S. citizens working abroad. In Blackmen v. United States, the Supreme Court abandoned its strict adherence to territoriality and recognized that the nationality of an actor can serve as a valid basis for jurisdiction over disputes involving that actor.(10) In certain circumstances, the law of the actor's country may appropriately follow the actor abroad and serve as the legal standard to adjudicate disputes involving that party which occur overseas.(11) Today, international law recognizes that nations may permissibly exercise extraterritorial jurisdiction over disputes in which the state has an interest, so long as each state recognizes the duty not to interfere with the sovereignty and jurisdiction of other states.(12)

    Once the court determined that Congress had the power to make laws applying beyond the United States national boundaries, the question became one of statutory interpretation as to whether Congress had chosen to exercise its power to legislate extraterritorially in a particular statute. In keeping with its traditional stance, as expressed in American Banana, the Court crafted the so-called presumption against extraterritoriality" to apply U.S. law abroad and to respect the sovereignty of other countries. Under this doctrine. the court required a clear statement of congressional intent to apply a statute extraterritorially before wandering into "a delicate field of international relations."(13)

    U.S. courts used the presumption against extraterritoriality in refusing to apply the ADEA and Title VII to U.S. citizens working abroad. In Cleary v. United States Lines, Inc.,(14) a U.S. plaintiff filed an action with the Equal Employment Opportunity Commission (EEOC) after being fired by a U.S. corporation operating in England.(15) The court dismissed the suit for lack of jurisdiction, holding that the ADEA did not evidence the requisite intent to overcome the presumption against extraterritoriality.(16) Specifically, the court found that the absence of an "alien exemption" provision, as well as the absence of institutional apparatus for its enforcement outside the United States, suggested that Congress did not intend to apply the ADEA abroad.(17) Congress responded to this decision by amending the ADEA to apply extraterritorially.(18) At the time, it was commonly thought that, unlike the ADEA. Title VII was intended to apply extraterritorially.(19) Nonetheless, in Boureslan v. Arabian American Oil Co.,(20) the Supreme Court held that Congress had not expressed the requisite intent to overcome the presumption against extraterritoriality.(21) In its opinion, the Court invited Congress to amend Title VII to clearly state its intent to enforce it abroad.(22)

    In 1991, Congress accepted the Court's invitation.(23) However, Congress limited the jurisdictional scope of Title VII, like the ADEA, to U.S. workers working for U.S. companies. and not to foreign nationals hired by U.S. corporations. or U.S. citizens hired by foreign companies.(24) To further restrict extraterritorial application, Congress inserted the "foreign laws exception" into both provisions.(25) While courts and commentators have differed on the proper role of the "foreign laws" defense in extraterritorial discrimination actions, it is clear that the protection of the ADEA and Title VII can only extend as far as the defense will allow them.


    1. The Presumption Against Extraterritoriality

      "The history of the extraterritorial application of U.S. labor standards, as applied to overseas U.S. citizens, is the history of a canon of interpretation known as the presumption against extraterritoriality."(26) The primary objective of the presumption against extraterritoriality was to respect principles of international comity and to remove the judiciary from delicate international disputes that could be the source of discord.(27) In Murray v. Schooner Charming Betsy,(28) the Supreme Court announced a rule of judicial construction that U.S. legislation "ought never to be construed to violate the law of nations if any other possible construction remains."(29) The Court's reluctance to interfere in the internal legal affairs of foreign nations is reflected in its statement that the U.S. government would intervene on behalf of a U.S. citizen abroad if that citizen were oppressed without having violated any foreign domestic law.(30) If the U.S. citizen were oppressed by the operation of another...

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