Petition for Writ of Certiorari — EEOC v. Arabian American Oil Co.

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3 OcTOBER TERM, 1989

EQUAL EMPLOYMENT OPPORTUNITY

N COMMISSION, PETITIONER

ARABIAN AMERICAN OIL Co., ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

KENNETH W. STARR

Solicitor General

JOHN R. DUNNE

Assistant Attorney General

JOHN G. ROBERTS, JR.

Deputy Solicitor General

STEPHEN L. NIGHTINGALE

Assistant to the Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 514-2217

CHARLES A. SHANOR

General Counsel

GWENDOLYN YOUNG REAMS

Associate General Counsel

VINCENT J. BLACKWOOD

Assistant General Counsel

SAMUEL A. MARCOSSON

‘Attorney

Equal Employment Opportunity Commission

Washington, D.C. 20507

QUESTION PRESENTED

Whether Title VII of the Civil Rights Act of 1964,

42 U.S.C. 2000e et sc., prohibits employment dis-

crimination outside the United States by an Amer-

ican corporation against an American citizen.

(1)

PARTIES TO THE PROCEEDING

The petitioner, which was granted leave to inter-

vene in this action while it was pending in the court

of appeals, is the Equal Employment Opportunity

Commission. The other parties are plaintiff Ali

Boureslan and defendants Arabian American Oil

Company and Aramco Services Company.

TABLE OF CONTENTS

Page

. ———ß—ß——8—7rß5ðv—ęꝗ᷑ 1

EL . 2

Statutory provisions involved 2

e .. 2

Reasons for granting the petiti(oo nn 5

r . 18

e 3 1a

V — 28a

ä 77a

o — 83a

rr 85a

V 86a

TABLE OF AUTHORITIES

Cases:

Alexander v. Gardner-Denver Co., 415 U.S. 36

EE re 16

Andrus v. Glover Constr. Co., 446 U.S. 608

ES 9

Argentine Republic v. Amerada Hess Shipping

Comm, 168 &. Ct. G68 (1968) ........................-........ 7

Benz v. Compania Naviera Hidalgo, S.A., 353 U.S.

ESS LL 11

Blackmer v. United States, 284 U.S. 421 (1932) .... 6

Brown v. Marsh, 777 F.2d 8 (D.C. Cir. 1985) 6

Bryant v. International Schools Servs., Inc., 502

F. Supp. 472 (D.N.J. 1980), rev’d, 675 F.2d 562

r ̃ wii 14

Cleary v. United States Lines, Inc., 728 F.2d 607

r ̃ 1X11... 12

Espinoza v. Farah Mfg. Co., 414 U.S. 86 (1973). 4, 10

Foley Bros. v. Filardo, 336 U.S. 281 (1949) 3, 6, 7, 8,11

Lavrov v. NCR Corp., 600 F. wad 923 (S.D.

a 14

Cases—Continued : Page

Love v. Pullman Co., 13 Fair Empl. Prac. Cas.

(BNA) 423 (D. Colo. 1976), aff'd, 569 F.2d

I ee i I ccndnscevisttinecneinentianannnnneins 14

McCulloch v. Sociedad Nacional de Marineros de

Murray v. Schooner Charming Besty, 6 U.S. (2

Honduras, 872 U.S. 10 (1963) 6, 7,11

DN I e 7

Pfeiffer v. Wm. Wrigley Jr. Co., 755 F.2d 554

ß x 12

Psimenos v. E. F. Hutton & Co., 722 F.2d 1041 (2d

CG 7

Seville v. Martin Marietta Corp., 638 F. Supp. 590

r daa nae chien 14

Steele v. Bulova Watch Co., 344 U.S. 280 (1952). 6, 7, 9

United States v. Aluminum Co. of America, 148

es fF LL Beene 6-7

Vermilya-Brown Co. v. Connell, 335 U.S. 377

hE aa ee eee AONE br ee Orr 6, 11

Zahourek v. Arthur Young & Co., 750 F.2d 827

, xxx 12

Statutes and regulations:

Age Discrimination in Employment Act of 1967,

29 U.S.C. 621 et seq.:

| EE 7

,, TIN eRe AER 12-13

,s tsiin sc cestnastesbinnimeenbaonniiitiapenniieainion 12-13

,,,, 7, 12

Civil Rights Act of 1964, Title VII, 42 U.S.C.

Z r 2

§ 701 (b), 42 U.S.C. 2000e (o) 8, 86a

§ 701 (g), 42 U.S.C. 2000e (g)) 8, 86a-87a

§ 701 (h), 42 U.S.C. 2000e (h) 8, 87a

RR eee 4,9, 87a

§ 708, 42 U.S.C. 20000-2 ............................... 10, 87a-88a

§ 706 (f) (1), 42 U.S.C. 2000e-5 (f) (1)

La? 16

Miscellaneous:

Age Discrimination and Overseas Americans,

1983: Hearing Before the Subcomm. on Aging

of the Senate Comm. on Labor and Human Re-

sources, 98th Cong., Ist Sess. (19833)

Civil Rights: Hearings on H.R. 7152 Before

Subcomm. No. 5 of the House Comm. on the

Judiciary, 88th Cong., Ist Sess. (1963)

129 Cong. Rec. 34,499 (1983) . ...................................

Decision No. 85-16, Emp. Prac. Dec. (CCH)

r lamsinteitledesan

Discriminatory Arab Pressure on U.S. Business:

Hearings Before the Subcomm. on International

Trade and Commerce of the House Comm. on

International Relations, 94th Cong., 1st Sess.

TTTTTTTTTT—TTTTTTTTVTTVT aabeecar odlitammhaieaies

Discriminatory Overseas Assignment Policies of

Federal Agencies: Hearings Before a Subcomm.

on the House Comm. on Government Operations,

94th Cong., Ist & 2d Sess. (1975-1976)

Foreign Investment and Arab Boycott Legislation:

Hearings Before the Subcomm. on International

Finance of the Senate Comm. on Banking, Hous-

ing and Urban Affairs, 94th Cong., 1st Sess.

MEER ee ms A

H.R. 4453, 81st Cong., Ist Sess. (1949)

H.R. 405, 88th Cong., Ist Sess. (1963)

H.R. 7152, 88th Cong., 2d Sess. (1963)

H.R. Rep. No. 570, 88th Cong., Ist Sess. (1963)

Policy Statement No. N-915.033, EEOC Compl.

Ie vacisevctcscicoscesececesenccsomees

The World Almanac and Book of Facts: 1990

(1989)

Page

15-16

10-11

Ju the Supreme Court of the United States

OCTOBER TERM, 1989

No.

EQUAL EMPLOYMENT OPPORTUNITY

COMMISSION, PETITIONER

Vv.

ARABIAN AMERICAN OIL Co., ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

The Solicitor General, on behalf of the Equal Em-

ployment Opportunity Commission, petitions for a

writ of certiorari to review the judgment of the

United States Court of Appeals for the Fifth Circuit

in this case.

OPINIONS BELOW

The panel and en banc opinions of the court of

appeals (App., infra, la-76a) are reported, respec-

tively, at 857 F.2d 1014 and 892 F.2d 1271. The

opinion of the district court (App., infra, 77a-82a)

is reported at 653 F. Supp. 629.

(1)

JURISDICTION

The judgment of the court of appeals upon rehear-

ing en bane was entered on February 2, 1990. On

April 24, 1990, Justice White extended the time for

filing a petition for a writ of certiorari to and in-

cluding May 23, 1990. The jurisdiction of this Court

is invoked under 28 U.S.C. 1254(1).

STATUTORY PROVISIONS INVOLVED

The relevant provisions of Title VII of the Civil

Rights Act of 1964, 42 U.S.C. 2000e et seg., are set

forth at App. infra, 86a-88a.

STATEMENT

1. Ali Boureslan, the plaintiff in this Title VII

action, is a naturalized American citizen who

was born in Lebanon. The defendants are two Dela-

ware corporations, Arabian American Oil Company

(Aramco) and its subsidiary, Aramco Services Com-

pany (ASC). Aramco explores, produces, and re-

fines oil and gas in Saudi Arabia. Its principal place

of business is Dhahran, Saudi Arabia, and it is li-

censed to do business in Texas. ASC’s principal

place of business is Houston, Texas. App., infra,

29a-30a.

In 1979, Boureslan began working as an engineer

for ASC in Houston. A year later, his request for

a transfer to Aramco was granted, and he relocated

to Saudi Arabia. In that country, Boureslan alleges,

his supervisor subjected him to a “campaign of har-

assment,” including racial, religous, and ethnic slurs,

culminating in his termination on June 16, 1984.

App., infra, 29a-30a.

2. After filing a charge of discrimination against

Aramco with the Equal Employment Opportunity

AnDY ==

Commission, Boureslan commenced this lawsuit

against Aramco and ASC. His complaint seeks relief

under Title VII and also asserts pendent state law

claims. See App., infra, 30a. Aramco and ASC

moved to dismiss the complaint for lack of subject

matter jurisdiction, arguing that Title VII does not

apply to discrimination outside the United States.

The district court agreed and dismissed the Title VII

claim. Jd. at 77a-82a. It also dismissed Boureslan’s

state law claims for lack of pendent jurisdiction and

entered final judgment in favor of both defendants.

See id. at 82a.

2. A divided panel of the court of appeals af-

firmed. App., infra, 28a-82a. The court granted re-

hearing en banc; upon rehearing, the court affirmed

by a 9-5 vote. Id. at Ia-27a.

a. The en bane majority noted that this Court has

recognized a “canon of construction * * * that legis-

lation of Congress, unless a contrary intent appears,

is meant to apply only within the territorial jurisdic-

tion of the United States.” App., infra, 3a (quoting

Foley Bros. v. Filardo, 336 U.S. 281, 285 (1949)).

Title VII, the majority held, “does not reflect the

necessary clear expression of congressional intent to

extend its reach beyond our borders.” App., infra, 7a.

The majority rejected the contention that the stat-

ute’s “alien exemption”—which provides that Title

VII “shall not apply to an employer with respect to

1In the court of appeals, the EEOC participated as an

amicus curiae before the panel. After entry of the panel’s

decision, the Commission was granted leave to intervene for

the purpose of seeking further review and participated as

a party in the rehearing. App., infra, 85a. See 42 U.S.C.

2000e-5 (f) (1) (authorizing court, in its discretion, to permit

the Commission to intervene in a civil action upon the Com-

mission’s certification that the case is of general public

importance).

nt of aliens outside any State,” 42 U.S.C.

— # be superfluous unless Title Vil other-

wise applies to discrimination outside the United

States. The majority observed that “no one disputes

that the provision excludes coverage to aliens em-

ployed outside the states“; it added, citing 4 *

v. Farah Mfg. Co., 414 U.S. 86, 95 (1973), that the

alien exemption can also meaningfully be read to “

flect “a congressional intent to provide Title VII

coverage to aliens employed within the United States.

., infra, 4a.

characterized Title VII as having a

“domestic focus“ reflected in the Act’s references to

the “United States”, “states” and “state proceed-

ings.” App., infra, 5a. Noting that Title VII ac-

commodate!s] state employment discrimination pro-

ceedings,” the majority suggested that [i]t Con-

gress had intended the Act to apply in foreign coun-

tries,” it would “have been even more careful to ad-

dress conflicts with foreign discrimination laws.

Ibid. The majority also found the Act curiously

silent” on issues that would be raised by extraterri-

torial application of Title VII: specifically. the ap-

propriate venue for an action arising out of diserim-

ination abroad and, given that the Commission 8 sub-

poena power is limited to evidence in the United

States and its territories, the means by which the

Commission could investigate such claims. Ibid. Fi-

nally, the majority suggested that, if the Act were

applied extraterritorially, its plain language would

reach foreign employers that employed American

citizens. The majority expressed doubt “that Con-

gress ever intended to impose Title VII on a foreign

employer who had the grace to employ an American

citizen in its own country.” Id. at 6a.

b. The dissenting members of the court would

have held that “a fair and reasonable reading” of

Title VII “compels the conclusion that Congress did,

in fact, intend Title VII’s broad remedial goals to en-

compass, and eradicate, an American employer’s dis-

criminatory employment practices against a United

States citizen, even if the acts constituting such dis-

crimination were carried out on foreign soil.” App.,

infra, 7a. The dissent maintained that the alien ex-

emption provides a clear expression of Congress’s in-

tent to apply the statute extraterritorially, reasoning

that [if Congress had not envisioned an extra-

territorial application of Title VII, a specific provi-

sion exempting only aliens from such coverage would

not have been needed.” Id. at 9a. The dissent found

further support for its understanding of the alien

exemption in that provision’s legislative history, the

EEOC’s administrative interpretation of Title VII,

and this Court’s analysis in Foley Bros. Id. at 12a-

16a & nn.3-7.

REASONS FOR GRANTING THE PETITION

The court of appeals’ interpretation of Title VII

would withdraw the Act’s protection from the many

Americans who spend a portion of their careers

abroad. That interpretation is not justified by Title

VII's language or the well-recognized presumption

against the extraterritorial application of federal

statutes. By its terms, Title VII reaches discrimina-

tion outside the United States, and the statute con-

tains an exemption—for aliens working outside of

any State—that would be entirely superfluous if the

Act did not apply abroad in the first place. The

EEOC, which is charged with administration of Title

VII, has construed the statute to apply to diserimina-

tion abroad by American corporations against Ameri-

ean citizens. Although there is no conflict among the

circuits on this question, every district court that had

addressed this issue prior to the decision in this case

had reached the same conclusion as the Commission.

The court of appeals’ interpretation of Title Vil

would leave a serious gap in the statute’s prohibition

against invidious employment discrimination. Many

Americans work abroad for at least some part of

their careers. Indeed, in many multinational firms,

experience in overseas operations is instrumental to

advancement. Under the court of appeals’ view of

the statute, employees accepting overseas assignments

would expose themselves to discrimination abroad,

and the effects of that discrimination would be felt

in employment decisions in this country.

1. Congress undoubtedly has authority to prohibit

employment discrimination by American corpora-

tions operating abroad. “While the legislation of the

Congress, unless the contrary intent appears, is con-

strued to apply only within the territorial jurisdic-

tion of the United States, the question of its applica-

tion, so far as citizens of the United States in for-

eign countries is concerned, is one of construction,

not of legislative power.” Blackmer v. United States,

284 U.S. 421, 437 (1932). Congress has often exer-

cised its authority to extend the reach of its legisla-

tion beyond our borders—for instance, in the anti-

trust, securities, and trademark laws.“ Indeed, in the

2 Accord, e.g., Vermilya-Brown Co. v. Connell, 335 U.S.

377, 381 (1948); Foley Bros. v. Filardo, 336 U.S. 281, 284-

285 (1949); Steele v. Bulova Watch Co., 344 U.S. 280, 285-286

(1952); McCulloch v. Sociedad Nacional de Marineros de

Honduras, 372 U.S. 10, 17 (1963).

o See, e. g., Steele v. Bulova Watch Co., 344 U.S. 280 (1952)

(Lanham Act); United States v. Aluminum Co. of America,

area of employment discrimination, Congress re-

cently amended the Age Discrimination in Employ-

ment Act of 1967 to prohibit age discrimination

against American citizens outside the United States.

29 U.S. C. 623 (a), 630 (f); see pp. 12-13, infra.

This Court, of course, has recognized a canon of

construction “which teaches that legislation of Con-

gress, unless a contrary intent appears, is meant to

apply only within the territorial jurisdiction of the

United States.” E. g., Foley Bros. v. Filardo, 336

U.S. 281, 285 (1949).* That canon “is based on the

assumption that Congress is primarily concerned

with domestic conditions,” ibid.; it also serves to pro-

tect against unintended conflicts between our laws

and those of other nations and resulting interna-

tional discord, ef. McCulloch v. Sociedad Nacional de

Marineros de Honduras, 372 U.S. 10, 21-22 (1963).

At bottom, however, the issue remains one of legisla-

tive intent; the presumption against the extraterri-

torial application of American statutes is “a valid

148 F.2d 416 (2d Cir. 1945) (antitrust laws); Psimenos v.

— 8 & Co., 722 F.2d 1041 (2d Cir. 1983) (securities

aws).

*See Argentine Republic v. Amerada Hess Shipping Corp.,

109 S.Ct. 683, 691 (1989); Steele v. Bulova Watch Co., 344

U.S. 280, 285 (1952).

. Where the application of an American statute would violate

international law, a more stringent variant of the presump-

tion applies. “[A]n act of Congress ought never to be con-

strued to violate the law of nations if any other possible

construction remains.” Murray v. Schooner Charming Betsy,

6 U.S. (2 Cranch) 64, 118 (1804). See McCulloch v. So-

ciedad Nacional de Marineros de Honduras, 372 U.S. 10,

21-22 (1963). It would not violate international law to apply

Title VII to American citizens employed by American firms

outside the United States.

approach whereby unexpressed congressional intent

may be ascertained.” Foley Bros., 336 U.S. at 285.

The language and legislative history of Title VII

are sufficient to rebut the presumption; this is not

a case in which Congress’s intent to apply a statute

abroad was “unexpressed.” Title VII’s language and

legislative history, considered in proper context, af-

firmatively manifest Congress’s intention to prohibit

discrimination by American firms against American

citizens abroad.

a. By its terms, Title VII applies to employers

(with a specified number of employees) that are

“engaged in an industry affecting commerce.” 42

U.S.C. 2000e(b).° Significantly, “commerce” is de-

fined to include both interstate and foreign com-

merce: for purposes of Title VII, it encompasses

“trade, traffic, commerce, transportation, transmis-

sion, or communication among the several States; or

hetween a State and any place outside thereof; or

within the District of Columbia, or a possession of

the United States; or between points in the same

State but through a point outside thereof.” 42 U.S.C.

2000e(g) (emphasis added). Nothing in this lan-

guage suggests that the Act applies only within the

borders of the United States. Indeed, the provisions

that determine Title VII’s scope are similar to the

“broad jurisdictional grant in the Lanham Act”

on which this Court relied in holding that that stat-

An “industry affecting commerce” is (42 U.S.C. 2000e(h) )

any activity, business, or industry in commerce or in

which a labor dispute would hinder or obstruct commerce

or the free flow of commerce and includes any activity

or industry “affecting commerce” within the meaning of

the Labor-Management Reporting and Disclosure Act

of 1959 [29 U.S.C. 401 et seq.] and further includes

any governmental industry, business, or activity.

ute applies outside this country. See Steele v. Bulova

Watch Co., 344 U.S. at 286.

In addition, Title VII includes an exemption that

confirms Congress’s intent to extend Title VII’s pro-

tection to American citizens working abroad. Section

702 of the Act, 42 U.S.C. 2000e-1, provides that the

statute “shall not apply to an employer with respect

to the employment of aliens outside any State” (em-

phasis added). If (as the court of appeals held in

this case) Title VII does not apply to discrimination

outside the United States in the first place, this

exemption is completely gratuitous. Congress would

have had no reason to exempt aliens employed abroad

unless—like the religious employers that Section 702

also exempts—those aliens would otherwise have been

covered by the statute. Aliens employed “outside any

State” would only otherwise be covered, however, if

Title VII applies extraterritorially.

As the dissent stressed, the import of the alien

exemption is inescapable (App., infra, 9a):

[B]y specifically providing an exemption for

employers regarding the extraterritorial employ-

ment of “aliens,” without providing a similar

exemption as to the corresponding category of

“citizens,” Congress intended that American em-

ployees would be covered under Title VII.

Cf. Andrus v. Glover Constr. Co., 446 U.S. 608, 616-

617 (1980) (“Where Congress explicitly enumerates

certain exceptions to a general prohibition, additional

exceptions are not to be implied, in the absence of

evidence of a contrary legislative intent.”).*

* The majority of the court of appeals offered no plausible

explanation of the role the alien exemption might play under

its construction of the statute. The majority’s observation

b. The legislative history of the alien exemption

confirms Congress’s intention to extend Title VII’s

protection to American citizens employed by Amer-

ican firms abroad. A committee report explained

that the exemption’s purpose is “to remove conflicts

of law which might otherwise exist between the

United States and a foreign nation in the employment

of aliens outside the United States by an American

enterprise.” H.R. Rep. No. 570, 88th Cong., Ist

that “‘no one disputes that the provision excludes coverage to

aliens employed outside the states” (App., infra, 4a) is

beside the point. The issue is not whether the exemption

means what it says (we have no doubt that it does), but

why such a provision would have been included if the statute

were not intended to apply abroad in the first place. Nor is

there merit to the majority’s suggestion that the alien ex-

emption can be given meaning as a grant of coverage to

aliens employed in the United States; Congress could not

have intended to employ an exemption to extend Title VII's

coverage to that group. See Espinoza v. Farah Mfg. Co., 414

U.S. at 95 (alien employed in this country is protected by

virtue of being an “individual” referred to in Section 703 of

the Act, 42 U.S.C. 2000e-2).

Although (as this Court noted in Espinoza) the alien ex-

emption is undoubtedly indicative of Congress’s intent to

cover aliens within the United States, the Court clearly did

not suggest that this was the exemption’s only significance.

In fact, there is a precise parallel between the inference

this Court drew in Espinoza and the inference that we urge

in this case. In each instance, the fact that the Act specifically

exempts aliens employed outside the United States demon-

strates that a related group outside the exemption—in Es-

pinoza, aliens employed inside the United States and, here,

citizens employed abroad—is covered. Far from rejecting the

inference on which we rely here, Espinoza establishes that it

is appropriate to refer to the exemption as a means of ascer-

taining Congress’s intent with respect to Title VII's coverage.

Sess. 4 (1963). Plainly, Congress would have had no

occasion to remove conflicts of law arising from the

employment of aliens outside the United States unless

it contemplated that the Act would apply extra-

territorially.

c. Although Title VII regulates the relationship

between employer and employee, and thus operates

in a field in which other statutes have been held not

to apply extraterritorially,* the statute’s subject mat-

This report addressed H.R. 405, 88th Cong., Ist Sess.

(1963). That bill was subsequently incorporated in U. R.

7152, 88th Cong., 2d Sess. (1963), which in turn was titi-

mately enacted, as amended, as Title VII. The report on H.R.

405 was made part of the record of the hearings on H.R. 7152.

See Civil Rights: Hearings on H.R. 7152 Before Subcomm.

No. 5 of the House Comm. on the en, 88th Cong., Ist

Sess. 2303 (1963).

H.R. 405 was one of a series of fair employment bills

considered by the House Committee on Education and Labor.

The first to contain an alien exemption, H.R. 4453, 81st Cong.,

lt Sess. (1949), was introduced by Adam Clayton Powell on

April 29, 1949. Six weeks earlier, in holding thatthe Eight

Hour Law did not apply outside the United States, this Court

had placed particular stress on “[t]he absence of any dis-

tinction between citizen and alien labor.” Foley Bros. v.

Filardo, 336 U.S. at 286. It seems likely that H.R. 4453 was

drafted to meet the concern expressed in Foley Bros.—that

is, to draw the distinction found lacking in Foley Bros.

so as to remove that perceived impediment to extraterri-

torial application.

See McCulloch v. Sociedad Nacional de Marineros de

Honduras, supra (NLRA does not apply to seamen aboard

foreign flag vessels owned by foreign subsidiary of American

corporation); Benz v. Compania Naviera Hidalgo, S.A., 353

U.S. 138 (1957) (LMRA does not apply to picketing of

foreign ship operated entirely by foreign seamen under for-

eign articles); Foley Bros. v. Filardo, supra (Eight Hour

Law does not apply to government contracts performed in

Iran). But ef. Vermilya-Brown Co. v. Connell, supra (“pos-

ter provides no basis for questioning Congress’s in-

tention to attack discrimination abroad against Amer-

ican citizens by American employers. In essence,

Title VII prohibits discrimination against one or

more individuals by an employer, as opposed to regu-

lating the relations between the employer and its em-

ployees generally. There is nothing unusual in the

idea that Congress’s concern about this type of in-

dividual injury—or its determination to provide a

remedy—extends outside the United States.

Congress’s willingness to extend the ADEA’s pro-

hibition on age discrimination beyond our borders un-

derscores its willingness to strike at discrimination

against American citizens by American employers

abroad. In 1984, after several courts of appeals had

held that the ADEA did not apply abroad,’ Congress

amended that statute’s definition of employee to in-

clude “any individual who is a citizen of the United

States employed by an employer in a workplace in

a foreign country,” 29 U.S.C. 630 (f), and specified

the employers to which the Act would apply, 29

sessions” of the United States that are subject to the FLSA

include bases leased from Great Britain). Significantly, none

of the statutes which were held not to apply extraterritorially

was limited by its terms to American citizens, posing par-

ticular problems if the statute were interpreted to apply

abroad. Title VII is so limited.

® Zahourek v. Arthur Young & Co., 750 F.2d 827 (10th Cir.

1984); Cleary v. United States Lines, Inc., 728 F.2d 607

(3d Cir. 1984). See Pfeiffer v. Wm. Wrigley Jr. Co., 755

F.2d 554 (7th Cir. 1985). As these courts noted, the ADEA

has no provision comparable to Title VII’s alien exemption.

Further, unlike Title VII, the ADEA incorporates provisions

of the FLSA, including a provision expressly excluding work

performed in a workplace in a foreign country from the

FLSA.

U.S.C. 623(f) (1) and (h). Supporters of this legis-

lation emphasized that these amendments were ap-

propriate to conform the ADEA’s prohibition on age

discrimination to the equivalent provisions of Title

VII. The Senate sponsor of the ADEA amendments

noted that “the substantive prohibitions of the

[ADEA] are worded nearly exactly as those in title

VII, which at least two district courts have held does

apply abroad,” and argued that his proposed amend-

ment would “clear[] up an anomaly” that “Congress

never intended.” 129 Cong. Rec. 34,499 (1983) (re-

marks of Sen. Grassley) .’’

The court of appeals’ interpretation of Title VII

would create a similar anomaly. Americans em-

ployed overseas would be protected from age discrim-

ination, bet not from discrimination based upon race,

sex, religion, or national origin. The language of

Title VII—including its general jurisdictional pro-

visions and the alien exemption—forecloses attribut-

ing such an odd result to Congress.

Similarly, during hearings on the proposed legislation,

the EEOC’s Chairman testified that Title VII had been con-

strued to apply to discrimination outside of the United States.

See Age Discrimination and Overseas Americans, 1983:

Hearing Before the Subcomm. on Aging of the Senate Comm.

on Labor and Human Resources, 98th Cong., 1st Sess. 2-4

(1983) (testimony of Clarence Thomas).

We do not suggest that the legislative history of the 1984

ADEA amendments is indicative of the intent of the 1964

Congress that enacted Title VII. However, that history lays

to rest the majority’s suggestion (App., infra, 6a) that differ-

ences in the language of the ADEA and Title VII justify

attributing an intention not to apply the 1964 Act to American

citizens outside the United States; it also undercuts any argu-

ment that Congress is generally reluctant to see its anti-

discrimination legislation applied abroad.

2. Before the decision in this case, many authori-

ties had agreed that Title VII applies to discrimina-

tion abroad by American employers against American

citizens. Every prior district court decision had

reached that conclusion. Seville v. Martin Marietta

Corp., 638 F. Supp. 590 (D. Md. 1986); Bryant v.

International Schools Servs., Inc., 502 F. Supp. 472

(D.N.J. 1980), rev’d on other grounds, 675 F.2d 562

(3d Cir. 1982); Love v. Pullman Co., 13 Fair Empl.

Prac, Cas. (BNA) 423, 426 n.4 (D. Colo. 1976),

aff'd on other grounds, 569 F.2d 1074 (10th Cir.

1978). See also Lavrov v. NCR Corp., 600 F. Supp.

923, 931-932 & n.5 (S.D. Ohio 1984). In these cases,

the courts found that the alien exemption was a

strong indication of Congress’s intention to protect

American citizens from discrimination abroad. See,

e. g., Love v. Pullman Co., 13 Fair Empl. Prac. Cas.

(BNA) at 426 n.4 (“Since Congress explicitly ex-

cluded aliens employed outside of any state, it must

have intended to provide relief to American citizens

employed outside of any state * * *.”).

In addition, the EEOC, the agency charged with

administration of Title VII, has for at least 15 years

interpreted the statute to apply to discrimination by

American employers against American citizens out-

side the United States. In 1975, in a letter to a mem-

ber of the Senate Foreign Relations Committee, the

EEOC’s General Counsel stated that “[t]he language

of Title VII indicates a Congressional intent to make

the Title applicable to American citizens employed by

American companies operating overseas.“ As has

been noted (note 10, supra), the Commission’s Chair-

man reiterated that construction in 1984, when Con-

gress considered whether the ADEA should be

11 Addendum 1 to EEOC C.A. En Banc Br.

amended to prohibit age discrimination to the same

extent. The Commission adhered to that interpreta-

tion in a decision on a charge of discrimination oc-

curring abroad, Decision No. 85-16, Empl. Prac. Dec.

(CCH) {| 6856 (1985), and recently issued a general

policy statement setting forth the circumstances

under which it will apply Title VII to charges of

discrimination overseas, Policy Statement No. N-

915.033, EEOC Compl. Man. (CCH) { 2164 (1988).

Finally, the Justice Department has also construed

Title VII to apply to discrimination abroad. In 1975,

then-Assistant Attorney General Scalia testified be-

fore committees of both Houses of Congress that the

alien exemption implies that Title VII applies outside

the United States. He stated:

It should be noted that both Executive Order

11478 and § 717 of Title VII specify that they

are not applicable to “aliens employed outside

the limits of the United States.” The implica-

tion of this is that they do apply to United

States citizens employed throughout the world.

With respect to discrimination in employment

by private companies and individuals, Title VII

of the 1964 Civil Rights Act, as amended, pro-

hibits a broad range of “unlawful employment

practices” by any private employer “engaged in

an industry affecting commerce who has fifteen

or more employees.” * * * Once again the statue

[sic] contains an exemption “with respect to the

employment of aliens outside any State,” which

implies that it is applicable to the employment

of United States citizens by covered employers

anywhere in the world.!“

12 Foreign Investment and Arab Boycott Legislation: Hear-

ings Before the Subcomm. on International Finance of the

Senate Comm. on Banking, Housing and Urban Affairs, 94th

In keeping with this testimony, Section 717 of Title

VII, 42 U.S.C. 2000e-16, which governs the employ-

ment practices of federal agencies, has been applied

to alleged discrimination outside the United States.

See, e.g., Brown v. Marsh, 777 F.2d 8 (D.C. Cir.

1985) (Title VII action by civilian employed at a

military base in Germany).

Unless further review is granted, the court of

appeals’ decision will foster confusion in this area of

the law.

3. Title VII implements a national goal of the

“highest priority.” Alexander v. Gardner-Denver Co.,

415 U.S. 36, 47 (1974). Necessarily, therefore, the

question whether the Nation’s policy against discrim-

ination is to apply to Americans working abroad is

an issue of great importance. The precise number of

Americans working abroad for American employers

at any one time is difficult to gauge, but there are

indications that the figure is a large one. The State

Department has estimated that in 1988 there were

almost 2.2 million American citizens residing abroad.“

Although this figure includes dependents, persons who

are unemployed or retired, and employees of non-U.S.

firms, the number of Americans employed by Amer-

ican firms overseas is substantial.

Cong., Ist Sess. 165 (1975). Accord Discriminatory Arab

Pressure on U.S. Business: Hearings Before the Subcomm.

on International Trade and Commerce of the House Comm.

on International Relations, 94th Cong., Ist Sess. 87-88 (1975);

Discriminatory Overseas Assignment Policies of Federal Agen-

cies: Hearings Before a Subcomm. of the House Comm. on

Government Operations, 94th Cong., Ist & 2d Sess. 87-89

(1975-1976).

13 See The World Almanac and Book of Facts: 1990, at 555

(1989). This figure excludes servicemen and federal em-

ployees and their dependents.

—

The class of individuals potentially affected by the

question presented in this case is greater than the

number employed abroad at any point in time. In

many multinational corporations based in this coun-

try, assignments in foreign offices are important

means through which employees can enrich their ex-

perience or enhance their opportunities for advance-

ment. Under the court of appeals’ interpretation of

Title VII, those employees who seek to take ad-

vantage of those opportunities at some point in their

careers would be required to relinquish protection

from invidious employment discrimination.

The fact that many careers in American firms

encompass employment both inside and outside the

United States forecloses any sharp division between

discrimination in this country and abroad. In those

enterprises in which successful performance in over-

seas assignments is essential or desirable for promo-

tion, the effects of discrimination abroad will be re-

flected in employment decisions and career paths in

this country. In this light, it is not surprising that

Congress chose, as the alien exemption reflects, to

extend Title VII’s protection to Americans whose

careers with American firms take them abroad.

The issue of Title VII’s extraterritorial application

is recurrent as well as important. As of January 23,

1989, the Commission was investigating 50 charges

that allege violations of Title VII arising out of em-

ployment actions or practices that took place or were

implemented overseas. Twenty-eight of these charges

are pending in the EEOC’s Houston district office,

within the Fifth Circuit.

The question presented by this case—whether

Title VII’s guarantee of equal employment oppor-

tunity is to be withdrawn from Americans whose

careers take them abroad to work for American em-

ployers—is an issue of widespread importance and

should be resolved by this Court.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

JOHN R. DUNNE

Assistant Attorney General

JOHN G. ROBERTS, JR.

Deputy Solicitor General

STEPHEN L. NIGHTINGALE

Assistant to the Solicitor General

CHARLES A. SHANOR

General Counsel

GWENDOLYN YOUNG REAMS

Associate General Counsel

VINCENT J. BLACKWOOD

Assistant General Counsel

SAMUEL A. MARCOSSON

Attorney

Equal Employment Opportunity Commission

May 1990

APPENDIX A

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

No. 87-2206

ALI BOURESLAN, PLAINTIFF-APPELLANT,

ARAMCO, ARABIAN AMERICAN OIL Co.

and ARAMCO SERVICE COMPANY,

DEFENDANTS-APPELLEES.

Appeal from the United States District Court

for the Southern District of Texas.

Feb. 2, 1990

Before CLARK, Chief Judge, GEE, REAVLEY,

POLITZ, KING, JOHNSON, WILLIAMS, GAR-

WOOD, JOLLY, HIGGINBOTHAM, DAVIS,

JONES, SMITH and DUHE, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

We sit en banc in this case to consider a single

question: whether Title VII regulates the employ-

ment practices of U.S. employers which employ U.S.

citizens outside the United States. We affirm the dis-

trict court’s order dismissing this suit.

In his Title VII suit, Boureslan charged that while

he was working in Saudi Arabia his employer, Arab-

ian American Oil Co. (Aramco), discriminated

against him because of his race, religion and national

origin. Aramco’s motion to dismiss for lack of juris-

diction squarely raised the question whether Title

VII’s protection extends to U.S. citizens employed

by U.S. employers.

‘a question in the negative as did the

district court and the panel majority. See Boureslan

v. Aramco, 857 F.2d 1014 (5th Cir.1988). In reach-

ing this conclusion we adopt the reasoning of the

panel majority. We write briefly to summarize the

reasons for our conclusion and to include two points

that were more fully developed during en banc brief-

ing and argument. 1

The respect for the right of nations to regulate con-

duct within their own borders is a fundamental con-

cept of sovereignty that is not lightly tossed aside.

See American Banana Co. v. United Fruit Co., 213

U.S. 347, 356, 29 S.Ct. 511, 512, 53 L.Ed. 826 (1909) ;

Blackmer v. United States, 284 U.S. 421, 137. 52

S.Ct. 252, 254, 76 L.Ed. 375 (1932). From this con-

cept the established presumption against extraterri-

torial application of a statute developed. Id. The

critieal question that governs this appeal is whether

Congress included language in Title VII that reflects

a clear congressional intent to overcome the presump-

tion against extraterritorial application of the Act.

The Supreme Court described this presumption in

Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285, 69

S.Ct. 575, 577, 93 L.Ed. 680 (1949), a case closely

analogous to the case at hand. In that case, Filardo,

a US. citizen, argued that the Federal Eight Hour

Law entitled him to overtime pay for work he had

performed while in the employ of Foley Brothers, a

U.S. government contractor operating in Iran and

Iraq. The Court, in rejecting Filardo’s claim, ex-

plained the nature of the presumption against extra-

territorial application of a statute:

The canon of construction which teaches that

legislation of Congress, unless a contrary intent

appears, is meant to apply only within the ter-

ritorial jurisdiction of the United States

is a valid approach whereby unexpressed congres-

sional intent may be ascertained. It is based

on the assumption that Congress is primarily

concerned with domestic conditions. We find noth-

ing in the Act itself . . nor in the legislative

history, which would lead to the belief that Con-

gress entertained any intention other than the

normal one in this case.

Id. The Court’s scrutiny of the Eight Hour Law’s

statutory language and structure revealed no con-

gressional intent to cover workers such as Filardo—

a conclusion bolstered by the legislative history’s

focus on domestic wage and unemployment problems.

Id. at 285-87, 69 S.Ct. at 577-78. In examining this

statute, the Supreme Court set out the standard by

which we must measure Boureslan’s arguments: “An

intention so to regulate labor conditions which are

the primary concern of a foreign country should

not be attributed to Congress in the absence of a

clearly expressed purpose.” Id. at 286, 69 S.Ct. at

578 (emphasis added).

Boureslan’s argument that Title VII reflects a clear

congressional intent to extend its reach outside this

country chiefly rests on Title VII's alien exemption

provision, 42 U.S.C. § 2000e-1. This provision which

expressly establishes an exemption from coverage

under the Act provides: “This title shall not apply

to an employer with respect to employment of aliens

outside of any state.” Bourselan finds the necessary

clear expression of congressional intent to apply Title

VII abroad by drawing a negative inference from

that provision and concluding that Congress meant to

include citizens working abroad when it excluded

aliens abroad. We disagree, and for the reasons that

follow conclude that this single negative inference

falls short of the required clear expression of con-

gressional intent necessary to extend the reach of the

Act outside this country.

Boureslan argues first that if we do not attach his

negative inference to the alien exemption provision,

we strip the provision of all purpose. This is simply

not accurate. As we noted in the panel opinion, “no

one disputes that the provision excludes coverage to

aliens employed outside the states.” Boureslan, 857

F.2d at 1018. Also the Supreme Court in Espinoza

v. Farrah Mfg. Co., 414 U.S. 86, 95, 94 S.Ct. 334,

340, 38 L.Ed.2d 287 (1973), determined that this

provision reflects a congressional intent to provide

Title VII coverage to aliens employed within the

United States. Thus, we remain persuaded that we

need not choose to either attach Boureslan’s negative

inference to this provision or strip the provision of

all meaning. Even if we decline to give the alien ex-

emption provision the interpretation appellant seeks,

the provision is still a meaningful and useful part of

the Act.

The domestic focus of the Act is also inconsistent

with an intent to give extraterritorial reach to it.

As noted in the panel opinion, Boureslan’s effort to

read an international reach into Title VII's general

policy statements and alien exemption provision fails

in light of repeated references in the Civil Rights

Act of 1964 to “United States”, “states” and “state

proceedings.” See Boureslan, 857 F.2d at 1019.

In Title VII itself, Congress specifically accommo-

dated state employment discrimination proceedings

in an effort to avoid conflicts with state law and rec-

ognized state interests. See 42 U.S.C. §§ 2000e-5(c),

(d), (e). If Congress had intended the Act to apply

in foreign countries, we would expect Congress to

have been even more careful to address conflicts with

foreign discrimination laws. Yet the statute says

nothing about potential conflicts with foreign discrim-

ination laws.

The Act is also curiously silent in a number of

areas where Congress ordinarily speaks if it wants

to extend its legislation beyond our borders. First,

the Act fails to address venue problems that arise

with foreign violations. Cf. 42 U.S.C. § 2000e-

5(f)(3) (establishing venue “in any judicial district

in the State in which the unlawful employment prac-

tice is alleged to have been committed. Next,

the Equal Employment Opportunity Council’s inves-

tigatory powers are limited to evidence obtained in

the United States and its territories. 42 U.S.C.

§ 2000e-9.

Finally, if we give extraterritorial reach to Title

VII, the plain language of the Act would necessarily

extend that title to govern the employment relation-

ship between foreign employers, and their American

employees anywhere in the world. See § 2000e(b).

We say this because nothing in the Act exempts for-

eign employers and our courts have held that foreign

employers engaged in commerce in the United States

are employers under Title VII. See, e. g., Spiess v.

C. Itoh & Co. (America), Inc., 643 F.2d 353 (5th

Cir.1981). We doubt that Congress ever intended to .

impose Title VII on a foreign employer who had the

grace to employ an American citizen in its own

country.

As the Court stated as recently as January 1989,

when it desires to do so, Congress knows how to give

extraterritorial effect to one of its statutes. Argen-

tine Republic v. Amerada Hess Shipping Co.,

US. 109 S.Ct. 683, 691, 102 L.Ed.2d 818, 832

(1989). A good example is the Age Discrimination

and Employment Act which was amended in 1984

to give the Act extraterritorial application. 29

U.S.C. 8 630(f) (“The term ‘employee’ includes any

individual who is a citizen of the United States em-

ployed by an employer in a workplace in a foreign

country.”). See also The Comprehensive Anti-

Apartheid Act of 1986, 22 U.S.C. 55 5001-5116

(1979, Supp. 1989) ; The Export Administration Act,

50 U.S.C. app. $§ 2401-2420 (Supp.1989). Congress

demonstrated in the above acts its awareness of the

need to make a clear statement of extraterritorial

application, address the concerns of conflicting for-

eign law, and provide the usual nuts-and-bolts pro-

visions for enforcing those rights.

EE — oe 0

In essence, Boureslan asks this court to conelude

that Congress balanced Title VII's important goals

against the foreign sovereignty concerns that under-

lie the presumption against extraterritoriality, con-

sidered the implications of application abroad and

then addressed these concerns by inviting courts to

read between the lines. For the reasons stated above,

we cannot accept this conclusion and hold that Title

VII does not reflect the necessary clear expression of

congressional intent to extend its reach beyond our

borders.

AFFIRMED.

KING, Cireuit Judge, with whom REAVLE V,

POLITZ, JOHNSON and WILLIAMS, Circuit

Judges, join dissenting:

I agree with the majority that the sole question

presented in this en banc rehearing is whether Con-

gress acted to extend the protections of Title VII to

United States citizens employed in other countries

by United States employers. I believe that a fair

and reasonable reading of this civil rights statute

compels the conclusion that Congress did, in fact,

intend Title VII’s broad remedial goals to encompass,

and eradicate, an American employer’s discrimina-

tory employment practices against a United States

citizen, even if the acts constituting such discrimi-

nation were carried out on foreign soil. Therefore,

I must respectfully dissent from the majority’s hold-

ing, which has affirmed the district court’s dismissal

of appellant Boureslan’s action.

The Alien Exemption Clause

It is undisputed that Congress has the power to

extend the protection of its laws extraterritorially

when it is regulating the conduct of United States

nationals. See, e.g., Steele v. Bulova Watch Co., 344

U.S. 280, 282-83, 73 S.Ct. 252, 253, 97 L.Ed. 319

(1952); United States v. Mitchell, 553 F.2d 996, 1001

(5th Cir.1977). In determining whether Congress in-

tended to exercise this power when it enacted Title

VII, we are guided by a presumption that acts of

Congress are intended to apply only within the ter-

ritory of the United States unless there is a clear

expression of congressional intent to the contrary. —

Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285, 69

S.Ct. 575, 577, 93 L.Ed. 680 (1949); Mitchell, 553

F.2d at 1002.

A clear expression of Congress’s intent regarding

the extraterritorial reach of Title VII is found in

1 There is a second, and distinct, presumption that Congress

does not intend to violate international law. A statute may not

be construed to violate international law unless Congress has,

by an “affirmative expression” of its intent, required such a

construction. McCulloch v. Sociedad Nacional de Marineros

de Honduras, 372 U.S. 10, 21-22, 83 S.Ct. 671, 677, 9 L.Ed.2d

547 (1963) ; Weinberger v. Rossi, 456 U.S. 25, 32, 102 S.Ct.

1510, 1516, 71 L.Ed.2d 715 (1982). As I explained in consid-

erable detail in my panel dissent, extraterritorial application

of Title VII under the circumstances before us would not

violate international law; therefore, this presumption does not

apply in the instant case. See Boureslan, 857 F.2d at 1021-31

(King, J., dissenting).

The less stringent standard of the presumption against

extraterritorial application of a federal statute does not re-

quire an explicit, affirmative statement of Congress. Instead,

the Supreme Court has said that the presumption “is a valid

means whereby unexpressed congressional intent may be

ascertained.” Foley Bros., 336 U.S. at 285, 69 S.Ct. at 577

(emphasis added). The question involved in our determina-

tion is what showing of congressional intent is sufficiently

clear to overcome the presumption against extraterritorial

application.

section 702 of the statute, the alien exemption clause.

42 U.S.C. § 2000e-1. This section provides that Title

VII “shall not apply to an employer with respect to

the employment of aliens outside any State.” Jd. If

Congress had not envisioned an extraterritorial appli-

cation of Title VII, a specific provision exempting

only aliens from such coverage would not have been

needed. Likewise, if Congress had intended in sec-

tion 702 to explicitly reject extraterritorial applica-

tion, it would have used one of the statute’s general

terms: “individuals” or “employees.” See, e.g., 42

U.S.C. § 2000e-2 (prehibiting discrimination against

“any individual” with respect to his or her employ-

ment). Compare Fair Labor Standards Act, 29 U.S.C.

§ 213(f) (excluding from FLSA coverage “any em-

ployee” whose services are performed in a foreign

country). Canons of statutory construction require

that we interpret a statute “to give effect, if possible,

to every word Congress used.” Reiter v. Sonotone

Corp., 442 U.S. 330, 339, 99 S.Ct. 2326, 2331, 60

L.Ed.2d 931 (1979); see also Argentine Republic v.

Amerada Hess Shipping Corp., — U.S. ——, 109

S.Ct. 683, 691, 102 L.Ed.2d 818 (1989) (refusing

to construe statute to render its terms nugatory):

Beisler v. Commissioner, 814 F.2d 1304, 1307 (9th

Cir.1987) (We should avoid an interpretation of the

statute that renders any part of it superfluous and

does not give effect to all of the words used by Con-

gress.”’). The logical and necessary interpretation of

section 702 is that, by specifically providing an ex-

emption for employers regarding the extraterritorial

employment of “aliens,” without providing a similar

exemption as to the corresponding category of “citi-

zens,“ Congress intended that American employees

would be covered under Title VII.

—— *

10a

In response to this common-sense interpretation

of section 702, the majority relies on two alternative

interpretations. First, the majority suggests that the

alien exemption provision means simply that aliens

employed outside the United States are not covered

by Title VII. I do not contend, of course, that section

702 does not mean what it says. However, such a

narrow reading of Congress’s language, although

superficially appealing, is unreasonable because it

renders the provision purposeless: if no individual

was intended to be covered extraterritorially by Title

VII, a specific provision excluding only aliens would

be superfluous.

Next, the majority points to a parallel inference

that one may draw from section 702: that aliens em-

ployed within the United States are covered by the

Act. While this inference also follows logically from

the language of the statute, it is in itself redundant

because use of the term “individual” in defining “em-

ployee” is sufficient to bring aliens residing in the

United States within the statute’s coverage. 42 U.S.C.

§ 2000e(f). See Espinoza v. Farah Mfg. Co., 414

U.S. 86, 95, 94 S.Ct. 334, 38 L.Ed.2d 287 (1973).

Indeed, Congress could not have provided otherwise

without violating the equal protection principles im-

plicit in the fifth amendment. See Yick Wo v. Hop-

kins, 118 U.S. 356, 6 S.Ct. 1064, 30 L.Ed. 220 (1886) ;

Bolling v. Sharpe, 347 U.S. 497, 74 S.Ct. 693, 98 L.Ed

884 (1954). Moreover, if Congress’s sole purpose in

the alien exemption clause was to provide coverage to

aliens residing in the United States, the more logical

location in the statute to express this intent would

have been the definition section, where Congress de-

fined “employee,” see 42 U.S.C. § 2000e(f), not the

provision entitled “Exemption,” where Congress pro-

— — ¶:ů—— — —— -

B ee...

lla

vided for the limited exceptions to the broad remedial

goals of Title VII.’

The majority opinion cites Espinoza apparently for

the proposition that a negative inference that aliens

within the United States are covered under Title VII

is the “correct” interpretation of Congress’s intent in

enacting section 702. The plaintiff in Espinoza was

a Mexican citizen residing in the United States. Ex-

plaining that Title VII protects resident aliens against

illegal discrimination, the Supreme Court noted that

congressional intent on this matter could be derived

through a negative inference from section 702. Es-

pinoza, 414 U.S. at 95, 94 S.Ct. at 340. Not faced

with the question of extraterritorial application, the

Court had no need to discuss the mirror inference

that is reflected in section 702, although the Court’s

rationale regarding statutory interpretation supports

the derivation of such a legitimate inference. More-

over, the Court pointed out that Congress’s intent in

Title VII to include aliens could also be derived from

its use of the term “any individual” in section 703,

id., supporting my point that section 702 would be

redundant if the Espinoza inference were the only

reason for its existence. Thus, the inference that the

Supreme Court drew from section 702 in Espinoza

does not preclude, but rather supports, the equally

permissible—and, in fact, more reasonable—infer-

2 As a matter of statutory construction, every part of the

statute is to be considered, including subheadings that Con-

gress has placed on the various sections, to arrive at the stat-

ute’s clear and total meaning. House v. Commissioner, 453

F.2d 982, 987 (5th Cir.1972) ; see also Hardin v. City Title &

Escrow Co., 797 F.2d 1037, 1039 (D.C.Cir.1986) (a descrip-

tive subtitle that was part of an act as written by Congress

constitutes an indication of congressional intent) (unanimous

opinion of Judges MacKinnon, Bork, and Scalia).

12a

ence that Congress intended Title VII to protect

United States citizens employed outside the United

States.

Although the legislative history of section 702 is

not remarkably iiluminating, I have found nothing in

the published records that contradicts my interpreta-

tion of the provision’s extraterritorial language.

Rather, it seems clear that section 702 is a “limited

exemption” for employers and that “the intent of the

[alien] exemption is to remove conflicts of law which

might otherwise exist between the United States and

a foreign nation in the employment of aliens outside

the United States by an American enterprise.” Civil

Rights: Hearings on H.R. 7152 Before the House

Committee on the Judiciary, 88th Cong., Ist Sess.

2303 (1963) (testimony of Representative Roosevelt

explaining provisions of H.R. 405, which was incor-

porated into Title VII of H.R. 7152) (emphasis

added).’ If Title VII was not intended to apply ex-

3 The context of this legislative history is explained in my

panel dissent, 857 F.2d at 1032 n.26. Arguing that we may not

“substitute legislative history for the language of the Act,”

the panel majority dismissed this “snippet” of legislative

history as insignificant. Jd. at 1018, 1020. Contrary to the

majority’s characterization of my position, I am not attempt-

ing to rely on legislative history to compensate for a lack of

statutory language. As explained in this dissenting opinion,

I believe the only reasonable interpretation of the plain

language of section 702 is that Congress intended an extra-

territorial scope for Title VII as between United States citi-

zens and United States employers who are otherwise covered

under the Act. In other words, an “exemption” must neces-

sarily be an exemption from coverage that all individuals

covered under section 703 would otherwise enjoy. The legis-

lative history in this case simply serves to establish that Con-

gress did not mistakenly or clumsily include language in the

statute that is superfluous or nonsensical.

13a

traterritorially, Congress would not have been con-

cerned with conflicts of law “which might otherwise

exist.” *

Section 702 obviously reflects Congress’s concern

that the extraterritorial coverage of aliens under Title

VII would infringe the sovereignty of other nations,

The administrative interpretation of Title VII also sup-

ports its extraterritorial application. Intervenor-appellant,

the Equal Employment Opportunity Commission (“EEOC”),

the administrative agency charged by Congress with the re-

sponsibility for interpreting and enforcing Title VII, has

adopted the position that Title VII applies to American citi-

zens employed by United States firms outside the United

States. See, e.g., EEOC Dec. No. 85-16, 2 Empl.Prac.Guide

(CCH) 6857, at 7070-75 (Sept. 16, 1985); Letter from

William A. Carey, EEOC General Counsel, to Sen. Frank

Church (Mar. 14, 1975), reprinted in Note, Civil Rights,

Employment and the Multinational Corporations, 10 Cornell

Int'l L.J. 87, 102-03 (1976) (“If Section 702 is to have any

meaning at all, .. it is necessary to construe it as expressing

a Congressional intent to extend the coverage of Title VII

to include employment conditions of citizens in overseas op-

erations of domestic corporations at the same time it excludes

aliens of the domestic corporation from the operation of the

statute.”’).

Likewise, the Department of Justice has taken the position

that the statute applies extraterritorially. In 1975 during

legislative debates over a proposed prohibition on participa-

tion in foreign boycotts requiring religion-based employment

discrimination, then-Assistant Attorney General Antonin

Scalia testified that Title VII already applied to the employ-

ment of United States citizens by covered employers any-

where in the world. See Discretionary Arab Pressure on U.S.

Business: Hearings Before the Subcomm. on International

Trade and Commerce of the House Comm. on International

Relations, 94th Cong., Ist Sess. 88 (1975) (statement of

Antonin Scalia, Assistant Attorney General), quoted in Note,

Equal Employment Opportunity for Americans Abroad, 62

N.Y.U.L.Rev. 1288, 1291 (1987).

l4a

in that the United States would be imposing its laws

on foreign nationals working outside the United

States. The effect on foreign jurisdictional sovereignty

is far less pronounced, and in some cases could be

negligible, when extraterritorial application of Title

VII is limited to cases involving United States citi-

zens employed by “American enterprises.” This rela-

tionship reflects an area where concerns for interna-

tional sovereignty, comity, and conflicts of law con-

cerns that explain the alien exemption provision—are

outweighed by Congress’s commitment in Title VII

_to protect the personal right of all individuals to equal

employment opportunities. See Bourselan, 857 F.2d

at 1028-30 (King., J., dissenting).

An interpretation of section 702 that extends cover-

age of Title VII to citizens employed by United States

employers in other countries, while denying such cov-

erage to aliens, is supported by the Supreme Court’s

statutory analysis in Foley Bros., where the Court in-

terpreted another federal statute, the Eight Hour

Law, to provide only domestic coverage. 336 U.S. at

285, 69 S.Ct. at 577. The majority cites Foley Bros.

as a “closely analogous” case to illustrate the pre-

sumption against extraterritorial application of a

federal statute. A more careful analysis of Foley

Congress explained that Title VII was necessary:

to remove obstructions to the free flow of interstate and

foreign commerce and to insure the complete and full

enjoyment by all persons of the rights, privileges, and

immunities secured and protected by the Constitution.

House Report on Civil Rights Act of 1964, H.R. Rep. No. 914,

88th Cong., Ist Sess., reprinted in 1964 U.S.Code Cong. &

Ad. News 2391, 2402.

*I disagree that a statute such as the Eight Hour Law is

“closely analogous” to Title VII. Labor laws regulating eco-

15a

Bros. indicates, however, that the Couit found in that

case that the Eight Hour Law, as opposed to Title

VII, contained no language that gave any indication

of a congressional purpose to extend the law’s cover-

age extraterritorially. The Court relied heavily on

the fact that the statute drew no distinction between

citizens and aliens. An extraterritorial application,

therefore, would necessarily involve foreign national

laborers, thereby creating a risk that the United

States would intrude upon an area of “local concern”

to foreign nations.’ The Court explained:

No distinction is drawn between laborers who are

aliens and those who are citizens of the United

nomic conditions of employment or labor-management rela-

tions involve different legislative policies—more distinctly

domestic policies—and create greater risks of insulting the

sovereignty of a foreign nation than does a civil rights statute

such as Title VII, which reflects the more universal concerns

for individual rights and liberties. See generally Note, Title

VII of the Civil Rights Act of 1964 and the Multinational

Enterprise, 73 Geo. LJ. 1465, 1480-83 (1985); see also

Dehner, Multinational Enterprise and Racial Non-Discrimina-

tion: US. Enforcement of an International Human Right,

15 Harv.Int’l LJ. 71, 91-94, 100 (1974).

The majority quotes the following language from Foley

Bros.: “An intention so to regulate labor conditions which

are the primary concern of a foreign country should not be

attributed to Congress in the absence of a clearly expressed

purpose.” 336 U.S. at 286, 69 S.Ct. at 578. In this quoted

passage, the labor conditions of “primary concern” to foreign

nations refers to the employment of aliens by United States

enterprises abroad—the very concern eliminated by the alien

exemption provision in Title VII. The Supreme Court does

not imply in Foley Bros.—and it is disingenuous of the ma-

jority to suggest—that the labor conditions of United States

citizens employed abroad by United States corporations are

“the primary concern of a foreign country.”

16a

States. Unless we were to read such a distinetion

into the statute we should be forced to conclude,

under respondent’s reasoning, that Congress in-

tended to regulate the working hours of a citizen

of Iran who chanced to be employed on a public

work of the United States in that foreign land.

. . . The absence of any distinction between

citizen and alien labor indicates to us that the

statute was intended to apply only to those places.

where the labor conditions of both citizen and

alien employees are a probable concern of Con-

gress. Such places do not include foreign coun-

tries such as Iraq and Iran.

Id. at 286, 69 S.Ct. at 578.

By explicitly exempting aliens employed abroad

from the scope of Title VII, Congress addressed the

factor that the Supreme Court had identified as most

likely to violate principles of foreign sovereignty in

the extraterritorial application of United States labor

laws. I find it compelling that Title VII’s alien ex-

emption provision is derived from a fair employment

bill that first appeared in April of 1949, H.R. 4453,

8lst Cong., Ist Sess., only a few weeks after the

Supreme Court’s decision in Foley Bros., and that the

purpose ascribed to the exemption by the House Com-

mittee on Education and Labor some 14 years later

tracks the rationale of the Foley Bros. decision. Civil

Rights: Hearings on H.R. 7152 Before the House

Committee on the Judiciary, 88th Cong., Ist Sess.

2303 (1963).

Appeilee Aramco's broad assertion that no other

United States labor law has been construed to apply

abroad ignores the fact that no other laber law has

contained a specific provision that addressed the con-

cern raised in Foley Bros. Only Title VII provides

17a

an exemption from extraterritorial application based

on nationality. Moreover, in light of the 1984 amend-

ment to the Age Discrimination in Employment Act,“

29 U.S.C. § 621 et seg., (“ADEA”), it cannot be

maintained that Congress has consistently declined to

protect the rights of American workers employed

abroad, or that such protection does not comport with

federal policies.

Title VII “Nuts and Bolts“

Although failing to point to any statutory provi-

sions that would preclude extraterritorial application

of Title VII, the majority argues that the “focus”

and the “nuts and bolts” provisions of the Act are

“inconsistent” with a congressional intent to provide

ex.raterritorial coverage to United States citizens.

" woking first to the domestic focus of Title VII, I

agree with the majority that the Act and its legisla-

tive history make several references to problems of

employment discrimination within the United States

and to state laws governing employment practices.

Such references are not inconsistent with the exer-

cise of extraterritorial jurisdiction based on nation-

ality. The impetus for Congress to enact Title VII,

as is true for most federal legislation, was to remedy

a perceived domestic problem. Congress’s intent to

apply the statute extraterritorially is a separate issue,

and is clearly evidenced in the alien exemption provi-

sion. In addition, as I noted in my panel dissent, the

effects of employment discrimination suffered by

United States citizens while employed in other coun-

* See 29 U.S.C. 8630 (f) (“The term ‘employee’ includes

any individual who is a citizen of the United States employed

by an employer in a workplace in a foreign country.“).

18a

tries by United States employers are sufficiently per-

vasive to be felt in this country. Bowreslan, 857 F.2d

at 1027. I also noted that Congress was not con-

cerned solely with the domestic effects of discrimina-

tion, but also with the image of the United States in

the international community. Id. at 1027-28.

The geographie references in Title VII that relate

to the Commerce Clause apply to limit the scope of

the term employer“ to those engaged in an industry

affecting commerce as that term is defined in the

statute. See 42 U.S.C. § 2000 e. However, this tra-

ditional Commerce Clause language does not by it-

self evidence an intent to restrict the geographic

scope of the statute, but rather serves as a “nexus”

requirement, providing a basis for Congress’s exer-

cise of power under the Commerce Clause. When

Congress amended the ADEA in 1984 to provide ex-

plicitly for extraterritorial application, it did not al-

ter the virtually identical Commerce Clause language

found in that statute. See 29 U.S.C. § 630. Rather,

it exempted foreign employers not controlled by

United States employers. Thus, Congress clearly does

not view the Commerce Clause language as a geo-

graphic restriction on the scope of an employment

discrimination statute.

The majority also argues that Congress could not

have intended Title VII to apply extraterritorially

because Congress failed to exempt foreign employers

that hire United States citizens. It is true that the

amendments to the ADEA addressed this concern

® See Age Discrimination in Employment Act, 29 U.S.C.

§ 623 (80 (2) (“The prohibitions of this section shall not

apply where the employer is a foreign person not controlled

by an American employer.”). This provision was aparently

added on the suggestion of the EEOC. See Age Discrimina-

19a

and that an attempt to apply the statute to foreign

corporations employing United States citizens abroad

could offend the sovereignty of other nations. The

legislative history explaining the alien exemption pro-

vision of Title VII refers explicitly, however, to “an

American enterprise.” It follows that Congress in-

tended Title VII to apply extraterritorially only to

American employers. However, even if the Com-

merce Clause language to which the majority re-

fers, 29 U.S.C. § 2000e(b), is the only limitation on

employers” subject to the statute’s extraterritorial

application, Congress has elsewhere provided an equal

or broader jurisdictional grant in a statute and left

to the courts the task of applying Commerce Clause

analysis and principles of international law to de-

termine whether there is an adequate basis for the

exercise of jurisdiction over the acts of a particular

defendant occurring outside the territory of the

United States. See, e.g., American Rice, Inc. v. Ar-

kansas Rice Growers Cooperatives Ass’n, 701 F.2d

408 (5th Cir.1983) (Lanham Act); Laker Airways

Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909

( — (Sherman Act).“

majority next points to Title VII enforceme

provisions relating to state law conflicts, see 42 USC.

tion and Overseas Americans, 1983: Heari

. : earing Before th

Subcomm. on Aging of the Senate Comm. on * Hw.

man Resources, 98th Cong., Ist Sess. 5 (1983).

In most cases, a court would probably 8

—— —— poautes os onan

decline to exercise jurisdiction, based on the same principles

of international law discussed in my panel dissent. See

Boureslan, 857 F.2d at 1025-31. The only question before

— 0 Gand Gane a co

N ˖ 1 N citizen employed abroad by an

* _ ~~; > ° rr 9 ‘> wr. 4

$§ 2000e-5(c), (d), (e), arguing that “[i]f Congress

had intended the Act to apply in foreign n re

we would expect Congress to have even more

careful to address conflic:s with foreign discrimina-

tion laws.” Looking again to the amended ADEA,

which contains a similar federal-state relationship

clause, 29 U.S.C. § 633, I note that Congress saw no

need to add a provision addressing conflicts with over-

extraterritorial scope. Congress did, however, amend

the ADEA’s “BFOQ” provision, specifying that ac-

tions otherwise prohibited under the Act shall not be

unlawful if compliance with the ADEA’s provisions

“would cause such employer, or a corporation con-

trolled by such employer, to violate the laws of the

country in which such workplace is located.” 29

U.S.C. § 623(f)(1). This circuit has already inter-

preted the BFOQ provision of Title VII in this fash-

ion. Kern v. Dynalectron Corp., 577 F.Supp. 1196

(N.D. Tex. 1983) (assuming without addressing the

extraterritorial coverage of Title VII), aff'd on basis

of district court opinion, 746 F.2d 810 (5th Cir.

1984)."

2 majority finds it curious that Congress made

no special provisions in Title VII either for the venue

of cases arising from extraterritorial violations or for

the investigatory powers of the Equal Employment

1! In Kern. a United States helicopter company required

all its pilots who flew from Jeddah to Mecca, Saudi Arabia,

to be Moslem. The defendant company argued that religion

was a bona fide occupational qualification because Saudi law

prohibited non-Moslems from entering the holy area of Mecca

under penalty of death. We affirmed the district court’s find-

ing that the employer had not violated Title VIL

— —

21a

Oppportunity Commission (“EEOC”) in such cases.

First, Title VII provides for venue not only in the

district in which the violation was committed, but

also in either the district where relevant employment

records are administered, or the district where the

aggrieved employee would have worked but for the

unlawful employment practice. 42 U.S.C. § 2000e-

5(f)(3). Venue in one of the latter two districts

would usually be available in the situation—cer-

tainly not uncommon—involving the temporary for-

eign assignment of an employee advancing on the

corporate track of an American multinational corpo-

ration. In addition, Title VII provides that if an

employer is not “found” within any of the first three

specified districts, venue is proper “in the judicial

district in which the respondent has his principal

office.” Id. An American enterprise will generally

have a principal office in the United States.”

Second, the geographical limitations on the EEOC’s

investigative powers—in both the original Act and

in the 1972 amendments—apply only to the EEOC’s

power to compel compliance with administrative pro-

cedures. See 42 U.S.C. S 2000e-9 (incorporating 29

U.S.C. § 161, which allgyws the EEOC to compel the

appearance of witnesses and the production of docu-

ments from anywhere within the United States or

its territories). There is nothing in Title VII that

precludes the EEOC from attempting to obtain the

employer’s voluntary cooperation in investigation and

12 It is not necessary for purposes of this appeal to de-

lineate the circumstances under which an American parent

corporation will exercise sufficient control over its foreign

subsidiary so that the enterprise will constitute an American

employer.

22a

conciliation efforts.“ It would be unreasonable [sic *]

for Congress to conclude that United States citizens

are entitled to the protections of Title VII abroad, but

to decline to authorize the EEOC to expend the time

or resources necessary to compel compliance with an

investigation of a case in which documents and wit-

nesses are located in other countries. Furthermore,

American enterprises likely maintain records in their

home offices as well as abroad, or exercise sufficient

control over their foreign operations to request the

production of witnesses and documents through in-

ternal channels. Thus, the EEOC clearly has the

power to subpoena the home office for evidence nec-

essary to an investigation.

The majority finally cites the ADEA as a good

example for the proposition that Congress knows how

to give extraterritorial effect to a statute when it de-

sires to do so. What the majority fails to mention

is that at the time Congress amended the ADEA,

courts had consistently held that the ADEA did not

apply extraterritorially. See e.g., Cleary v. United

States Lines, Inc., 728 F.2d 607 (3d Cir. 1984);

Zahourek v. Arthur Young & Co., 567 F.Supp. 1453

(D.Colo.1983), aff'd, 750 F.2d 827 (10th Cir.1984).

These cases had distinguished the ADEA from Title

VII because the ADEA incorporates the geographic

% The ADEA, unlike Title VII, incorporates the enforce-

ment provisions of the Fair Labor Standards Act, 29 U.S.C.

§ 201 et seq. Under the relevant provision in the ADEA, the

EEOC’s enforcement powers extend only to cooperation with

state agencies and voluntary conciliation attempts. See 29

U.S.C. § 626. Congress left the EEOC enforcement provi-

sions of the ADEA unchanged when it explicitly provided

for extraterritorial application of the ADEA in 1984.

*In the slip opinion, the word used was “reasonable.”

Based upon the context, we believe “reasonable” was intended.

23a

restrictions of the Fair Labor Standards Act,“ which

Title VII does not, and contains no alien exemption

clause such as is found in section 702 of Title VII.

See Cleary, 728 F.2d at 609; Zahourek, 567 F.Supp.

at 1456; see also Pfeiffer v. Wm. Wrigley Jr., Co.,

755 F.2d 554, 559 (7th Cir.1985). Every court pre-

viously faced with the issue of Title VII’s scope either

had concluded that the alien exemption provision evi-

denced an intent to apply the Act extraterritorially,

or had simply assumed jurisdiction without discus-

sion. See Bryant v. International Schools Serv., Inc.,

502 F.Supp. 472 (D.N.J.1980), rev’d on other

grounds, 675 F.2d 652, 577 n. 23 (3d Cir.1982) ;

Seville v. Martin Marietta Corp., 638 F.Supp. 590

(D.Md.1986) (adopting Bryant’s reasoning); Love

v. Pullman Co., 13 Fair Empl.Prac.Cas. (BNA) 423,

426 n. 4 (D.Colo.1976), aff'd on other grounds, 569

F.2d 1074 (10th Cir.1978).

In amending the ADEA, Congress also had before

it the testimony of the EEOC that Title VII applied

abroad. See Age Discrimination and Overseas Amer-

icans, 1983: Hearing Before the Subcomm. on Aging

of the Senate Comm. on Labor and Human Resources,

98th Cong., Ist Sess. 3 (1983). Senator Charles

Grassley, Chairman of the Subcommittee on Aging

of the Committee on Labor and Human Resources,

and sponsor of the bill extending the ADEA to citi-

zens employed abroad, stated when he introduced the

ADEA amendment that legislation was necessary to

correct the unintended “anomaly” of applying the

ADEA only domestically, while Title VII was ap-

Section 626(b) of the ADEA incorporates 29 U.S.C.

§ 213(f) of the Fair Labor Standards Act, which excludes

“any employee whose services during the workweek are per-

formed in a workplace within a foreign country.”

24a

plied both home and abroad. 129 Cong.Rec. $17,018

(daily ed. Nev. 18, 1983). Thus, there is every in-

dication that when Congress amended the ADEA in

1984, it intended simply to make the scope of the Act

coextensive with that of Title VII.“ It would other-

wise seem anomalous that Congress would desire the

elimination of extraterritorial workplace discrimina-

tion based only on an employee’s age, and not on an

employee’s race, color, religion, sex, or national origin

—categories that have traditionally enjoyed height-

ened constitutional scrutiny and great legislative con-

cern as impediments to equal opportunities.

International Law

In his panel majority opinion, Judge Davis rejects

the evidence of congressional intent to apply Title

VII extraterritorially as inadequate, referring to pol-

icy considerations—including religious and cultural

differences with other nations—that purportedly mili-

tate against such an application of the statute. See

Boureslan, 857 F.2d at 1020. Unless, however, the

conflicts of law to which the majority refers rise to

the level of a violation of international law, they are

not a sufficient basis on which to reject categorically

the clear evidence of congressional intent existing in

this case.

As I explained in my panel dissent, extraterritorial

application of Title VII would not violate interna-

tional law. See id. at 1024-31. I will not here repeat

15 See also the report of the Committee on Labor and Human

Resources, which describes the amendment of the ADEA to

provide for extraterritorial coverage of United States citi-

zens as a “minor change[]” in the Act. S.Rep. No. 98-467,

98th Cong., 2d Sess. 2 (1984), reprinted in 1984 U.S.Code

Cong. & Ad.News 2974, 2975.

— — —

25a

that lengthy discussion. Briefly, applying the test set

forth in section 403 of the Restatement (Third) of

Foreign Relations Law, it clearly is not unreasonable

for the United States to require that American com-

panies comply with Title VII in their employment of

United States citizens in other countries: The United

States has a strong and legitimate interest in protect-

ing citizens employed abroad by American corpora-

tions from discrimination in employment; Title VII

is consistent with the norms of the international com-

munity, which has adopted numerous accords con-

demning discrimination, including discrimination in

employment; American citizens have a legitimate ex-

pectation that they will not lose the protection of

Title VII when they accept a position with the for-

eign office of an American enterprise; and the poten-

tial for conflicts with foreign law are minimized by

the fact that the statute applies only to United States

nationals and by the BFOQ defense that has been in-

terpreted in an opinion endorsed by this court to

exempt an employer from liability where a violation

of Title VII is compelled by foreign law. See Kern,

577 F.Supp. at 1201.

This is not to say that the exercise of extraterri-

torial jurisdiction under Title VII would be appropri-

ate in every case. However, the fact that we can

hypothesize situations in which a conflict would arise

does not mean that the statute must be construed so

that it never applies abroad. “Because Congress

can neither anticipate nor resolve all conflicts with

foreign jurisdiction,” it necessarily relies upon the

judiciary to minimize conflicts of jurisdiction by ex-

ercising a jurisdictional rule of reason in individual

eases. Laker Airways, 731 F.2d at 952 n. 169. The

Restatement does not purport to eliminate concur-

26a

rent jurisdiction. Rather, it recognizes that two or

more states may exercise jurisdiction over the same

activities or individuals when the exercise of juris-

diction by each state is reasonable. The Restatement

provides mechanisms for courts to moderate the exer-

cise of jurisdiction when conflicts do arise. This is a

process that most courts of appeals, including this

one, have employed in other cases involving extrater-

ritorial application of United States law. See, e. g.,

American Rice, 701 F.2d at 414.

The concern voiced by the majority—that extrater-

ritorial application of Title VII will create conflicts

of law—is, thus, adequately addressed by the provi-

sions of the statute itself and by the same principles

of international law that have traditionally allowed

United States courts to moderate their exercise of

extraterritorial jurisdiction in the case of actual con-

flicts of law.

Conclusion

In enacting Title VII of the Civil Rights Act of

1964, Congress expressed its determination that all

Americans are entitled to be free of the intolerable

barrier of discrimination in employment based on

race, color, religion, sex or national origin. Under the

majority’s holding, however, Congress’s commitment

represents merely an empty promise to the thousands

of American women and minorities employed in other

countries by American multinational firms. Such in-

dividuals face the dilemma of accepting an assign-

ment abroad, often considered to be a lucrative op-

portunity and, in many such multinational enter-

prises, a prerequisite for career advancement at

home, only at the cost of relinquishing the protec-

tions and remedies of Title VII upon crossing the

territorial horders of the United States. Employment

27a

discrimination by American employers against Amer-

ican citizens—wherever practiced—has devastating

effects both on the economy of this country and on the

dignity and livelihoods of Americans who have come

to rely over the past quarter of a century on achieve-

ments made possible, in part, by civil rights legisla-

tion. The salutary goals of Title VII cannot be fully

realized if the fortuitous location of an American

employee at the overseas office of an American firm

could mean the difference between equal opportunity

and discrimination at will.

Congress certainly recognized the potential for

abuse represented by American multinational con-

cerns when it enacted Title VII, which must explain

its inclusion of section 702 of the Act, the alien ex-

emption clause. Balancing the broad remedial goals

of this civil rights statute against the potential con-

flicts that would arise in attempting to regulate the

employment of aliens outside the United States, Con-

gress followed the reasoning of the Supreme Court

in Foley Bros. and drew an extraterritorial line based

on nationality.

There is no justification for disregarding the clear

evidence of congressional intent to apply Title VII

to United States citizens employed in other countries

by American enterprises. Congress made the judg-

ment in 1964 in Title VII, just as it did again in

1984 in the ADEA amendments, that American na-

tionals employed by United States employers are en-

titled to the same protection from employment dis-

crimination abroad as they enjoy at home. If we are

not to substitute our policy judgments for those of

Congress, we must give effect to Congress’s intent to

apply Title VII extraterritorially. I respectfully dis-

sent from the majority’s refusal to do so.

28a

APPENDIX B

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

No. 87-2206

ALI BOURESLAN, PLAINTIFF-APPELLANT,

ARAM CO, ARABIAN AMERICAN OIL COMPANY

and ARAMCO SERVICE COMPANY,

DEFENDANTS-APPELLEES.

Oct. 17, 1988

Before KING* and DAVIS, Circuit Judges, and

PARKER.“ District Judge.

W. EUGENE DAVIS, Circuit Judge:

Plaintiff, a naturalized citizen of the United States,

brought an employment discrimination suit—predi-

cated upon Title VII and state law causes of action

—against his employer, a United States corporation

whose principal place of business is in Saudi Arabia.

In his suit, plaintiff charged that while he was work-

ing in Saudi Arabia, his employer discriminated

against him on the basis of his race, religion, and

national origin. The employer contested plaintiff's

claims of discrimination and, in addition, moved the

* Formerly Judge Randall.

** District Judge of the Eastern District of Texas, sitting

by designation.

district court to dismiss the entire action. The em-

ployer argued that the reach of Title VII does not

extend to United States citizens employed abroad by

United States employers and, therefore, that the dis-

trict court lacked subject matter jurisdiction over

plaintiff's claim. The district court agreed, granted

the employer’s motion, and dismissed plaintiff’s suit.

On appeal, plaintiff—joined by the Equal Employ-

ment Opportunity Commission as amicus curiae—

urges us to conclude, that Congress intended Title

VII to apply extraterritorially to protect United

States citizens employed by United States employers.

We find, however, that the rules of statutory con-

struction which control our review of Title VII do not

permit the conclusion plaintiff urges—we cannot say

that Congress, through either the language of Title

VII or its legislative history, clearly expressed its

inteat that Title VII be applied extraterritorially.

Therefore, we conclude that Title VII does not offer

plaintiff an available remedy for his claimed discrim-

ination and affirm the district court.

This appeal presents a single issue: Does Title VII

regulate the employment practices of businesses

which, although incorporated in the United States,

employ citizens of the United States in foreign coun-

tries? The question reaches us as a result of the

employment relationship between Ali Boureslan,

Arabian American Oil Company (Aramco), and

Aramco Services Company (ASC). In 1979, Boures-

lan—a naturalized United States citizen who was

born in Lebanon—went to work as an engineer for

ASC in Houston, Texas. ASC is a Delaware corpora-

tion with its principal place of business in Houston;

ASC is a subsidiary of Aramco, licensed to do busi-

ness in Texas, with its principal place of business in

Dhahran, Saudi Arabia. In November 1980, Boures-

lan requested a transfer to Aramco. Because Aramco

explores, produces, and refines oil and gas exclusively

within the Kingdom of Saudi Arabia, Boureslan’s

transfer from ASC to Aramco also meant a transfer

from the United States to Saudi Arabia.

Shortly after beginning work in Saudi Arabia,

Boureslan began having altercations with his super-

visor. According to Bourleslan, the altercations were

the result of a “campaign of harassment” which the

supervisor initiated—a campaign which took the form

of racial, religious, and ethnic slurs and which cul-

minated in Boureslan’s termination on June 16, 1984.

After he was fired, Boureslan first filed charges

against Aramco with the Equal Employment Oppor-

tunity Commission (EEOC) in the United States and,

later, instituted this suit against both Aramco and

ASC in the United States District Court for the

Southern District of Texas. In each case, the focus

of Boureslan’s attack was the discriminatwry treat-

ment which he allegedly received while in Saudi

Arabia from his Aramco supervisor. In his lawsuit,

Bourleslan sought relief under both Title VII of the

Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.,

and state law. In response to the lawsuit, both

Aramco and ASC filed answers denying liability and

separately filed motions to dismiss for lack of subject

matter jurisdiction. ASC stressed two reasons why

Boureslan’s claims against ASC should be dismissed.

First, ASC argued that, at most, only Aramco could

be liable to Boureslan since, according to ASC,

Boureslan’s transfer from ASC to Aran terminated

the employment relationship between ASC and

31a

Boureslan. Second, ASC argued that Boureslan failed

properly to exhaust his administrative remedies un-

der Title VII with respect to ASC because Boureslan

named only Aramco in the one grievance he filed with

the EEOC.

While ASC’s grounds for dismissal challenged only

the propriety of its own inclusion in Boureslan’s law-

suit, Aramco’s motion to dismiss raised a more sweep-

ing challenge—a challenge which, if true, required a

dismissal of the lawsuit against both Aramco and

ASC. Aramco argued that the protections of Title VII

do not extend extraterritorially and, consequently,

that Title VII offers no protection to Boureslan for

acts of discrimination which occurred in Saudia Ara-

bia. Boureslan contested this interpretation, and ar-

gued that the clear and express terms of Title VII

demonstrate Congress’ intent to protect United States

citizens from employment discrimination by American

employers regardless of where the discrimination oc-

curs. In an opinion dated January 27, 1987, the

district court considered carefully the question of

Title VII’s geographic reach. After examining Title

VII's language and legislative history, Supreme Court

cases on extraterritorial application of federal stat-

utes, and other existing case law on the scope of Title

VII, the district court concluded that Title VII does

not afford extraterritorial protection. Bowreslan v.

Aramco, 653 F.Supp. 629, 631 (S.D. Tex.1987).

Consequently, the court dismissed Boureslan’s Title

VII action against Aramco and ASC for lack of sub-

ject matter jurisdiction; it also dismissed Boureslan’s

state law claims for lack of pendent jurisdiction, and

entered final judgment in favor of both defendants.

On appeal, Boureslan asks us to find that Congress

intended Title VII to be applied extraterritorially.

II.

A special set of rules of statutory interpretation

are in place to assist us in determining whether Con-

gress intended to give a statute application outside

this country. We first examine those rules.

In Foley Bros., Inc. v. Filardo, 336 U.S. 281, 69

S.Ct. 575, 93 L.Ed. 680 (1949), the Supreme Court

considered whether a federal statute prohibiting

workdays of longer than eight hours without over-

time pay applied to a contract between the United

States and a private contractor for work performed

in a foreign country. Id. at 282, 69 S.Ct. at 576.

As the Court saw it:

The canon on construction which teaches that

legislation of Congress, unless a contrary intent

appears, is meant to apply only within the terri-

torial jurisdiction of the United States, is a valid

approach whereby unexpressed congressional in-

tent may be ascertained. It is based on the as-

sumption that Congress is primarily concerned

with domestic conditions. We find nothing in the

Act itself, as amended, nor in the legislative his-

tory, which would lead to the belief that Con-

gress entertained any intention other than the

norma! one in this case.

Id. at 285, 69 S.Ct. at 577 (citation omitted).

See also McCulloch v. Sociedad Nacional de Mari-

neros de Honduras, 372 U.S. 10, 21-22, 83 S.Ct. 671,

677-78, 9 L.Ed.2d 547 (1963).

This court has consistently applied the presumption

against extraterritoriality. In United States v.

Mitchell, 553 F.2d 996 (5th Cir.1977), we refused to

read extraterritorial application into the Marine

Mammal Protection Act. In ruling against extrater-

congressional expression of intent to the contrary

For example, in Pfeiffer v. Wm. Wrigley, Jr. Co.,

755 F.2d 554 (7th Cir.1985), the Seventh Circuit

considered the extraterritorial application of the

ADEA. After finding that the statute did not speak

directly to the issue of extraterritorial application,

the court applied the presumption against extraterri-

torial application, noting that It Ihe fear of outright

collisions between domestic and foreign law—collisions

both hard on the people caught in the cross-fire and

a potential source of friction between the United

States and foreign countries—lies behind the pre-

sumption against extraterritorial application of fed-

eral statutes.” Id. at 557. Likewise in Cleary v.

United States Lines, Inc., 728 F.2d 607 (3d Cir.

1984), the Third Circuit rejected the application of

the ADEA extraterritorially without “affirmative evi-

dence of congressional intent.” See also Air Line

Stewards and Stewardesses Ass'n Int'l v. Trans

World Airlines, Inc., 273 F.2d 69, 70 (2d Cir.1959),

cert. denied, 362 U.S. 988, 80 S.Ct. 1075, 4 L.Ed.2d

1021 (1960) (denying extraterritorial application of

the Railway Labor Act (RLA)); Air Line Stewards

and Stewardesses Ass'n Int'l v. Northwest Airlines,

34a

. F.2d 170, 178 (8th Cir.), cert. denied, 361

64 — 80 S. Ct. 208, 4 L. Ed 2d 156 (1959) (deny-

ing extraterritorial application of RLA); Air Line

Dispatchers Ass'n v. National Mediation Bd., 189

F.2d 685, 690-91 (D.C.Cir.), cert. denied, 342 U.S.

849, 72 S.Ct. 77, 96 L.Ed. 641 (1951) (denying

extraterritorial application of RLA); see generally

Restatement (Second) of the Foreign Relations Law

of the United States § 38 (1965).

Against this backdrop, we examine the language

and legisla tive history of Title VII to determine

whether Congress intended the act to have extrater-

ritorial application.

III.

Boureslan’s discrimination case is based upon

§ 703(a)(1) of Title VII which provides:

It shall be an unlawful employment practice for an

employer to fail or refuse to hire or to discharge

sex, or national origin.

42 U.S.C. §$2000e-2(a)(1).

Extraterritorial application is not directly

dressed in Title VII. Section 2000e(b) defines

ployer” under the Act as including any “person

i among the several States; or between a State and

— place outside thereof.“ 42 U.S.C. § 2000e(g).

Boureslan, however, relies on § 2000e-1 commonly

referred to as the alien exemption provisior which

provides that “[t]his title shall not apply to an em-

ployer with respect to employment of aliens outside of

any state.“ Boureslan argues that a negative in-

ference” should be drawn from this language that

Congress intended Title VII to cover United States

citizens working abroad for United States employers.

Boureslan argues that the alien exemption provision

has no purpose if Title VII is not applied to protect

citizens extraterritorially because in the absence of

this provision neither citizens nor aliens would be pro-

tected while working outside the country. Boureslan

notes that one district court has accepted this argu-

ment. Bryant v. International School Servs., 502 F.

Supp. 472 (D.N.J.1980), rev’d on other grounds, 675

F. 2d 562 (3d Cir.1982).

But the alien exemption provision does have a pur-

pose even if we accept the district court’s conclusion

1 Eight years after the enactment of Title VII, Congress

added the following language to extend protection of the Act

to federal employees, and included the alien exemption lan-

guage:

All personnel actions affecting employees or applicants

for employment (except with regard to aliens employed

outside the limits of the United States) in military de

partments ..., in executive agencies... in the United

States Postal Service and the Postal Rate Commission,

in those units of the government of the District of Co-

lumbia having positions in the competitive service, and in

those units of the legislative and judicial branches of the

Federal Government having positions in the competitive

service, and in the Library of Congress shal] be made free

from any discrimination based on race, color, religion,

sex, or national origin. (emphasis added)

42 U.S.C. § 2000e-16(a).

36a

that Title VII does not protect citizens abroad. First,

no one disputes that the provision excludes coverage

to aliens employed outside the states. Second, in

Espinoza v. Farah Mfg. Co., 414 U.S. 86, 95, 94

S.Ct. 334, 340, 38 L.Ed.2d 287 (1973), the Supreme

Court attached another meaning to the provision's

domestic scope. The Court concluded that the alien

exemption provision reflects a congressional intent to

provide Title VII coverage to aliens employed within .

the United States.

‘Thus, we do not face a choice between attaching

appellant’s negative inference to the alien exemption

provision or stripping the provision of all purpose. If

we decline to give the alien exemption provision the

interpretation appellant seeks, the provision still is a

meaningful and useful part of the Act. Appellant has

not persuaded us that the provision’s language merits

an interpretation against extraterritorial application

of the Act. 3

Boureslan argues next that the legislative history

of Title VII, when coupled with the statutory lan-

guage, evidences a clear congressional intent to apply

the Act extraterritorially. It is to the legislative his-

tory, therefore, that we must now turn.

Before considering the particular portions of the

legislative history pointed to by Boureslan, it is im-

portant that we define the role allocated to legislative

history in statutory interpretation. Legislative his-

tory is relegated to a secondary source behind the lan-

guage of the statute in determining congressional in-

tent: even in its secondary role legislative history

must be used “cautiously.” United States v. Smith,

795 F.2d 841 (9th Cir.1986). Courts are not free to

37a

substitute legislative history for the language of the

Act and legislative history is not an adequate sub-

stitute for congressional action. Piper v. Chris-Craft

Indus., Inc., 430 U.S. 1, 97 S.Ct. 926, 5 L.Ed.2d 124

(1977) ; United States v. Devall, 704 F.2d 1513 (11th

Cir. 1983); Aronsen v. Crown Zellerbach, 662 F.2d

584 (9th Cir. 1981), cert. denied, 459 U.S. 1200, 113

S.Ct. 1183, 75 L.Ed.2d 431 (1983). The Supreme

Court has repeatedly stated that “‘[a]bsent a

clearly expressed legislative intention to the contrary,

[statutory] language must ordinarily be regarded as

conclusive.’” Escondido Mut. Water Co. v. La Jolla

Indians, 466 U.S. 765, 772, 104 S.Ct. 2105, 2110, 80

L.Ed.2d 753 (1984) (quoting North Dakota v. United

States, 460 U.S. 300, 312, 103 S.Ct. 1095, 1102, 75

L.Ed.2d 77 (1983); Consumer Prod. Safety Comm’n

v. GTE Sylvania, Inc., 447 U.S. 102, 100 S.Ct. 2051,

64 L.Ed.2d 766 (1980).

The EEOC in its amicus curiae brief points to

three statements in the legislative history that, it ar-

gues, supports its interpretation of the Act. First,

the EEOC notes that in the House report that accom-

panied the Act to the Senate floor, the passage of

Title VII was declared necessary:

[t]o remove obstructions to the free flow of inter-

state commerce and to insure the complete and

full enjoyment by all persons of the rights, privi-

leges, and immunities secured and protected by

the Constitution.

House Report on Civil Rights Act of 1964, H.R.Rep.

No. 914, 88th Cong., Ist Sess. (1963), reported in

1964 U.S.Cong. Code & Admin.News 2391, 2402.

Second, EEOC stresses a comment by Representative

William McCulloch, ranking minority member of the

House Judiciary Committee, in which McCulloch

stated that “[a] key purpose of the bill, then, is to

secure to all Americans the equal protection of the

laws of the United States and of the several states.”

Id., reprinted in 1964 U.S. Cong. Code & Admin.News

at 2488. EEOC also points out that the minority re-

port states that [the rights of citizenship mean

little if an individual is unable to gain the economic

wherewithall to enjoy or properly use them.” Id. at

2516. The EEOC argues that these general policy |

statements reflect a strong intent by Congress to com-

bat employment discrimination on all fronts without

any geographic limits. Thus, the EEOC asserts that

the omission of any mention of extraterritorial appli-

caton supports, rather than detracts, from their posi-

tion.”

These references to Title VII’s legislative history

fall far short of the clear expression of congressional

intent required to overcome the presumption against

extraterritorial application. The statements, care-

fully taken from a voluminous legislative history, are

no more specific than the statutory language itself.

To rely on such general policy statements would effec-

tively adopt a presumption in favor of extraterritorial

application. This is particularly true when the legis-

2In Espinoza, 414 U.S. at 94, 94 S.Ct. at 339, the Court

noted that the EEOC’s interpretation of Title VII is generally

entitled to deference. However, such interpretations are not

controlling on the courts. Because this is a jurisdictional

issue with little or no statutory language or legislative history,

and one in which the EEOC has developed no particular ex-

pertise, we give the EEOC’s interpretation less deference than

usual. This is particularly appropriate given the traditional

presumption against extraterritoriality. See General Electric

Co. v. Gilbert, 429 U.S. 125, 141-42, 97 S.Ct. 401, 410-11, 50

L.Ed.2d 343 (1976) ; Skidmore v. Swift & Co., 323 U.S. 134,

140, 65 S.Ct. 161, 164, 89 I. Ed. 124 (1944).

39a

lative history contains numerous statements that ar-

guably favor geographic limits for Title VII.

For example, the Act’s language and legislative

history make repeated references to the “United

States,” “states,” and procedures relating to state

proceedings without parallel references to foreign

countries. 42 U.S.C. 2000e(i) defines “state” to in-

clude the states and other areas under United States

jurisdiction, with no reference to foreign countries.

References in the legislative history highlight con-

cerns about employment discrimination problems in

the states, Senator Hubert Humphrey, 110 Cong. Rec.

6550 (1964); the effect of Title VII on southern

states versus other states, Senator Richard Russell,

110 Cong.Rec. 14301 (1964); and deferral to state

employment laws, Congressman Emanuel Celler, 110

Cong. Rec. 1521 (1964).

Moreover, Congress deleted reference to “foreign

commerce” and “foreign nations” from earlier House

versions of Title VII.* While these references and de-

letions are not conclusive legislative support, they are

certainly as persuasive as policy statements in the

legislative history offered by the EEOC.

EEOC also points to a reference in the alien exemp-

tion provision contained in a house report rendered in

connection with H.R. 405, a concurrent attempt to

fashion equal employment legislation during the 88th

Congress’ first session in 1963. This report was

placed in the record in the hearings for H.R. 7152,

These deletions are reflected in an annotated copy of the

House bill that Senator Dirksen inserted into the Congres-

sional Record on June 5, 1964, an anticipation of debate on

the Senate’s substitute bill. Senator Everett Dirksen, 110

Cong.Rec. 12811-817 (1964).

40a

which ultimately became the Civil Rights Act of 1963.

The report stated,

conflicts of law which might otherwise exist be-

tween the United States and a foreign nation in

the employment of aliens outside the United

States by an American enterprise.

the Judiciary, 88th Cong., Ist Sess. 2303 (1963).

EEOC urges us to interpret this language to reflect

an intent that, but for the alien exemption provision,

Title VII protects all persons employed overseas by

EEOC still must argue a negative inference. That is,

EEOC argues that Congress spoke by not speaking.

This silence will not reverse the presumption that this

legislation applies only to employees employed in the

United States.*

The colloborative [sic] nature of the way in which H.R.

405 found its way into H.R. 7152 further dilutes the report’s

impact. The General Subcommittee on Labor voted on June 20,

1968, to report H.R. 405 to the full Committee on Education

4la

Finally, Boureslan and the EEOC advance a num-

ber of policy arguments in favor of the extraterri-

torial application of Title VII. These arguments go to

the inequity of denying Americans employed abroad

protections to which they are entitled in the United

States. Although these arguments have obvious ap-

peal, we cannot ignore strong countervailing policy

arguments against the application of Title VII abroad.

The religious and social customs practiced in many

countries are wholly at odds with those of this coun-

try. Requiring American employers to comply with

Title VII in such a country could well leave Ameri-

can corporations the difficult choice of either refusing

to employ United States citizens in the country or dis-

continuing business. Given the serious, potentially

devisive [sic] policy considerations for and against

application of the Act outside the country, the pau-

city of reference to such an application either in the

Act itself or the debates in Congress is a compelling

argument that Congress did not turn its attention to

this possibility. It is not for this court to decide this

policy issue for the legislative branch.

While the judicial function in construing legisla-

tion is not a mechanical process from which judg-

ment is excluded, it is nevertheless very different

from the legislative function. Construction is not

and sending it to the full House.

42a

and must avoid “that retrospective ex-

pansion of meaning which deserves the

stigma of judicial ” To blur the dis-

tinctive functions of the legislative and the ju-

dicial processes is not conductive to responsible

legislation.

Addison v. Holly Hill Fruit Prods. Co., 322 U.S. 607,

618, 64 S.Ct. 1215, 1221, 88 L.Ed. 1488 (1944) (cita-

tion omitted).

IV.

The presumption against extraterritorial applica-

tion establishes a high hurdle for appellant’s argu-

ments to overcome. Neither the statute’s bare lan-

guage nor the sparce [sic] indirect language on the

subject in the legislative history persuade us that he

has cleared this hurdle.

AFFIRMED.

KING, Circuit Judge, dissenting:

Today, in the first circuit court opinion to consider

expressly the extraterritorial application of Title VII.“

the majority holds that Title VII affords no protection

Every district court that has considered the question has

held that Title VII does apply extraterritorially. Bryant v.

International Schools Services, Inc., 502 F Supp. 472 (D. NJ.

1980), rev'd on other grounds, 675 F.2d 562, 577 n. 23 (3d

Cir.1982) (declining to reach question of Title VII's extra-

territorial application) ; Seville v. Martin Marietta Corp., 638

F.Supp. 590 (D.Md.1986) (adopting Bryant's reasoning) ;

Love v. Pullman, 13 Fair Empl.Prac.Cas. (BNA) 423, 426

n. 4 (D.Colo.1976), aff'd on other grounds, 569 F.2d 1074

(10th Cir.1978) ; see also Kern r. Dynaelectron, 577 F Supp.

1196 (N.D.Tex.1983) (applying Title VII extraterritorially

without expressly considering threshold jurisdictional issue),

aff'd mem, 746 F.2d 810 (5th Cir.1984).

of Title VII reveals that Congress did not intend the

protections of Title VII to be so restricted, and be-

cause the extraterritorial application of Title VII to

U.S. nationals would not violate principles of inter-

national law, I must respectfully dissent from the

majority’s holding.

J. The Presumption Against Extraterritoriality

It is undisputed that Congress had the power to

extend Title VII's protections extraterritorially. See

Steele v. Bulova Watch Co., 344 U.S. 280, 282-83, 73

S.Ct. 252, 253-54, 97 L.Ed. 319 (1952); Foley Bros.

v. Filardo, 336 U.S. 281, 284, 69 S.Ct. 575, 577, 93

L.Ed. 680 (1949); United States v. Mitchell, 553

F.2d 996, 1001 (5th Cir.1977). Nationality is an

accepted basis for the exercise of jurisdiction. Thus,

a state may prescribe law relating to the conduct of

its nationals, even when that conduct occurs outside

of the state’s territory. See Steele, 344 U.S. at 285-

86, 73 S.Ct. at 255-56; Blackmer v. United States,

284 U.S. 421, 436-37, 52 S.Ct. 252 254-55, 76 L.Ed.

375 (1932); Mitchell, 553 F.2d at 1001; Laker Air-

ways v. Sabena, Belgian World Airlines, 731 F.2d

909, 922 (D.C. Cir. 1984); Restatement (Third) of the

Foreign Relations Law of the United States § 402

(1987) [hereinafter Restatement]. The only ques-

tion in this case is whether Congress exercised that

power.

The majority correctly notes tha. because jurisdic-

tion to prescribe is ordinarily exercised on the basis

44a

of territory rather than nationality,’ there is a pre-

sumption that Congress intends legislation to apply

only within the territorial jurisdiction of the United

States, unless a contrary intent appears. Steele, 344

U.S. at 285, 73 S.Ct. at 255; Foley Bros., 336 U.S. at

285, 69 S.Ct. at 577-78; Blackmer, 284 U.S. at

437, 52 S.Ct. at 254-55; Mitchell, 553 F.2d at 1002.

The majority goes astray, however, in its determina-

tion of what constitutes an expression of “contrary

intent” sufficient to overcome the presumption.

As will be demonstrated more fully below, this is

not a case in which the claim of extraterritorial juris-

diction is based solely on the broad jurisdictional lan-

guage of the statute. Rather, the conclusion that Title

VII was intended to apply to U.S. citizens employed

abroad by U.S. corporations is compelled by canons

of statutory construction and is further supported by

legislative history. In rejecting these traditional

methods of statutory interpretation as inadequate, the

majority implies that nothing short of an explicit

statement by Congress will overcome the presumption.

The classic formulation of the presumption, how-

ever, does not impose such a stringent standard: “The

canon of construction which teaches that legislation

of Congress, unless a contrary intent appears, is

meant to apply only within the territorial jurisdiction

of the United States . is a valid approach whereby

unexpressed intent may be ascertained.”

Foley Bros., 336 U.S. at 285, 69 S.Ct. at 577 (em-

phasis added) (citation omitted); Natural Resources

Territory and nationality are the two universally recog-

nized bases for a state’s exercise of jurisdiction to prescribe

law. Restatement § 402 comment a (also noting that these

links may not be sufficient in all cases). Territoriality, how-

ever, “is considered the normal, and nationality an exceptional,

basis for the exercise of jurisdiction.” Id. comment b.

45a

Defense Council v. Nuclear Regulatory Comm'n, 647

F.2d 1345, 1357 n. 54 (D.C.Cir.1981). The most

established method of ascertaining unexpressed con-

gressional intent is to apply principles of statutory

construction, and to refer to the legislative history of

the act. See N. Singer, 2A Sutherland Statutory Con-

struction §§ 45.12, 48.06 (1984). Nothing in this

formulation indicates that a “contrary intent” suffi-

cient to overcome the presumption against extraterri-

toriality may not be determined according to these

ordinary methods.

Even if we add the adjective “clear” to our formu-

lation of the presumption, Mitchell, 553 F.2d at 1002.“

“clear” does not mean “express,” and there is no

reason why a “clear” intent to apply a statute extra-

territoriaily may not be determined with reference to

the rules of statutory construction, informed by legis-

lative history. At most, requiring a “clear” expres-

sion of congressional intent may mean that the broad

jurisdictional language of a statute is not sufficient in

itself to support the exercise of extraterritorial juris-

diction. See Mitchell, 553 F.2d at 1003-04. It should

be noted, however, that the Supreme Court hes found

such language sufficient to overcome the presumption.‘

Though Mitchell cites Steele and Foley Bros. as support

for its formulation of the presumption, neither case requires

that Congress’ expression of “contrary intent” be “clear.”

553 F.2d at 1002 (citing Steele, 344 U.S. at 285, 73 S.Ct. at

255, Foley Bros., 386 U.S. at 286, 69 S.Ct. 577-78). For the

purposes of this case, however, I recognize that we are bound

by Mitchell's interpretation of these cases.

‘In Foley Bros., the Supreme Court held that such language

was not sufficient to support extraterritorial jurisdiction. 336

U.S. at 287, 69 S.Ct. at 578-79. However, in Steele, decided

three years later, the Court found that the broad jurisdictional

46a

The extremely strong showing of congressional in-

tent which the majority requires is cleaily not com-

pelled by the presumption itself. Rather, it appears

that the majority has distorted the presumption in an

effort to transform it into something it is not: a

mechanism for evaluating potential conflicts of juris-

diction." The majority concludes in effect that the

policy implications of applying Title VII extraterri-

torially are so serious that we must require a more

explicit statement by Congress that it intended Title

VII to apply so broadly.

The majority’s conclusion might be appropriate if

Congress was, as the majority claims, silent on this

subject. But Congress was not silent on the subject.

47a

Rather, we have evidence that Congress did consider

the implications of applying Title VII extraterritori-

ally: Congress included in the statute a provision ex-

plicitly exempting aliens employed abroad by U.S.

corporations in order to avoid conflicts of law. It

follows logically that Congress believed that applica-

tion of Title VII to U.S. citizens employed abroad by

U.S. corporations would not present similar barriers

to the exercise of extraterritorial jurisdiction." In

concluding that the statute should not apply to U.S.

citizens employed abroad, the majority has therefore

done precisely what it cautions against: It has sub-

stituted its own policy judgment for that of Congress.

The majority's intuition is correct that the implica-

tions of applying a statute extraterritorially may be

such that the type of evidence presented in this case

would not be sufficient to support the exercise of extra-

territorial jurisdiction. For example, a greater show-

ing of congressional intent would be required to sup-

port an exercise of extraterritorial jurisdiction that

would violate international law. A statute may not

be construed to violate international law unless Con-

gress has, by an affirmative expression of its intent,

required that construction. McCulloch v. Sociedad

Nacional de Marineros de Honduras, 372 U.S. 10, 21-

22, $3 S.Ct. 671, 677-78, 9 L.Ed.2d 547 (1963) ; Wein-

berger v. Rossi, 456 U.S. 25, 32, 102 S.Ct. 1510, 1515-

16, 71 L.Ed.2d 715 (1982); see also Restatement

§ 114."

This argument is advanced in more detail below.

Although the majority cites McCulloch in its discussion

of the presumption against extraterritortality, McCulloch did

not turn on the issue of extraterritorial jurisdiction. Indeed,

the presumption against extraterritoriality is not even men-

tioned in the opinion. Rather, the Supreme Court in MeCwl-

This principle is a facet of the separate presump-

tion that Congress does not intend to violate interna-

tional law. See Restatement § 115 comment a (“It is

lech found that application of the National Labor Relations

Act to protect foreign seamen, employed on vessels registered

under a foreign flag, would violate

tion upon the presumption against extraterritoriality, but an

application of the long-standing principle that “an act of

Congress ought never to be construed to violate the law of

nations if any other possible construction remains.” Id.,

quoting The Charming Betsy, 2 Cranch 64, 118, 2 L.Ed. 208

(1804)); eccord Restatement section 114; see alse Rossi,

456 U.S. at 32, 102 S.Ct. at 1515-16 (citing MeCwlloch for

this proposition, and construing statute to avoid repudiation

McCulloch, therefore, stands for the proposition for which

it is ci : a statute may not be construed to vio

late international law unless Congress has. by an affirmative

expression of its intent, required that construction. 372 U.S.

at 21-22, 8&3 S.Ct. at 677-78; Rossi, 456 U.S. at . 102 S.Ct.

——— eG ee

49a

tend to violate international law is much greater than

that required to overcome the presumption against

extraterritoriality. While the two presumptions are

in some respects parallel, they should not be conflated

because not every exercise of extraterritorial jurisdic-

tion violates international law. A separate, more

stringent standard is properly reserved for cases in

which the exercise of jurisdiction, extraterritorial or

otherwise, would violate international law.

By requiring a more explicit showing of congres-

sional intent to apply Title VII extraterritorially—

without discussing whether extraterritorial application

of Title VII would violate international law—the ma-

jority has implicitly conflated the two standards and

has therefore defeated congressional intent without

sufficient justification.

While I agree with the majority that we must con-

sider the foreign policy implications of construing a

statute to apply extraterritorially, I do not believe

that its approach to these issues is satisfactory. We

should not defeat congressional intent to exercise ex-

traterritorial jurisdiction without engaging in a more

principled analysis of the implications of applying the

statute extraterritorially.

*In suggesting that we evaluate these concerns, I do not

propose that we overstep our judicial role by intruding on the

realm of international affairs which is properly the province

of the legislative and executive branches. I propose simply

that if the evidence of congressional intent to apply Title VII

extraterritorially is sufficient to overcome the (properly ap-

plied) presumption against extraterritoriality, we should give

effect to that intent unless we are precluded by principles of

international law from doing so. This undertaking is entirely

consistent with our judicial role. See Restatement § 111(1)-

(2) (International law is the law of the United States and

within the judicial power of the United States.)

50a

In order to evaluate the complex issues raised in

this case, we need a finer set of analytic tools than

those employed in the majority opinion. I therefore

propose an alternative framework that will, I believe,

provide a more satisfactory treatment of the issues

in this case.

The starting point for our analysis in this case

should be section 403 of the Restatement which pro-

vides that as a matter of international law “a state .

may not exercise jurisdiction to prescribe law with

respect to a person or activity having connections

with another state when the exercise of such juris-

diction is unreasonable.” 5 403 (1)). The factors

enumerated in the Restatement provide a framework

within which we can evaluate in a principled fashion

the implications of applying Title VII extraterritori-

ally.“ See American Rice, Inc. v. Arkansas Rice Grow-

ers Cooperative Ass’n, 701 F.2d 408 (5th Cir.1983)

(applying eiements similar to reasonableness test to

determine whether exercise of extraterritorial juris-

diction under Lanham Act was appropriate).

Moreover, because section 403 is a principle of in-

ternational law, a statute may not be construed to

violate the principle absent an explicit, affirmative ex-

The Supreme Court’s language in Steele suggests such a

two-pronged inquiry: “the United States is not debarred by

any rule of international law from governing the conduct of

its own citizens upon the high seas or even in foreign coun-

tries when the rights of other nations or their nationals are

not infringed.” 344 U.S. at 286, 73 S.Ct. at 255-56. Thus, if

the rights of other nations or their nationals are not in-

fringed, an act of Congress may be given the full geographic

scope that Congress intended. The reasonableness inquiry

is a means by which we can determine whether foreign rights

or interests would be infringed such that extraterritorial ap-

plication of a statute would be inappropriate.

5la

pression of congressional intent compelling that con-

struction. See McCulloch, 372 U.S. at 21-22, 83 S.Ct.

at 677-78; Rossi, 456 U.S. at 32, 102 S.Ct. at 1515-

16; Restatement § 403 comment g. Thus, a statute

will not be applied extraterritorially where it would

be unreasonable to do so, unless Congress has affirma-

tively required that it be so applied. If extraterritorial

application of Title VII would be unreasonable, the

majority’s conclusion would be correct—because Con-

gress has not affirmatively required that the statute

be applied extraterritorially.

If, however, extraterritorial application of the stat-

ute would not be unreasonable, and therefore would

not violate international law, the threshold level of

congressional intent required to overcome the pre-

sumption against extraterritoriality will be suffi-

cient to support the exercise of extraterritorial juris-

diction. As explained above, no express statement of

Congress is required to overcome the presumption.

See Foley Bros., 336 U.S. at 285, 69 S.Ct. at 577-78.

Rather, we may employ traditional methods of statu-

tory interpretation to determine whether the language

and legislative history of Title VII evidence a clear

intent that the statute be applied extraterritorially.

This analysis will insure that we accord proper

respect both to the sovereignty of other nations and

to Congress’ intent.

II. The “Jurisdictional Rule of Reason.”

The showing of congressional intent necessary to

support an exercise of extraterritorial jurisdiction

depends in the first instance on whether that exercise

of jurisdiction will violate international law. Before

examining the language and legislative history of Title

52a

VII, I will therefore consider whether extraterritorial

application of Title VII would violate the principle of

international law set forth in section 403 of the Re-

statement: [A] state may not exercise jurisdiction

to prescribe law with respect to a person or activity

having connections with another state when the exer-

eise of such jurisdiction is unreasonable.” “ Restate-

ment § 403(1). Although the majority does not ad-

dress this issue in its opinion, ARAMCO and Amicus:

Curiae assert that extraterritorial application of Title

VII would violate the “reasonableness” principle.

ARAMCO’s arguments are addressed in the discus-

sion below.

It should be noted at the outset of this discussion

that section 403 is couched in general terms; it does

1% Most courts have applied the “reasonableness” principle

to consider whether it would be appropriate to moderate their

own enforcement of a statute that has already been held to

apply extraterritorially. See, e. g., American Rice, Inc. v.

Arkansas Rice Growers Cooperative Association, 701 F.2d

408 (5th Cir. 1983) (Lanham Act); Laker Airways v. Sabena,

Belgian World Airlines, 731 F.2d 909 (D.C.Cir.1984) (Sher-

man Act). This was the approach endorsed by section 40 of

the Second Restatement, the precursor of section 403.

The Third Restatement, however, asserts that section 403

is intended to be more than a principle of comity: “reason-

ableness is understood here . . . as an essential element in

determining whether, as a matter of law, the state may exer-

cise jurisdiction to prescribe.” Restatement sec. 403 reporters’

note 10.

No court has applied the reasonableness test as part of the

threshold inquiry to determine whether a statute may, as a

general matter, be applied extraterritorially. The Restate-

ment, however, notes that the reasonableness test may serve

the same purpose as the traditional tests for deciding whether

a statute may be applied extraterritorially. Id. renerters’

note 2.

not purport to eliminate all conflicts in the exercise of

jurisdiction. See Restatement § 403 comment d (“Ex-

ercise of jurisdiction by more than one state may be

reasonable—for example, when one state exercises

jurisdiction on the basis of territory and the other on

the basis of nationality.”). Therefore, the possibility

that a conflict with foreign law may arise in some

cases does not render Congress’ initial exercise of ex-

traterritorial jurisdiction unreasonable. “Because

... can neither anticipate nor resolve all

conflicts with foreign prescriptive jurisdictions,” it

necessarily relies on the Judiciary to minimize con-

flicts of jurisdiction by exercising a jurisdictional rule

of reason in individual cases. Laker Airways, 731

F.2d at 952 n. 169 (citing Extraterritoriality and

Conflicts of Jurisdiction, U.S. Department of State

Current Policy Bulletin No. 481 at 4 (15 April

1983)). Our inquiry here is therefore whether to

apply Title VII extraterritorially, not whether it

would in all cases be reasonable.

Section 403 (2) provides:

Whether exercise of jurisdiction over a person or

activity is unreasonable is determined by evaluat-

ing all relevant factors, including, where ap-

propriate:

(a) the link of the activity to the terri-

tory of the regulating state, i. e., the extent

to which the activity takes place within the

territory, or has substantial, direct, and fore-

seeable effect upon or in the territory;

(b) the connections, such as nationality,

residence, or economic activity, between the

regulating state and the activity to be regu-

lated, or between that state and those whom

the regulation is designed to protect;

54a

(e) the character of the activity to be reg-

ulated, the importance of regulation to the

regulating state, the extent to which other

states regulate such activities, and the de-

gree to which the desirability of such regula-

tion is generally accepted ;

d) the existence of justified expectations

that might be protected or hurt by the regu-

lation;

(e) the importance of the regulation to

the international political, legal, or economic

system ;

(f) the extent to which the regulation is

consistent with the traditions of the inter-

national system ;

(g) the extent to which another state may

have an interest in regulating the activity;

and

(h) the likelihood of conflict, with regula-

tion by another state.

The arguments that extraterritorial application of

Title VII would be unreasonable fall into two cate-

gories encompassing the factors listed above: First,

since discrimination against U.S. citizens that occurs

abroad has no domestic effects, U.S. interests are not

sufficient to justify the exercise of extraterritorial

jurisdiction. Second, because labor relations are a

peculiarly domestic matter, it would be an affront to

the sovereignty of other nations to apply Title VII

extraterritorially.

The first contention mischaracterizes the purpose

of Title VII and trivalizes the special nature of civil

rights laws. The effects“ factor included in the Re-

statement is well-suited for economic regulation, but

not for individual rights o, the sort guaranteed by

55a

Title VII. It is true that the purposes of Title VII

States, 379 U.S. 241, 85 S.Ct. 348, 13 L. Ed 2d 258 (1964) :

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56a

In calling for passage of the civil rights legisla-

tion that became the Civil Rights Act of 1964, Presi-

dent Kennedy stated: “In this year of the emancipa-

tion centennial, justice requires us to insure the bless-

ings of liberty for all Americans and their posterity

—not merely for reasons of economic efficiency, world

diplomacy, and domestic tranquility—but, above all,

because it is right.” Special Message to Congress by

the President June 19, 1963 in 109 Cong. Rec. 1055,

1063 (emphasis added).

Because they create individual rights, civil rights

laws, unlike economic regulations, fall within the

category of “protection of persons.” See 2 Restate-

ment introductory note to part VII at 150-51.“ The

personal injuries cased by employment discrimination

cannot readily be characterized in terms of their

“effects” on the forum state. Civil rights are in this

respect similar to constitutional guarantees of indi-

vidual rights which control the exercise of govern-

mental authority over U.S. citizens outside the terri-

tory of the United States—without reference to the

domestic “effects” of violating the Constitution. Id.

$ 721 reporters’ note 2. While regulation of the con-

duct of private employers under Title VII is ob-

viously different from the regulation of state actors

under the Constitution,“ my point here is simply that

the rights protected by Title VII are, like constitu-

Indeed, in the same section, the Restatement notes with-

out criticism that “[s]ome United States civil rights legisla-

tion protects United States nationals outside the United

States.” Restatement § 721 reporters’ note 13 (citing Bryant,

502 F.Supp. 472 (D.N.J.1980) (applying Title VII extra-

territorially) ).

Actions by the State, even outside the territory of the

United States, must be constrained by the Constitution be-

cause the “United States is entirely a creature of the Consti-

57a

tional rights, personal. See id. comment b. It may

therefore be inappropriate to evaluate the violation

of civil rights in terms of “effects” on the regulating

state, even though the extraterritorial application of

civil rights laws may be limited by other considera-

tions not applicable to constitutional rights.

If we were to apply the “effects” standard, how-

ever, Congress and the courts have long recognized

that apart from the personal injuries of discrimina-

tion, the cumulative effects of discrimination are per-

vasive.“

Depriving U.S. citizens of a remedy for discrimi-

nation experienced while employed abroad by U.S.

companies will almost certainly have some effect in

the United States. Title VII provides employees with

tution.” Reid v. Covert, 354 .S. 1, 5-6, 77 S.Ct. 1222, 1224-

25, 1 L.Ed.2d 1148 (1956) (plurality opinion of Black, J.).

The Restatement provides that each of the enumerated

factors should be evaluated “where appropriate.” Restate-

ment § 403(2).

The same “effects” on commerce which allow Congress to

regulate the conduct of private employers under Title VII,

supra note 11, may be sufficient to establish “effects” in the

regulating state within the meaning of section 403. Cf. Tim-

berlane Lumber Co. v. Bank of America, 549 F.2d 597, 612

(9th Cir.1976) (noting that Congress’ power to regulate

foreign commerce is not subject to same restrictions as power

to regulate interstate commerce, and effects test for extra-

territorial jurisdiction must therefore be informed by no-

tions of comity and fairness’’).

Because section 403 requires us to consider other factors in

exercising extraterritorial jurisdiction, there is no reason to

discard the analysis, already accepted by the courts, that the

cumulative economic effects of discrimination are sufficient

to justify regulation. See L. Tribe, American Constitutional

Law 310 (1988) (discussing “cumulative effect” principle as

constitutional justification for civil rights legislation).

58a

an avenue to vindicate themselves in the event of an

unjust firing, a poor reference, or sudden resignation

that is in reality the result of discrimination. To-

day’s decision means that one U.S. citizen assigned

to the Saudi office of a U.S. corporation, and another

U.S. citizen working for the same company in Texas

could experience identical acts of discrimination, but

only the latter will have a remedy. This situation

creates a dilemma for minorities and women: foreign

assignments will be less attractive, while refusal of

such an assignment could limit an individual’s oppor-

tunity for advancement. As the EEOC notes, assign-

ment to a foreign office is frequently a required step

on the corporate ladder. Extraterritorial application

of Title VII may therefore be necessary to ensure that

members of protected groups have equal opportuni-

ties with respect to foreign assignments that would

affect their employment opportunities in the United

States. Extraterritorial application of Title VII

would also protect the “justified expectations” of U.S.

citizens that they will not lose all protection from

discrimination by their employers simply because they

have been assigned to a foreign office. Restatement

§ 403 (2) (d).

The territorial connections to the regulating state

are in any event buttressed by the fact that both “the

person principally responsible for the activity to be

regulated” and “those whom the regulation is de-

signed to protect” are in this case U.S. nationals—

U.S. corporations and their employees who are U.S.

citizens. Restatement & 403 (2) (b).

7 “Regulating the activities of businesses incorporated

within a state is one of the oldest and most established ex-

amples of prescriptive jurisdiction.” Laker Airways, 731

F.2d at 926.

59a

It is also incorrect to characterize Title VII’s pur-

poses as purely domestic. The legislative history of

Title VII reveals that one purpose of the statute was

to improve the image of the United States in the

international community at a time when this nation’s

failure to address discrimination—particularly racial

discrimination—had become a source of international

criticism and domestic embarassment. H.R.Rep. No.

1370, 87th Cong., 2d Sess. 2156 (1962) (report on

Equal Employment Opportunity Act—a forerunner

of H.R. 405 which was incorporated into Title VII

of H.R. 7152: H.R. 7152 became the Civil Rights Act

of 1964) (“continued employment discrimination in

the United States casts doubt upon our sincerity in

furthering the cause of individual liberty and human

dignity”); See also Special Message to Congress by

the President supra at 1055 (legislative inaction on

civil rights would result in “weakening the respect

with which the rest of the world regards us“). In

light of these concerns, the majority’s holding today

is particularly ironic: U.S. corporations will be al-

lowed to discriminate against U.S. citizens in their

foreign offices where their actions will be more im-

mediately visible to other states.

Finally, the international community has adopted

a number of conventions calling for an end to dis-

crimination—against many of the groups protected by

Title VII.“ The international consensus condemning

See, e.g., International Convention on the Elimination of

All Forms of Racial Discrimination, 660 U.N.T.S. 195, U.N.

Doc. A/6014 (1965); Convention on the Elimination of All

Forms of Discrimination Against Women, G.A. Res. 34/180,

U.N. Doc. A/34/46 (1979).

Many of these agreements have been signed by the United

States, but have not been ratified by the Senate. Most of the

60a ba

discrimination extends to discrimination in employ-

ment. Note, Equal Employment Opportunity for

Americans Abroad, 62 N. V. U. L.Rev. 1288, 1298 &

nn. 66-69 (1987) (international treaties and agree-

ments as well as the proposed Draft Code of Conduct

on Transnational Corporations prohibit discrimina-

tion in hiring, pay, and promotions). Since Title VII

expands on antidiscrimination principles that have

been the subject of international concern, there can.

be no doubt that the desirability of the regulation is

generally accepted, and that the regulation is im-

portant to the international community and consistent

with the traditions of the international system. Re-

statement § 403(2) (e), (e) & (f). ;

The United States’ interest in enforcing the civil

rights of its citizens against violations by U.S. corpo-

rations is therefore not only sufficiently strong to sup-

port the exercise of extraterritorial jurisdiction, but

also is consistent with the interests of the interna-

tional community in eradicating discrimination. Con-

gressional intent to apply Title VII extraterritorially

should therefore be defeated only if such application

would be an affront to the sovereignty of other na-

tions.

ARAMCO and Amicus Curiae argue that labor

laws are of particularly local concern, and that most

states apply their own labor laws on a territorial

basis. They therefore conclude that extraterritorial

application of Title VII would offend other nations

and produce inevitable conflicts of law—a contention

echoed in the majority opinion.

protections that the United States would owe to its citizens

under these agreements are already provided by the Consti-

tution and federal and state law. See 2 Restatement intro-

ductory note to Part VII at 150.

6la

As noted above, section 403 does not purport te

eliminate concurrent jurisdiction. There is no princi-

ple of international law which “separates jurisdiction

to prescribe into neatly adjoining compartments of

national jurisdiction.” Laker Airways, 731 F.2d at

952.

ARAMCO essentially urges that the untidiness of

concurrent jurisdiction may be avoided by applying

the reasonableness inquiry to preclude the extraterri-

torial application of a statute wherever it is possfble

that another state would exercise jurisdiction over the

same activity. This reading, however, also fails to

produce a perfectly coherent jurisdictional scheme.

Because the reasonableness constraint applies to both

the territorial and nationality bases of jurisdiction,

the extreme deference to other nations urged by

ARAMCO could create a jurisdictional vacuum. We

do not know, for example, to what extent a foreign

state would enforce its own laws to regulate the em-

ployment relationship between a U.S. corporation and

employees who are U.S. citizens, or whether it would

make its administrative and judicial procedures avail-

able to a U.S. employee seeking to bring a grievance

against a U.S. employer. A foreign state, applying the

principles of section 403 could well conclude that exer-

cise of its territorial jurisdiction would be unreason-

able in such a case. Indeed, the cases relied upon by

the majority include those in which the courts of the

United States have declined to apply the protections

of U.S. law in precisely that situation. See, c. G., Benz

„. Compania Naviera Hidalgo, 353 U.S. 138, 77 S.Ct.

699, 1 L.Ed.2d 709 (1957) (declining to apply the

Labor Management Relations Act to wage dispute be-

tween foreign employer and foreign crew although

62a

within the territorial jurisdiction of the United

States).

International discord does not arise from the exist-

ence of concurrent jurisdiction alone as much as it

arises from an attempt to regulate the conduct of

foreign nationals.“

Cases involving extraterritorial application of the

Lanham Act divide along precisely this line. Al-

though other nations have concurrent jurisdiction to.

regulate the use of trademarks in their territory,

the United States may, in the absence of an actual

conflict of law, apply the Act to the conduct of U.S.

nationals abroad. Steele, 344 U.S. 280, 73 S.Ct. 252;

American Rice, Inc. v. Arkansas Rice Growers Co-

operative Ass’n, 701 F.2d 408 (5th Cir.1983); Ra-

mirez & Feraud Chili Co. v. Las Palmas Food Co.,

146 F.Supp. 594 (S.D.Cal.1956), aff'd, 245 F.2d 874

(9th Cir.1957), cert. denied, 355 U.S. 927, 78 S.Ct.

384, 2 L.Ed.2d 357 (1958). The Act does not, how-

ever, apply extraterritorially to foreign nationals.

Vanity Fair Mills v. T. Eaton Co., 234 F.2d 633 (2d

Cir.), cert. denied, 352 U.S. 871, 77 S.Ct. 96, 1 L.Ed.

2d 76 (1956).

The cases involving extraterritorial application of

labor laws similarly demonstrate that an attempt to

regulate the conduct of foreign nationals presents the

most serious affront to the sovereignty of other na-

tions. In Foley Bros., the Supreme Court refused to

In Timberlane, the Ninth Circuit suggested that extra-

territorial application of the Sherman Act could be moder-

ated to reduce international tensions by affording greater

consideration to the nationality of the parties. The court

noted that “applying American laws to American citizens

raises fewer problems than application to foreigners.” 549

F.2d at 612.

63a

construe the Eight Hour Law to apply extraterri-

torially to a U.S. national employed by an American

contractor in Iran. 336 U.S. 281, 69 S.Ct. 575 (1949).

However, the Court emphasized that the Act did not

distinguish “between laborers who are aliens and those

who are citizens of the United States.” Jd. at 286, 69

S.Ct. at 578. The Court reasoned that if the law was

applied extraterritorially to U.S. citizens, it “would

be logically inescapable“ that the law would apply to

aliens employed abroad as well. Id. The Court was

thus most troubled by the possibility that the law

would by logical extension require an intrusion into

the realm of “labor conditions which are the primary

concern of a foreign country”—the labor conditions

of its own citizens. /d.

The Court discounted an opinion of the Attorney

General construing the Act to apply extraterritorially

on the same grounds:

The opinion ... proves too much. Although At-

torney General Moody denied that incongruous

results would flow from his interpretation, it

would be anomalous, as we have said, for an act

of Congress to regulate the hours of a citizen of

- Tran at work on a government project there.

Since the statute contains no distinction between

laborers based on citizenship, Attorney General

Stone’s reasoning that aliens are not covered

points to the conclusion that the statute does not

apply to contracts which are to be performed in

foreign countries.

Id., 336 U.S. at 289, 69 S.Ct. at 579. The Court thus

concludes that absent a distinction between aliens

and U.S. citizens employed abroad, the Act must apply

to both aliens and citizens employed abroad, or to

64a

neither. Therefore, because it would infringe upon

the sovereignty of other nations to apply the Law to

foreign nationals employed abroad, the Act could not

be construed to apply to citizens employed abroad.

Similarly, the Supreme Court in both Benz v. Com-

pania Naviera Hidalgo, 353 U.S. 138, 147, 77 S.Ct.

699, 704, 1 L.Ed.2d 709 (1956) (LMRA) and Me-

Culloch, 372 U.S. at 21, 83 S.Ct. at 677-78 (NLRA),

refused to “run interference in ... a delicate field of

international relations” by construing U.S. labor laws

to apply to foreign seamen employed on vessels regis-

tered under a foreign flag. While these cases involved

principles unique to the law of the sea, the nationality

of the parties was clearly a source of concern for the

Court.“

The alien exemption provision of Title VII, which

provides the strongest evidence of congressional intent

to apply Title VII extraterritorially, eliminates the

very factor which has barred the extraterritorial ap-

plication of U.S. labor laws.“ Because this provision

% Neither McCulloch nor Benz is cited in the Restatement’s

discussion of the presumption against extraterritoriality.

Benz, however, is cited in the section on Law of the Sea. § 512

reporters’ note 5 (jurisdiction over foreign vessels in port).

1 The majority cites several other examples of cases in

which courts have refused to apply U.S. labor laws extra-

territorially. These cases are readily distinguishable: First,

the majority cites several cases holding that the Railway

Labor Act does not apply extraterritorially. The RLA, how-

ever, incorporates a provision of the Interstate Commerce

Act which explicitly restricts its application to carriers en-

gaged in transportation within the United States. See Air

Line Stewards and Stewardesses Ass'n v. Trans World Air-

lines, 273 F.2d 69, 71 (2d Cir.1959); Airline Dispatchers

65a

insures that the statute will not intrude on the area

of labor relations which is the “primary concern” of

foreign nations, extraterritorial application of Title

VII is unlikely to offend the sovereignty of other

states. See id. Furthermore, there is no attempt in

this case to impose the requirements of Title VII on

foreign corporations employing U.S. citizens abroad—

another area likely to be of “primary concern” to

foreign states. I would conclude that “the rights of

other nations or their nationals are not infringed” by

extraterritorial application of Title VII, and there-

fore “the United States is not debarred by any rule

of international law from governing the conduct of

its own citizens . .. in foreign countries.“ Steele, 344

U.S. at 285-86, 73 S.Ct. at 255-56. This is not to

say that extraterritorial application of Title VII

would always be appropriate: it may not be, particu-

larly in the case of an actual conflict of law. The

possibility of such conflict is not, however, sufficiently

great to render extraterritorial application of Title

VII unreasonable.

In fact, Title VII contains provisions that allow

conflicts with foreign law to be minimized. For ex-

ample, this court has allowed an employer to use the

bona fide occupational qualification (BFOQ) excep-

tion, 42 U.S.C. S 2000e-2(e), to assert the require-

ments of foreign law as a defense to a Title VII claim.

Ass’n v. Nat’l Mediation Board, 189 F.2d 685, 690 (D.C.Cir.),

cert. denied, 342 U.S. 849, 72 S.Ct. 77, 96 L.Ed. 641 (1951).

Second, the majority cites cases holding that the Age Dis-

crimination in Employment Act does not apply extraterri-

torially. The ADEA, however, has been explicitly distin-

guished from Title VII because it does not contain a provision

exempting aliens employed abroad. P/eiffer v. Wm. Wrigley,

Jr. Co., 755 F.2d 554, 559 (7th Cir.1985).

66a

Kern v. Dynaelectron, 577 F.Supp. 1196 (N.D.Tex.

1983), aff'd mem., 746 F.2d 810 (5th Cir.1984) (af-

firmed on basis of reasons stated by the district

court). In Kern, the district court held that in ex-

traordinary circumstances, a prohibited classification

could itself be a BFOQ. Id. at 1201. The plaintiff

had alleged discrimination on the basis of religion

because Dynaelectron, a U.S. corporation which oper-

ated a helicopter pilot service in Saudi Arabia, em-

ployed only Moslem pilots to conduct flights from

Jeddah to the holy city of Mecca. The employer as-

serted as his defense a Saudi law prohibiting non-

Moslems from entering the holy area of Mecca.

The penalty for violation of the law was severe—

death by beheading. Id. at 1200. The court concluded

that under the circumstances, religion was a BFOQ

for the job of piloting flights from Jeddah to Mecca.

Id. at 1201.

Although the availability of the BFOQ defense in

cases of less extreme conflicts with foreign law has

not been tested, Kern indicates that the defense could

provide a basis for reconciling legitimate conflicts.“

2 J do not mean to sugest that courts should not continue

to be sparing in their application of the BFOQ defense. In

particular, courts should be wary of vague assertions of incon-

sistent legal reqirements or cultural differences “which might

afford [an employer] a pretext that [the granting of] relief

would impugn foreign law.” Steele, 344 U.S. at 280, 73 S.Ct.

at 252 (no conflict where Mexican registration of trademark

had been cancelled) ; see also Fernandez v. Wynn Oil Co., 653

F.2d 1273 (9th Cir. 1981) (alleged chauvinism of South

American businessmen should not provide basis for holding

that being male was BFOQ); Note, Equal Employment Op-

portunity for Americans Abroad, 62 N.Y.U. L.Rev. 1288,

1301-11 (1987) (criticizing use of BFOQ defense as grounds

to defeat extraterritorial application of Title VII and as ve-

hicle for avoiding conflicts of law).

67a

The argument that extraterritorial application of

Title VII is unreasonable because it would offend the

sovereignty of other nations is not persuasive. The

fact that another nation may exercise jurisdiction

over employment relations on the basis of territory

does not render the exercise of U.S. jurisdiction on

the basis of nationality unreasonable. The likelihood

that concurrent jurisdiction would produce interna-

tional discord is minimized by the fact that the

United States seeks to regulate only the conduct of

its own nationals and by the fact that Title VII may

1 with foreign law in the event of a con-

iet.

The fact that one could hypothesize particular situ-

ations in which the extraterritorial application of

Title VII to U.S. citizens employed by U.S. corpora-

tions would conflict with foreign law does not compel

a holding that Title VII may never extend its protec-

tions beyond U.S. borders. This construction of sec-

tion 403 would place an untenable restriction on

U.S. sovereignty. We would be required to defeat

congressional intent to apply a statute extraterri-

torially unless Congress was able to anticipate and

resolve every potential conflict of jurisdiction, or un-

less Congress met the McCulloch standard by express-

ing an affirmative intent to apply a statute extrater-

ritorially whether reasonable or not. This would

make extraterritorial jurisdiction an all or nothing

proposition, eliminating a middle ground on which

Congress could exercise extraterritorial jurisdiction

in a more limited fashion. This result in neither com-

pelled by the Restatement nor desirable.

For the purposes of this case, the Restatement re-

quires only that we conclude that extraterritorial ap-

plication of Title VII would in general be reasonable.

68a

Because Congress cannot anticipate every conflict of

law, it must necessarily rely on the courts to make

a more individualized determination of the propriety

of exercising extraterritorial jurisdiction in a par-

ticular case. The constraints of section 403 apply to

exercises of prescriptive jurisdiction not only by Con-

gress, but by all government entities.“ The courts

will therefore be guided in individual cases by the

same principles of reasonableness that apply to our

evaluation of Congress’ initial exercise of extraterri-

torial jurisdiction.

Thus, while I would hold that extraterritorial ap-

plication of Title VII would in general be reasonable,

I would also recognize that it may be appropriate in

some circumstances for a I. S. court to decline to

apply Title VII extraterritorially. In the instant

case, the factors that might influence a more indi-

vidualized decision whether to apply Title VII extra-

territorially have not been fully briefed and are

therefore not considered here.

III. The Language and Legislative History of

Title VII

Since extraterritorial application of Title VII

would not be unreasonable and therefore does not vio-

Jate principles of -international law, we do not need

*3 Prescriptive jurisdiction is defined as jurisdiction of a

state to make its law applicable to the activities, relations,

or status of persons, or the interests of persons in things,

whether by legislation, by executive act or order, by admin-

istrative rule or regulation, or by determination of a court.”

Restatement § 401(a). The traditional equation of jurisdic-

tion to prescribe with legislative jurisdiction was discarded

in recognition of the increasingly complex relationship be-

tween the roles of different branches of government. /d. intro-

ductory note to Part IV at 230.

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69a

to search for an affirmative expression of congres-

sional intent to apply Title VII extraterritorially.

Rather, we may employ the traditional methods of

statutory interpretation to determine whether the

presumption against extraterritoriality is overcome

by the “contrary intent” of Congress. See Foley

Bros., 336 U.S. at 285, 69 S.Ct. at 577-78; Natural

Resources Defense Council v. Nuclear Regulatory

Comm’n, 647 F.2d 1345, 1357 n. 54 (D.C.Cir.1981).

In asserting that Congress intended Title VII to

apply extraterritorially,* Boureslan and Amicus

EEOC rely primarily on the “alien exemption provi-

sion,“ 42 U.S.C. § 2000e-1, which provides in relevant

part: “This subchapter shall not apply to an em-

ployer with respect to the employment of aliens out-

side any State.” The stated purpose of this provision

was “to remove conflicts of law which might other-

wise exist between the United States and a foreign

nation in the employment of aliens outside the United

States by an American enterprise.“ “ Civil Rights:

It is not disputed that Title VII's definition of “employer”

is sufficiently expansive to support application of Title VII

beyond the territory of the United States. Employer“ is

defined as any “person engaged in an industry affecting com-

merce” who has a specified number of employees who work a

specified number of days. 42 U.S.C. § 2000e(b).

25 The majority dismisses this piece of legislative history,

arguing that we must not “substitute legislative history for

the language of the Act.“ The language of the statute is not,

however, inconsistent with the legislative history. Both the

plain language of the statute, interpreted according to the

established canons of statutory construction, and the legis-

lative history compel a single conclusion: that Congress in-

tended Title VII to apply extraterritorially.

It is instead the majority’s conclusion that Title VII does

not apply extraterritorially that requires us to ignore the

70a

Hearings on H.R. 7152 Before the House Committee

on the Judiciary, 88th Cong., Ist Sess. 2303 (1963)

(testimony of James Roosevelt, Member of Congress

from the State of California) (explaining provisions

of H.R. 405 which was incorporated into Title VII of

H.R. 7152) .“

Since Title VII expressly exempts from coverage

aliens employed abroad by U.S. corporations, the log-

ical negative inference is that Title VII was intended

to cover U.S. citizens employed abroad. Indeed, the

alien exemption provisions would be meaningless if

Title VII did not apply extraterritorially: there is no

need to exempt aliens employed abroad from coverage

if no one is covered abroad. Construction of a statute

to render a provision meaningless violates the estab-

lished rule of statutory construction which obliges a

canons of statutory construction and the clear evidence of

legislative history.

26 Contrary to the majority’s assertion, the collaborative

nature of Title VII’s legislative history requires that these

hearings be given special weight. H.R. 405 originated in the

Committee on Education and Labor, but was incorporated

by the Judiciary Committee into H.R. 7152. Title VII is thus

a hybrid of bills originating in two committees. Although

the Judiciary Committee subsequently amended H.R. 7152,

the coverage provisions of Title VII, including the alien ex-

emption provision, were not changed. Representative Roose-

velt’s explanation of the provisions of H.R. 405, based on

the conclusions of the Committee on Education and Labor, is

thus equivalent to a committee report for purposes of de-

termining the objectives of the provisions that were incor-

porated wholesale from H.R. 405. Such discussions of statu-

tory meaning are accepted as the most “persuasive indicia

of congressional intent.” Mills v. United States, 713 F.2d

1249, 1252 (7th Cir.1983), cert. denied, 464 U.S. 1069, 104

S.Ct. 974, 79 L.Ed.2d 212 (1984) ; see also Johnson v. Depart-

ment of Treasury, 700 F.2d 971, 974 (5th Cir.1983).

71a

court “to give effect, if possible, to every word Con-

gress used.” Reiter v. Sonotone Corp., 442 U.S. 330,

339, 99 S.Ct. 2326, 2331, 60 L.Ed.2d 931 (1979); ac-

cord United States v. Reeves, 152 F.2d 995, 998 (5th

Cir.1985) (“A statute should be read to avoid render-

ing its language redundant if reasonably possible.“);

Goff v. Taylor, 706 F.2d 574, 587 n. 34 (5th Cir.

1983) (It is well established that a statute should

be construed so that each of its provisions is given

full effect; interpretations which render parts of

a statute inoperative or superfluous are to be

avoided.”); Quarles v. St. Clair, 711 F.2d 691, 701

n.32 (5th Cir.1983) (same): Duke v. University of

Texas at El Paso, 663 F.2d 522, 526 (5th Cir.1981)

(same); Beisler v. Commissioner, 814 F.2d 1304,

1307 (9th Cir.1987) (“We should avoid an interpre-

tation of the statute that renders any part of it super-

flous and does not give effect to all of the words used

by Congress.“).

The majority maintains that it has not deprived

the alien exemption provision of all meaning because

another negative inference may be drawn from the

provision: * that aliens are covered by the statute

when employed within the United States. The major-

ity relies for this proposition on Espinoza v. Farah

Mfg. Co., 414 U.S. 86, 95, 94 S.Ct. 334, 339-40, 38

*The majority’s assertion that the provision still has

meaning because it means what it says—that aliens employed

abroad are not covered—is purely semantic. As stated above,

the alien exemption provision is completely superfluous if the

statute does not cover any individual employed abroad. There

is no difference between interpreting a statute to render a

provision superfluous and interpreting a statute to deprive

a provision of meaning: Semantic distinctions aside, both

violate the canons of statutory construction. See cases cited

supra.

72a

L.Ed.2d 287 (1973), in which the Supreme Court

held that Title VII applied to aliens employed in the

United States but did not prohibit an employer from

discriminating on the basis of citizenship or alienage.

That is, Title VII protected aliens from discrimina-

tion on the basis of race, religion, color, sex, or na-

tional origin, but did not make alienage itself a

prohibited classification.

The majority’s reliance on Espinoza is misplaced..

The Supreme Court does not rely solely on the nega-

tive inference it draws from the alien exemption pro-

vision, nor does it discuss the legislative history of

the provision which supports the interpretation ad-

vanced by Boureslan and the EEOC. It would there-

fore be erroneous to conclude that the Supreme

Court’s passing reference in Espinoza to the alien

exemption provision was intended to attach only one

negative inference to the proviso.

A negative inference drawn from the alien exemp-

tion provision was not necessary to bring aliens

within the scope of Title VII’s domestic protections.

As the Supreme Court notes in Espinoza, the use of

the term “individual” in defining “employee” is suffi-

cient to bring aliens within the statute’s coverage.

Id Any construction of the term “individual”—as

distinct from “citizen”—to exclude aliens would be

inconsistent with principles of equal protection.”

While the precise level of scrutiny applied to classifi-

cations based on alienage has varied, it is well estab-

* Principles of equal protection are, of course, incorporated

into the due process clause of the fifth amendment and there-

fore are applicable to acts of the federal government. Bolling

v. Sharpe, 347 U.S. 497, 74 S.Ct. 693, 98 L.Ed. 884 (1954).

* See L. Tribe, American Constitutional Law 1544-53

(1988).

73a

lished that aliens are “persons” within the meaning

of the fifth and fourteenth amendments, and are en-

titled to the equal protection of the laws of the United

States. Yick Wo v. Hopkins, 118 U.S. 356, 6 S.Ct.

1064, 30 L.Ed. 220 (1886); Truax w. Raich, 239

U.S, 33, 36 S.Ct. 7, 60

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