Enforcing the Employment Rights of American Workers Abroad

By David A. Lowe

If American citizens are employed by a U.S. owned or controlled company, they continue to be covered by U.S. antidiscrimination laws while working overseas, and they may also be protected by the national law of the host country, by international law, and by labor agreements or voluntary codes of corporate conduct. Law practitioners should be aware of the interrelationship of foreign laws; complex jurisdictional, discovery, and other procedural issues raised by cross-border employment litigation; and other sources of legal rights and responsibilities, such as trade agreements and international legal conventions in the global workplace.

Extraterritorial application of U.S. law. Three major U.S. antidiscrimination laws expressly protect American employees working overseas if they are employed by U.S. companies or foreign entities controlled by a U.S. corpo-ration: Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act.

Congress provided a "foreign laws" exception where an otherwise discriminatory action is excused to avoid vio-lating the laws of a foreign country in which the workplace is located. Remedial statutes such as the ADEA are regu-larly entitled to a broad and liberal construction so as to effectuate the remedy. Thus, the "foreign laws" exception is, in general, narrowly construed and requires the employer to prove that complying with the U.S. antidiscrimina-tion laws will inevitably violate the national law of the host country.

Congress also specifically limited application of U.S. antidiscrimination law to cover only foreign entities that are U.S. controlled. Whether a foreign entity is "controlled" by a U.S. corporation depends on whether the two entities share interrelationship of operations, common management, centralized control of labor relations, and common ownership and financial control.

Application of local foreign law to U.S. citizens working overseas. Americans working abroad are likely to be protected by the employment laws of the country where they work and the laws of the country where the employer is based. One issue that may arise is whether the U.S. citizen is in actual fact "working" in the foreign country or is there only for a temporary assignment. For example, an American assigned to an overseas office for a short project or who is present in a foreign country solely to attend a conference or trade show is unlikely to be protected by the antidiscrimination laws of that country. The issue is determined by the national law of the host country. European Union (EU) member states are in the process of implementing the Racial Equality Directive and the Employment Equality Directive to establish a general framework for equal treatment in employment and occupation. These pro-tections generally address both direct discrimination (disparate treatment) and indirect discrimination (similar to disparate impact analysis in the United States).

The antidiscrimination legislation adopted by EU member states may provide less protection than U.S. law. For example, France has implemented legislation outlawing so-called quid pro quo sexual harassment but has been resis-tant to recognizing a claim for hostile-environment sexual harassment. To implement the EU directives, France has instead looked to broader antiharassment legislation (i.e., harassment legislation not limited to sexual harassment).

Remedies under foreign laws may be more limited than under U.S. law. For instance, the burden of proof may be different under foreign law. American practitioners familiar with the three-step McDonnell Douglas burden-shifting framework for discrimination claims (see McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802–05 (1973)) may be surprised to learn that in most European jurisdictions there is no third step to permit the employee to prove pre-text after the burden has shifted to the employer to prove a legitimate business justification for the challenged ac-tions.

Notably, there is no bar to an employee pursuing claims in both a foreign tribunal and U.S. courts, although such claims may be subject to motions for injunctions or transfer owing to forum non conveniens.

International trade agreements, preference programs, and financing conditions. U.S. trade preference pro-grams and trade agreements generally condition access to the U.S. market on a host country’s compliance with "in-ternationally recognized worker rights," including the right to organize and to bargain collectively, freedom of asso-ciation, minimum wages and hours of work, and prohibitions on forced labor and child labor. However, a private company’s violation of these principles is actionable only if the host government fails to enforce these standards. In other words, the standards apply to governments, not directly to private actors. However, private companies may be required to meet minimum labor and employment standards as a condition of obtaining financing for overseas pro-jects. The U.S. Overseas Private Investment Corporation conditions financing for overseas projects on an em-ployer’s adherence to the same "internationally recognized worker rights" described above. The World Bank’s In-ternational Finance Corporation went further, adopting standards that require projects in which it invests to "base the employment relationship on the principle of equal opportunity and fair treatment." Americans working overseas on projects receiving funding from one of these sources can insist that the employer comply with these minimum stan-dards; if the employer refuses, it risks losing the funding.

European and international human rights law. Increasingly, employment rights and the right to be free from discrimination in employment are recognized internationally as basic human rights. Where violation of employment rights is so egregious that it rises to the level of human rights abuses, claims can be brought in the International Criminal Court.

The European Court of Human Rights is also empowered to hear employment-related civil rights claims. It has jurisdiction over violations of the European Union Constitution, which incorporates the Charter of Fundamental Rights. The charter prohibits slavery and forced labor, as well as employment discrimination on the basis of race, gender, national origin, disability, religion, sexual orientation, language, political opinions, and genetic features. It is not clear whether non-EU citizens have standing to bring an employment claim before the court.

The United Nations has also established conventions prohibiting forced labor and other human rights abuses, and the International Labour Organization has adopted 188 conventions relating to international labor standards. However, the conventions are not binding unless ratified by member countries.

Labor agreements and corporate codes of conduct. Employment rights may also be protected through voluntary agreement. Historically, the principal source of employment protection for workers outside the U.S. has been legally binding labor agreements, and many countries still require an employer to have such an agreement, enforceable under local law, before an employer is allowed to do business in that country. In addition, multinational employers have been pressured to adopt corporate codes of conduct that guarantee a safe and healthy workplace, freedom from discrimination, minimum wages, reasonable limitations on work hours, the right to engage in collective bargaining, and prohibition on child labor or forced labor.

Examples of corporate codes of conduct include the U.S. Model Business Principles announced by the Clinton Administration and the U.S. Department of Commerce in 1996, the Universal Business Principles issued by the American Chamber of Commerce in Hong Kong, the Organisation for Economic Co- operation and Development’s Guidelines for Multinational Corporations, and the Global Sullivan Principles of Social Responsibility, which were developed by noted human rights activist Leon Sullivan.

Employers who meet minimum standards in nine areas, including employee health and safety, nondiscrimination, collective bargaining rights, and prohibition of forced labor and child labor, can be certified by Social Accountability International as meeting its Social Accountability 8000 standard.

- This article is an abridged and edited version of one that originally appeared on page 213 of The Labor Lawyer, Fall 2008 (24:2).
- For more information or to obtain a copy of the periodical in which the full article appears, please call the ABA Service Center at 800/285-2221 or go to
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- Periodicals: The Labor Lawyer, journal, published three times per year; Labor and Employment Law, newsletter, published quarterly; substantive committee newsletters, published biannually.
- Books and Other Recent Publications: The Developing Labor Law: The Board, the Courts, and the National Labor Relations Act, 5th ed., with 2008 Cum. Supp.; Employment Discrimination Law, 4th ed.; The Fair Labor Standards Act, with 2007 Cum. Supp.; The Family and Medical Leave Act, with 2008 Cum. Supp.; Wage and Hour Laws: A State-by-State Survey, with 2007 Cum. Supp.; Age Discrimination in Employment Law, 2007 Supp.; Covenants Not to Compete: A State-by-State Survey, 5th ed., with 2007 Supp.; Employee Benefits Law, 2d ed., with 2008 Cum. Supp.; Equal Employment Law Update, Summer 2007 ed.; Employee Duty of Loyalty, 3d ed., with 2008 Cum. Supp.; How Arbitration Works, 6th ed., with 2008 Cum. Supp.

David A. Lowe is a partner with the San Francisco, California, law firm of Rudy, Exelrod, Zieff & Lowe, LLP. He may be reached at

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