Job-Bias Laws Limited to U.S., Justices Rule

The Supreme Court, sharply restricting the reach of civil rights laws, ruled Tuesday that Americans working for U.S. firms overseas are not protected by U.S. anti-discrimination laws.

The 6-3 decision means that the estimated 2.2 million Americans living and working abroad must rely on the laws of the nations where they work.

Meanwhile, the high court spared federal savings and loan regulators a major headache, ruling that the government cannot be sued for the negligent management of ailing thrifts.

The civil rights ruling comes at a time when thousands of American workers are expected to go to work in the Persian Gulf to help rebuild war-ravaged Kuwait. Civil rights attorneys said that the decision means many of those workers may face unfair treatment from their employers.

“This means that any individual working in Los Angeles today who is assigned to work for his or her company in the Mideast will be left unprotected from discrimination,” said Richard Seymour of the Lawyers Committee for Civil Rights Under Law. “It means that sexual harassment or racial and religious discrimination can start at the water’s edge.”

But an attorney who represented the Arabian-American Oil Co. said that Americans who go abroad must get used to foreign laws, just as aliens working here are expected to abide by American laws.

“This is a global economy where the United States cannot necessarily impose its values and policies on other countries,” said Paul L. Friedman, a Washington attorney. “Religious and cultural differences can affect how things are done abroad but we ought to be willing to live by the laws of those countries that have opened up their borders to our companies.”

Friedman noted that 55 other nations have explicit laws against workplace discrimination. Moreover, Great Britain, Canada and Australia filed a statement with the U.S. State Department opposing efforts to apply U.S. law to American firms operating within their borders.

The issue before the high court was whether Congress, in enacting the Civil Rights Act of 1964, intended to cover Americans working for U.S. firms operating outside of the United States. The law forbids employers to discriminate against employees based on their race, sex, religion or national origin.

The words of the statute do not answer the question. But in 1975, then-Assistant U.S. Atty. Antonin Scalia, now a Supreme Court justice, told a Senate panel that the law appeared to apply to U.S. firms and U.S. employees operating “anywhere in the world.” Since then, the Justice Department and the Equal Employment Opportunity Commission have followed that interpretation.

In 1979, Ali Boureslan, a Lebanese-American, was hired in Houston as a cost engineer by Aramco. A year later, he was transferred to the company’s operation in Saudi Arabia. He was fired in 1984.

He filed a suit against his employer charging that he had been harassed and discriminated against because of his race, religion and national origin. But a federal judge threw out his complaint on the grounds that the 1964 federal law did not cover employers operating abroad.

When a federal appeals court affirmed that decision, both Boureslan and the EEOC appealed to the Supreme Court.

Bush Administration attorneys urged the justices to apply the law broadly, relying in part on the earlier Scalia interpretation.

But Chief Justice William H. Rehnquist, writing for the majority in the case (EEOC vs. Aramco, 89-1838), said that there was no clear evidence Congress intended to apply the U.S. law outside the country. He was joined by Justices Byron R. White, Sandra Day O’Connor, Anthony M. Kennedy and David H. Souter. In a brief separate statement, Scalia concurred without explaining the divergence from his earlier opinion.

Congress, of course, remains free to amend the law, and Sen. Edward M. Kennedy (D-Mass.) suggested doing just that Tuesday. Calling the court’s decision “a distorted reading” of the law, Kennedy said that Congress should “fill this significant loophole” when it votes on the pending civil rights bill.

In the savings and loan ruling, the high court said that federal regulators are immune from lawsuits alleging negligence in their management of seized thrifts.

Since 1987, federal regulators have taken over more than 550 troubled thrift institutions and managed them until new owners could be found.

However, many of the ousted owners, such as Charles H. Keating Jr. of the defunct Lincoln Savings & Loan, have contended that government mismanagement caused their thrifts to go broke. Currently, 132 damage claims are pending against the federal government because of alleged mismanagement of S&Ls.;

Two years ago, a federal appeals court in New Orleans ruled that the government could be forced to pay damages if it took over a savings institution and managed it negligently. Fearing a deluge of damages claims, the Justice Department appealed.

In Tuesday’s unanimous decision (U.S. vs. Gaubert, 89-1793), the high court reversed that decision and ruled that government regulators are off-limits to damage suits for their management of savings institutions.