Article

Are foreign companies doing business in the United States required to comply with American employment discrimination laws?

In June 1982 the United States Supreme Court decided that a New York incorporated subsidiary of a Japanese company could not invoke the terms of a 1953 U.S.-Japan Treaty, to defend an action filed against it by female employees who alleged discrimination on the basis of sex and national origin in violation of Title VII of the Civil Rights Act of 1964. The decision is an important one because it not only affects the over 1.6 million workers in the U.S. who are employed by U.S. affiliates of foreign corporations, it may also affect future foreign investment in the United States generally. Foreign investment has grown rapidly in the United States in recent years.I n 1981 foreign direct investment in the U. S. increased 58% from that of 1980, with a total of $19.29 billion spent to acquire or establish business in America.1 Those investments were found in manufacturing, mining, wholesale and retail trades, finance, banking, insurance, real estate, oil and gas extraction, and chemical and allied products. The major foreign investors in 1980 were from Canada, France, Japan, the Netherlands, Switzerland, United Kingdom, and West Germany. The decision in this case is important because approximately 47 nations have entered into Friendship, Commerce and Navigation Treaties (hereinafter referred to as "FCN treaties") with the United States which contain language similar to that of the Japanese Treaty.2 This article will review the facts and issues raised by recent cases which have interpreted the Japanese Treaty in light of Title VII, discuss unresolved issues and raise questions to consider.

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