Equal Employment Opportunity Commission v. Arabian American Oil Co.

1991-03-26

Headline: Court upholds domestic limit on workplace discrimination law, ruling Title VII does not reach U.S. employers’ treatment of American workers abroad and narrowing federal remedies for employees overseas.

Holding: The Court affirmed that Title VII does not apply to U.S. employers’ employment decisions affecting U.S. citizens working abroad, so federal workplace discrimination protections do not extend to those overseas situations.

Real World Impact:

Limits federal Title VII claims by U.S. citizens employed overseas.
Affirms lower courts’ dismissals of overseas Title VII suits.
Leaves it to Congress to extend Title VII coverage abroad by statute.

Topics: employment discrimination, Title VII, workers abroad, EEOC enforcement

Summary

Background

A naturalized U.S. citizen who had been hired in Houston and later transferred to work in Saudi Arabia said he was harassed and fired because of his race, religion, and national origin. He filed a discrimination charge with the EEOC and sued two related companies — a U.S. subsidiary and its parent that operated in Saudi Arabia. Lower federal courts dismissed his federal Title VII claim, and those dismissals were appealed to the Supreme Court to decide whether Title VII reaches employment actions by U.S. employers against U.S. citizens overseas.

Reasoning

The Court focused on a long-standing legal rule that statutes normally apply only inside the United States unless Congress clearly says otherwise. The Justices found Title VII’s jurisdictional language ambiguous and concluded Congress had not clearly intended the law to cover employment purely abroad. The majority also rejected the idea that the statute’s exemption for aliens working outside any State proves Title VII covers U.S. citizens abroad. The Court gave limited weight to the EEOC’s later view that the law applied overseas and noted Congress had not provided enforcement tools for foreign situations.

Real world impact

The ruling means federal Title VII claims generally are not available to U.S. citizens working for American employers when the alleged discrimination occurs entirely outside the United States. Affected workers may need to rely on local law, state courts, or seek a change by Congress. The Court emphasized that Congress can amend Title VII if it wants coverage abroad.

Dissents or concurrances

A dissent argued the statute’s language and history do show Congress intended to protect U.S. citizens overseas; a concurrence noted the Court should still give some deference to reasonable agency views.