Extraterritorial application of two major US anti-discrimination statutes

Just a year after the ADA’s enaction, the US Supreme Court held in EEOC v. Arabian American Oil Co. and Boureslan v. Arabian American Oil Co. that Title VII did not apply extraterritorially. That is, there was no protection for US citizens working outside the United States. 

Perhaps noticing the significant implications of the Court’s ruling, Congress swiftly amended Title VII and the ADA by enacting Section 109 of the Civil Rights Act of 1991. Specifically, Section 109 expanded Title VII and the ADA’s protections to United States citizens employed in foreign countries by an American employer or a foreign entity controlled by an American employer.

The most important factor practitioners should consider in determining the “nationality” of the entity accused of discrimination (for purposes of Title VII or the ADA) is the employer’s place of incorporation. It is less likely that Title VII or the ADA will apply if the employer is incorporated outside of the United States. However, this factor alone is insufficient. Practitioners should also consider the location of an employer’s offices and facilities, the nationality of the employer’s owners and officers, and the location of the employer’s management. 

Assuming the factors listed above weigh in favour of finding that the employer is not a US employer, Title VII and the ADA’s protections may still apply if the entity is “controlled” by a US employer. At this point, practitioners should analyse the relationship between the US employer and the foreign entity by considering the following factors: (1) the interrelation of operations; (2) the commonality of management; (3) how “centralised” the control of labour relations is; and (4) the commonality of ownership or financial control. 

Section 109 does, however, provide a defence to a foreign employer subject to Title VII and the ADA. If the employer’s compliance with either statute would cause the employer to violate a law of the country in which the employee works, then neither Title VII nor the ADA apply. 

In conclusion, the extraterritorial application of Title VII and the ADA provides essential protections for Americans working abroad, but requires careful analysis of employer status and foreign law compliance. Understanding these complexities is crucial in today's global workplace.

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Raul is an associate attorney at the law firm of McDonald Sanders, P.C., in Fort Worth, Texas and primarily focuses on civil litigation, employment, and education. Raul earned his law degree from Texas Tech University in 2021, and his bachelor's degree from Texas Christian University in 2018.