Borders are no longer a major barrier to doing business. Consequently, many American companies are establishing operations outside of the United States or creating foreign subsidiaries and sending employees to staff these operations. These arrangements raise the question of whether employees working abroad can sue these companies for discrimination under U.S. anti-discrimination laws. The answer is often yes. Whether such claims are viable depends in large part on which anti-discrimination law is at issue, the citizenship of the employee and whether the entity can be considered a U.S. employer.
The presumption against extraterritorial application is a well-established principle of American law. The presumption requires courts in the U.S. to presume — absent congressional intent to the contrary — that the laws of the United States apply only within the jurisdiction of the U.S. In Equal Employment Opportunity Commission v. Arabian American Oil, the U.S. Supreme Court in 1991 created uniformity with respect to Title VII’s extraterritorial scope. Applying the presumption against extraterritorial application, the court held that Title VII did not apply outside the United States.
