When in Riyadh, should Americans do as the Saudis do or as Americans do at home? That's more just than a protocol question. The Supreme Court will decide this term whether U. S. corporations have to follow American laws against job discrimination in their operations abroad.
In an increasingly global economy, both business and workers have a lot at stake in the outcome of the case, which will be argued before the high court on Jan. 16. About 2,000 U. S. companies operate 21,000 foreign units in 121 countries. Business worries that it could get caught in the crossfire between conflicting local laws and imported U. S. statutes, while civil rights groups insist that American workers for American companies should be free from bias wherever they're employed, despite local custom.
CRUEL TAUNTS. Multinationals seem to have the upper hand in the case now before the Supreme Court. A federal judge in Houston tossed out the suit brought by Ali Boureslan, a U. S. engineer of Lebanese Moslem descent, who charged that Arabian American Oil Co. discriminated against him. A year after joining Aramco in Houston in 1979, Boureslan, a naturalized citizen, won a prized transfer to Saudi Arabia. Once there, claims Boureslan, his supervisor taunted him mercilessly about his national origin and religion. In 1984, he was fired from his $85,000-a-year job. He returned to the U. S. and filed a bias suit. "As an American society, we are not free of this disease," says Boureslan, 44, who now runs an insurance company in El Paso.
A federal appeals court upheld the lower-court ruling, agreeing that Congress didn't intend to apply the antibias law outside the country. "It is a chauvinistic and imperialistic view that U. S. law is always better," says Paul L. Friedman, a lawyer for Aramco.
But now, Boureslan has gained the backing of the federal Equal Employment Opportunity Commission, which joined the suit against the oil company after the appeals court decision. The EEOC and civil rights groups contend that an Aramco victory would pave the way for employers to hold back the advancement of, say, female employees in countries such as Japan. And in a company where an overseas assignment may be key to promotions, employees may face a grim choice: taking a post abroad where they could face bias or harming their careers. "These types of rules and customs overseas can be a barrier to various groups breaking into top jobs," says Charles S. Ralston, a lawyer with the NAACP Legal Defense & Education Fund.
RAMADAN RELIEF. But if Boureslan and the EEOC prevail, companies with overseas operations say they would face huge practical problems. They envision numerous conflicts that might arise between U. S. and local laws. And they note that since foreigners working for foreign-owned companies in the U. S. must follow American antibias laws, it's only fair that their laws apply in their countries. "Labor law is a function of culture, and cultures are different in countries where Americans do business," says M. Louis Camardo, a personnel manager at Ford Motor Co. Managers are especially concerned about legal conflicts in countries such as Saudi Arabia, which bars women from many jobs and allows Moslems to work fewer hours at full pay during the monthlong religious holiday of Ramadan.
Many countries require that companies give hiring and promotion preference to nationals of the host country. Indeed, when Aramco began to transfer its assets to the Saudi government, many Americans were laid off, while Saudi jobs were protected. The affected Americans have now sued Aramco under the same law Boureslan used, claiming discrimination on the basis of national origin and religion. Their attorney, Michael M. Mulder, says their case is on hold until the Supreme Court rules in the Boureslan case.
The case will be won or lost on a narrow legal point: When Congress passed the Civil Rights Act of 1964, did it want the statute to apply outside the U. S.? But even if the court rules that lawmakers had no such intention, that might not be the end of the issue. California Democrat Don Edwards, chairman of a key House judiciary subcommittee, says he plans to introduce legislation that would make it clear that antidiscrimination laws apply wherever U. S. companies operate.
That prospect is already creating a stir. Britain, Canada, and Australia have reminded the State Dept. that international law recognizes the rights of nations to regulate conduct within their own borders. If the high court extends American antibias laws outside the U. S., it could resolve one dispute only to unleash a much larger one.