Wednesday, March 2, 2011
Leonard on 7th Circuit Ruling That US Court Has Jurisdiction to Hear Employment Discrimination Case Involving French Lesbian Flight Attendant
Thanks to Arthur Leonard (New York Law) for letting us cross-post this blog post on this interesting case out of the 7th Circuit Court of Appeals involving issues of jurisdiction, extraterritoriality, and employment discrimination law.
Here's the post from the Leonard Link Blog (a blog you should certainly add to your blog readers):
Feeling its way through an interesting jurisdictional and procedural thicket, a panel of the U.S. Court of Appeals for the 7th Circuit ruled yesterday in Rabé v. United Air Lines, Inc., 2011 WL 677946 (Feb. 28, 2011), that U.S. District Judge Rebecca R. Pallmeyer (N.D.Ill.) erred when she dismissed on jurisdictional grounds an employment discrimination suit brought by a French national who had been employed by United Air Lines as a foreign-based flight attendant. The plaintiff, a lesbian who was discharged after reaching age 40, claimed discrimination on the basis of national origin, age, and sexual orientation, in violation of, respectively, Title VII of the Civil Rights Act of 1964 (national origin), the Age Discrimination in Employment Act (ADEA) (age), and the Illinois Human Rights Act (sexual orientation). Her suit in federal district court was premised on diversity of citizenship (which includes suits between foreign nationals and U.S. corporations), and venue premised on United's corporate headquarters being in Chicago.
United argued that the federal court lacked jurisdiction, because as a non-resident of the United States, the plaintiff was not protected from discrimination under these U.S. and state statutes.
According to the opinion for the court by Circuit Judge Hamilton, "United hired [plaintiff Laurence] Rabé in November 1993 to work in France out of the company's Paris hub. She signed an individual employment contract at United's headquarters in Chicago, Illinois. The contract specified that her work would 'be performed on board United's aircraft registered in the USA as they operate on routes throughout the Company's worldwide system,' and that the aircraft would 'constitute the establishment where' she performed her employment. The individual contract also required Rabé to join the Association of Flight Attendants, the American labor union that represents United flight attendants." The contract specifically provided that the terms of her employment would "be governed exclusively by applicable United States law, including the Railway Labor Act and the [collective bargaining] agreement," and that jurisdiction "over all employment-related claims" would be exclusively in the courts of the US and Illinois. The contract required that Rabé execute a handwritten note acknowledging her acception of the choice of law and jurisdictional provisions.
She was transferred to United's Hong Kong base in 1997, and claims that 90 percent of her flights were to or from the US. After a brief period away from United on furlough beginning in 2002, she returned subject to the same contract terms in 2005, based in Hong Kong and working flights between Asian destinations. She was fired in April 2008, after she turned 40, ostensibly for misusing travel vouchers, which charge she claimed was a pretext for discrimination. She alleged that the supervisor who initiated the investigation leading to her discharge had made anti-gay statements in her presence and insinuated his belief that she was a lesbian.
The circuit court rejected the district court's reasoning that as a non-resident Rabé was not covered by US discrimination laws and so could not sue in US courts, finding that the cited statutes would apply to this case because of the contract choice of law terms, and that there was no jurisdictional question here because jurisdiction in the case was premised on diversity, not on federal question jurisdiction. Thus, the discrimination claims were actionable in federal court because the contract between Rabé and United made them actionable as terms of the contract, not because of any application on their own as statutes.
Much of the evidence offered in litigating the dismissal motion related to the question of how often her work for United took her within the territory of the US, since United's theory of the case was that she could only claim to be covered by these statutes when she was in the US. Under the court of appeals' theory of the case, that was irrelevant.
"Under United's theory," wrote Judge Hamilton, "Rabé would not be protected by the employment discrimination laws of any country. We understand the impulse to make an explicit choice of law in a contract when the parties' international relationship could result in prolonged and expensive arguments about choice of law in the event of a dispute. That is as true for employment contracts as it is for sophisticated business-to-business contracts. But we see no reason to interpret a contractual choice-of-law provision as effectively excluding the employee from the protection of public laws and policies as fundamental as those embodied in employment discrimination laws."
The court cited for support the Restatement (Second) of Conflict of Laws § 187(3), and its prior ruling in Peters v. Gilead Sciences, Inc., 533 F.3d 594 (7th Cir. 1008), holding an employer to its promise to extend to an employee the coverage of an employment discrimination law even though a statutory exception would have excluded the employee from coverage. Said the court, "For our purposes in this case, the key point of the Peters decision is that an employer may agree by contract to extend statutory legal protections to an employee who might not be covered by the statute itself." Since subject matter jurisdiction was premised on diversity rather than federal question jurisdiction, it was irrelevant that Rabé was not "covered" as such by US laws as a non-resident employee of United, at least as far as the district court's jurisdiction to hear the case went.
The circuit court also rejected United's argument that the discrimination claims were preempted by the Railway Labor Act (the federal statute governing collective bargaining in the airlines as well as railroads), finding that her contract specifically provides that any claims would be determined by reference to federal or state law, not by reference to the collective bargaining agreement.
The bottom line: A remand to the district court "for further proceedings on the merits of Rabé's Title VII, ADEA, and Illinois Human Rights Act claims, recharacterized as claims for breach of contract and/or promissory estoppel."
Interestingly, as Art points out, the court's opinion lists Ms.Rabé as representing herself pro se, while United is represented by national employment law powerhouse Seyfarth Shaw LLP (attorney Gary S. Kaplan). Art concludes: "So the flight attendant outgunned the big national law firm - with a little help from the court, one presumes."