Equal Employment Opportunity Comm’n v. Arabian Am. Oil Co.
499 U.S. 244 (1991)
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Rule of Law:
Federal legislation is presumed to apply only within the territorial jurisdiction of the United States. To overcome this presumption, there must be an affirmative intention of Congress clearly expressed in the statute.
Facts:
- Petitioner Ali Boureslan, a naturalized U.S. citizen born in Lebanon, was hired by Aramco Service Company (ASC), a U.S. corporation, to work in Houston, Texas in 1979.
- In 1980, at his request, Boureslan was transferred to work in Saudi Arabia for Arabian American Oil Company (Aramco), ASC's parent company.
- Aramco is a Delaware corporation with its principal place of business in Saudi Arabia.
- While working in Saudi Arabia, Boureslan alleged that he was subjected to harassment based on his race, religion, and national origin.
- In 1984, Aramco discharged Boureslan in Saudi Arabia.
Procedural Posture:
- Ali Boureslan filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC).
- Boureslan then sued Aramco and ASC in the U.S. District Court for the Southern District of Texas for violations of Title VII.
- The defendants (Aramco and ASC) filed a motion for summary judgment, arguing the court lacked subject-matter jurisdiction.
- The District Court granted the defendants' motion and dismissed Boureslan's Title VII claim.
- Boureslan appealed to the U.S. Court of Appeals for the Fifth Circuit.
- A three-judge panel of the Fifth Circuit affirmed the District Court's dismissal.
- The Fifth Circuit then reheard the case en banc and again affirmed the dismissal.
- Both Boureslan and the EEOC petitioned the U.S. Supreme Court for a writ of certiorari, which was granted.
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Issue:
Does Title VII of the Civil Rights Act of 1964 apply extraterritorially to regulate the employment practices of United States employers who employ United States citizens abroad?
Opinions:
Majority - Chief Justice Rehnquist
No. Title VII of the Civil Rights Act of 1964 does not apply extraterritorially to protect U.S. citizens employed by U.S. employers in foreign countries. The Court reasoned that there is a long-standing canon of construction that congressional legislation is meant to apply only within the territorial jurisdiction of the United States unless a contrary intent is clearly expressed. The language in Title VII, including its definitions of 'commerce' and its 'alien exemption' clause, is ambiguous and does not contain the required affirmative statement from Congress to overcome this strong presumption. The Court found that Title VII's focus on state laws and proceedings, along with its lack of provisions for overseas enforcement mechanisms, further indicated a purely domestic focus. The Court also declined to defer to the EEOC's interpretation, finding it was not consistently held and lacked persuasive power.
Dissenting - Justice Marshall
Yes. The majority misapplied the presumption against extraterritoriality, transforming it into an overly strict 'clear statement' rule that defeats genuine inquiry into congressional intent. The dissent argued that Title VII's 'alien exemption' provision—which states the law does not apply to the employment of aliens outside any State—creates a clear negative inference that the law does apply to U.S. citizens working abroad. Without this interpretation, the exemption would be superfluous. The dissent contended that the legislative history, the statute's broad language, and the consistent interpretations of the EEOC and the Department of Justice all provide sufficient evidence that Congress intended Title VII to protect U.S. citizens employed by U.S. companies overseas.
Concurring - Justice Scalia
No. While concurring in the judgment, this opinion disagreed with the majority’s reasoning regarding the deference owed to the EEOC. Justice Scalia argued that under the Chevron framework, agency interpretations are generally entitled to deference if reasonable. However, he concluded that the EEOC's interpretation of Title VII's extraterritorial reach was not reasonable in light of the strong, well-established presumption against such application. Therefore, even assuming the EEOC was entitled to deference, its position could not be accepted because it relied on mere implications from statutory language to overcome a fundamental principle of construction requiring a clear expression of congressional intent.
Analysis:
This decision strongly reaffirmed the presumption against the extraterritorial application of federal statutes, requiring an exceptionally clear statement from Congress to apply a law overseas. The ruling created a gap in civil rights protections for Americans working abroad for U.S. companies. Its most significant impact was provoking a direct legislative response: Congress overturned this decision by passing the Civil Rights Act of 1991, which explicitly amended Title VII to state that it applies extraterritorially to protect U.S. citizens.
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