William G. Mahoney, Roy S. De Lon v. Rfe/rl, Inc.
310 U.S. App. D.C. 307, 47 F.3d 447 (1995)
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Rule of Law:
A U.S. employer operating in a foreign country is exempt from the Age Discrimination in Employment Act (ADEA) if compliance would require it to breach a legally enforceable collective bargaining agreement, as this would constitute a violation of the foreign country's "laws" under 29 U.S.C. § 623(f)(1).
Facts:
- RFE/RL, Inc., a U.S. corporation, operated its principal place of business in Munich, Germany.
- In 1982, RFE/RL entered into a collective bargaining agreement with German unions that included a provision requiring employees to retire at age 65.
- In 1984, the U.S. Congress amended the Age Discrimination in Employment Act (ADEA) to apply to U.S. citizens working for U.S. companies abroad.
- RFE/RL sought exemptions from the mandatory retirement provision for its American employees, but a German 'Works Council' denied the requests, citing the contract and principles against national origin discrimination.
- A Munich Labor Court upheld the Works Council's decision, ruling that breaching the collective bargaining agreement would be illegal under German law.
- RFE/RL's attempt to negotiate the removal of the mandatory retirement provision with the unions failed.
- Pursuant to the collective bargaining agreement, RFE/RL terminated employee William Mahoney in 1988 and employee Gilbert De Lon in 1987, both U.S. citizens, when they reached age 65.
Procedural Posture:
- William Mahoney and Gilbert De Lon sued their employer, RFE/RL, Inc., in the U.S. District Court for the District of Columbia for violating the Age Discrimination in Employment Act.
- On cross-motions for summary judgment, the district court (the trial court) ruled in favor of the plaintiffs, Mahoney and De Lon, finding RFE/RL liable under the Act.
- The district court held that the 'foreign laws' exception did not apply to obligations arising from a private collective bargaining agreement.
- The case proceeded to a trial on damages, after which a final judgment was entered against RFE/RL.
- RFE/RL, Inc. (defendant-appellant) appealed the judgment on liability and damages to the U.S. Court of Appeals for the D.C. Circuit.
- Mahoney and De Lon (plaintiffs-appellees) filed a cross-appeal regarding the amount of damages awarded.
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Issue:
Does the 'foreign laws' exception of the Age Discrimination in Employment Act, which excuses noncompliance if it would cause an employer to 'violate the laws' of a foreign country, apply when compliance would require the employer to breach a legally enforceable collective bargaining agreement?
Opinions:
Majority - Judge Randolph
Yes, the 'foreign laws' exception applies because breaching a legally enforceable collective bargaining agreement constitutes a violation of the foreign country's laws. The court reasoned that the term 'laws' in the statute is not limited to legislative acts but also includes the body of law that makes contracts legally binding and enforceable. Relying on the Supreme Court's decision in Norfolk & Western Railway v. American Train Dispatchers’ Ass’n, the court explained that a contract has no legal force apart from the law that recognizes its binding character. Therefore, if RFE/RL had ignored the mandatory retirement provision in its collective bargaining agreement to comply with the ADEA, it would have violated the German laws that enforce such contracts. The purpose of the exception is to solve the dilemma for employers caught between conflicting legal obligations in the U.S. and a foreign country, and this interpretation gives effect to that purpose.
Analysis:
This decision significantly clarifies the scope of the ADEA's 'foreign laws' exception by broadly interpreting the term 'laws' to include legally binding contracts like collective bargaining agreements. It establishes a key precedent that provides U.S. companies operating abroad with a defense against ADEA claims when a foreign labor contract mandates actions that would otherwise be discriminatory. This ruling reduces the legal jeopardy for such companies but also limits the extraterritorial protective reach of the ADEA for American workers in highly regulated and unionized foreign labor markets.
