August 16, 2006

Non-citizens cannot claim bias outside US: court

By Jonathan Stempel

NEW YORK (Reuters) - A federal appeals court, in a case
involving American International Group Inc., has ruled that a
key provision of U.S. civil rights law does not allow
non-citizens to recover from their employers for alleged
discriminatory conduct outside the United States.

The U.S. Second Circuit Court of Appeals on Tuesday
nevertheless said the world's largest insurer by market value
must defend against bias claims by a black Connecticut resident
covering a period when he worked in the United States.

AIG's case involved the application of a civil rights
provision commonly known as Section 1981.

John Ofori-Tenkorang, a non-citizen, had accused AIG of
discriminating against him before and after he was transferred
in 2003 to a temporary job in South Africa.

He could not sue under Title VII of the Civil Rights Act of
1964 because that law does not cover non-citizens employed
outside the country.

"The real significance will be that non-citizens working
for U.S. corporations abroad will not have civil rights
protection because they are not covered by Title VII, as
amended in 1991, and now are not covered by Section 1981," said
Charles Craver, a labor law professor at George Washington
University Law School in Washington, D.C.

Ofori, the professor said, "might raise a claim in South
Africa under South African law."

Kevin Connelly, a lawyer representing AIG, said the insurer
was pleased with the decision. Ofori's lawyer was not
immediately available for comment.

According to court papers, Ofori joined AIG in 1996 after
receiving a doctorate from the Massachusetts Institute of
Technology. By 2003, when he was transferred, he had become a
financial services vice president.

Ofori said AIG singled him out for discrimination by
cutting his 2003 bonus, and then in South Africa wrongfully
accusing him of theft, suspending him, blaming him for poor
performance, scrutinizing him more than white colleagues, and
forcing him to work in "unfavorable" conditions.


Second Circuit Judge Jose Cabranes wrote that no federal
appeals court had addressed in writing whether Section 1981
applies outside the United States, but that five district
courts had found it does not.

"We conclude ... that Congress has not extended the
coverage of Section 1981 beyond the territorial jurisdiction of
the United States," Cabranes wrote. Thus, he said, alleged
discrimination by AIG in South Africa was not covered.

Cabranes found, though, that U.S. District Judge Denise
Cote erred in dismissing some of Ofori's claims alleging bias.

The judge said a reasonable jury might conclude that the
insurer's alleged decision to subject Ofori to unfavorable
working conditions in South Africa amounted to discrimination
while he was still in the United States.

Cabranes also said it is reasonable to infer that AIG might
have discriminated in the United States as to the 2003 bonus
because Ofori was in that country for most of that year,

Howard Eglit, a labor law professor at the Illinois
Institute of Technology's Chicago-Kent College of Law, said
U.S. citizens can still invoke the protections of Title VII.

"The decision no doubt will hurt some meritorious
plaintiffs but the damage done is not fatal in most instances,"
he said.

Title VII requires people claiming bias to sue within 300
days of the alleged unlawful employment practice.

"Section 1981 is important for the relatively few claimants
who don't file Title VII claims fast enough," Eglit said.