Employment discrimination in Japan, one of the many roadblocks to a career here

This is an issue that impresses me because it’s so rarely discussed back in America.

It’s no secret that once an expat decides to try and make a career in Japan, one stumbling block after another is thrown in the way. That is, unless you are someone who was expressly sent to Japan by powers back home.

Otherwise, most times it’s open season on YOU.

The surprising thing, though, is when this happens with American companies who are doing business in Japan. Maybe no surprise when purely Japanese companies do it. Yes, there’s Article 3 of the Labor Standards Act, that allegedly prohibits discrimination. But everyone knows it’s a dead letter because apparently it’s never been enforced. It’s just pretty words that some long ago Japanese government threw in there, to make it look like Japan has some sense of fair play.

When an American company lets its Japanese subsidiary engage in these same games, though, it’s far worse.

In the early 1990’s, Congress held hearings into discrimination by Japanese affiliates of American companies, and Japanese companies doing business stateside. The hearings were chaired by the late Congressman Tom Lantos, the only Holocaust survivor to serve in Congress, at least at the time.

The testimony that Congressman Lantos elicited was one of the factors behind the 1991 amendments to the Civil Rights Act.

The 1991 amendments clarified, that the civil rights protections in employment that were enshrined in the famous ’64 Civil Rights Act applied, for Americans, to foreign affiliates of American corporations. This had not been expressly written in the original act, but had been understood for many years. However, the nutty Supreme Court ruled opposite to that once or twice in the late ’80’s. So the Lantos commission and the Congressional amendments fixed things.

Or so it seemed.

In 1993, the first Clinton Administration issued regulations that explained how the U.S. civil rights protections would carry overseas to Americans employed by foreign affiliates of U.S. companies. You can read some of them here.

There could obviously be a question, what is an affiliate of an American corporation? It isn’t always the case that U.S. companies set up a 100%-owned foreign affiliate. In some cases, the American involvement is part of a joint venture, where there are other, multinational partners as part of the business. In other cases, we aren’t dealing with corporations at all, but partnerships or sole proprietors.

So Congress included in the amendments a definiton of “control”, which was taken word-for-word from union labor law. For years, there had been a standard in union negotiations to determine whether one company was in effect the controlling organization of an affiliate. It’s clear in cases of 100% ownership that the parent company ultimately controls what a foreign affiliate does, because it controls the management. But other situations aren’t as clear.

Here is one example from the 1993 regulations:

Example: Charging Party (CP), an American citizen who is hearing impaired, alleges that he was discriminatorily terminated from his job in the country of Tangeria by Tangoods, a 200-person firm incorporated in Tangeria with offices only in that country. Tangoods was created by a 2000-employee American company, Amerigoods, to supervise international marketing of Amerigoods’ products. Amerigoods owns 25% of the stock of Tangoods. Some of the members of Tangoods’ board of directors are officers and/or board members of Amerigoods, but the two companies have distinct corporate forms, have entirely separate staffs, and perform all management and operational functions, e.g., payroll, hiring, and firing, independently. Amerigoods sets corporate policies, applicable to Tangoods, on such matters as acceptable employee behavior, employee sales quotas, amounts of annual and sick leave, salary scales, severance pay, and pension accrual and payout. Amerigoods representatives inspect the Tangoods facilities on numerous regularly scheduled visits each year, and dictate changes in marketing and sales strategy as necessary for continued sales of Amerigoods’ products.

Because it is incorporated and does business exclusively outside the United States, Tangoods is not itself an American employer. It may, however, be controlled by an American employer. Amerigoods is a partial owner of Tangoods. In addition, there is substantial interrelationship of operations between the two companies; Tangoods exists and performs services principally for the benefit of Amerigoods, and Amerigoods representatives monitor and modify Tangoods’ operations to maintain sales. Although personnel operations are handled separately and there does not appear to be much overlap in managerial personnel, Amerigoods does set uniform corporate policies on some matters related to labor relations. There is also some overlap in board membership between the two companies. Under such circumstances, the Commission would consider Tangoods to be “controlled” by Amerigoods, and would assert jurisdiction over CP’s charge challenging his termination.

You can imagine that any complaints that do make it to the U.S. Equal Employment Opportunity Commission (EEOC) from overseas get hung up on this issue of “control”. With the foreign affiliate ALWAYS claimed to be, by the American parent, outside the control of the parent.

The EEOC has its regulations, linked above, which are supposed to be followed when someone lodges an administrative charge. But what happens is that some plaintiffs get a little tired waiting for the EEOC to investigate. The EEOC gets about six months from the time a charge is initially filed to investigate. After that point, if the EEOC has not come to a decision, the charging party (CP) can file a suit in federal court. This is usually a big mistake.

Especially with overseas filings.

There is one, maybe two, stupid, unpublished federal cases out there where the plaintiff’s attorney never bothered to develop the issue of control in the pleadings. Because the cases were unpublished, it means they have no precedential value. But lawyers can still pick them up on Lexis or Westlaw.

So what has developed is a very sophisticated body of argumentation (not law!) as to why a given foreign subsidiary of an American parent is not a controlled company. And so the parent company should not be held liable under the Civil Rights Act.

Now, with Japanese subsidiaries this “control” argument is particularly silly. It will go something like this: “Japan is its own distinct culture and so therefore whatever our subsidiary does there is really beyond our control. Because we’re doing business there, we are trying to fit into the culture.”

The federal regulations expressly prohibit this kind of excuse in consideration of the matter. After all, it’s an anti-discrimination statute! So what good is it, if American multinational businesses can turn around and say, well, discrimination is part of the culture there, so we let it go since it’s good for business?!

But the other problem here is this deceptive practice the Japanese employ about signing things. Here, they always want you to sign something. But no one tells you that signatures on contracts here are interpreted differently than back home.

If you make a deal and sign a contract back home, the other party can’t turn around later and change the contract without putting up something new. Also, they can’t threaten breach to get you to sign a new contract. “Threat of breach is no consideration.”—that’s the general rule. Of course, there are exceptions.

But here, the threat of breach to get you to sign something is par for the course. It’s just another day, no matter how dirty and contemptible the practice is. (After all, look what’s going on with the Okinawa base agreement. Ehem . . . )

So what can happen is that someone will leave their American civil rights protections at the firing table as they “agree” to a money settlement as they are being pushed out the door.

This apparently happened to Anthony Rajoppe in a case that made its way to federal court in the Eastern District of Pennsylvania, about two or three years ago. It is unpublished (meaning, almost always, no precedential value). But I like the fact pattern.

Rajoppe worked for the Japan affiliate of a GMAC finance company. He was there from September 2002 to very early in 2004 (about one year—which seems to be the “time limit” foreigners who are hired for jobs here get). Sometime later, Rajoppe discovered that he was covered under U.S. civil rights laws through the EEOC. A person who is discriminated against has to bring a “charge” first with the EEOC before he/she can go to federal court—that’s a key point! And there are time limits to when you can get this charge in—usually just 180 days. 330 days in states that have state-law discrimination statutes that would cover the same area of civil rights protection.

Apparently, Rajoppe signed some kind of settlement in January 2004 as he was being kicked out. (“Sign or be fired”, something like that.) And to the EEOC, this was an excuse not to investigate his charge. So sometime after, Rajoppe ended up in federal court, where it looks like he had some small “success” in that he didn’t get booted out on the initial motions. It’s not clear what happened in the case after that.

Don’t sign things here! You know? They are 90% of the time filled with tricks, and then you have to argue against your own signature. The people who do this here, they have no honor.

I’ve read this Rajoppe case maybe three or four times since I found it. I am always impressed by the Fact portion of the opinion, because I know so many people who faced this while working here.

The plaintiff claims that, while serving as GMACCM Japan’s Head of Technology, he received many complaints from his
non-Japanese staff about racist attitudes at the corporation.

The plaintiff also alleges that when he attempted to use
disciplinary action against a Japanese staff member, Tajima
responded by promoting the staff member to a manager position in the plaintiff’s department.

On January 15, 2004, the plaintiff was summoned to an
unscheduled morning meeting. [NOTE: Always the surprise meeting! Surprised it wasn’t December 7, 2003!] At the meeting, Tajima allegedly informed the plaintiff that he could either accept a settlement or be fired. The plaintiff eventually accepted the settlement and resigned.

Shortly after the plaintiff was removed, Tajima
allegedly removed all other non-Japanese managers at GMACCM Japan in an effort to promote company harmony. The plaintiff claims that most non-Japanese staff were also pressured into leaving. [note added]

Ah, yes, now “we must purify the company and bring it harmony by getting rid of the non-Japanese–except if they’re from a part of Asia we consider inferior to us!” In which case, they still won’t be taken seriously.

When you hear the stories, and actually read the accounts that make their way into a federal case, you might be amazed that the people stateside haven’t lowered the boom on this kind of behavior. Especially since Congress spoke almost 20 years ago.

It would be good if the government back home just started collecting evidence of these incidents and letting the big corporations know that the Obama Administration is on the case.