IBM and the EEOC

I am a bit floored by this, but I am following a charge filed in New York at the Equal Employment Opportunity Commission. It involves IBM Japan and a peculiar situation it has of eliminating the non-Japanese employees of at least one company it has taken over here. The Japanese employees are brought into the main fold; the non-Japanese (especially, non-Asian) employees are given one reason or another to be on their way.

The last I heard about this charge, which was last February, IBM Japan was claiming that they had no relationship, and therefore no “control” by, the American parent. (Hard to believe this, ne? A unit that is 100% owned, through various intermediary subsidiaries, by the American parent; and where the American parent sets global policies and directs the management. But anyway . . .)

Nothing since last February

Ironically, IBM Japan was the subject of congressional testimony in 1991 (about 20 years ago), when Congress clarified the employment civil rights act to specify that American companies operating overseas were clearly subject to the act. Even if the foreign unit was its own corporation under foreign laws, the American parent company would be held responsible. The chairman of those hearings was the late Congressman Tom Lantos of California, the only Holocaust survivor to serve in Congress.

In America, it’s fashionable to say that the big corporations run the country. And there is some truth to this, it seems. The big corporations decide when and if they’ll follow the laws. And when and if they will cooperate with investigations.

Hmmmm . . .

[Update: I know the PDF file printout in the link above is a little tiny (you have to blow up the image to a readable size), but the main piece of testimony offered in the July 1991 Congressional hearings, as reported by the San Jose Mercury News, was this:

Schmidtberger worked for another Japanese employment agency, Recruit U.S.A., which issued a memo to its recruiters stating that IBM-Japan wanted to hire 25 people under age 35, all of Asian descent. Schmidtberger sent a copy of the memo to the EEOC, which fined Recruit U.S.A. $100,000 for discriminatory employment practices.
”First, prospective employees were screened for sex, race and age,” said Schmidtberger, who quit. “Then, they were screened for qualifications.”

This was in the testimony before Congress enacted the changes in the 1991 Civil Rights Act amendments. The changes were needed because the U.S. Supreme Court had disagreed that the 1964 Civil Rights Act covered you, as an American, overseas vis-a-vis American multinationals. So Congress made it clear, using a very expansive definition of “control” as adopted to determine management control of a company in labor disputes. In 1965, the Supreme Court recognized the merit of the test in Radio Union v. Broadcast Service of Mobile, Inc., 380 U.S. 255 (1965).

The 1991 amendments employ this same, multi-part test, usually referred to as “single employer doctrine”.

This is how an American parent company can be responsible for discrimination that occurs overseas.]