Reply brief filed by IBM USA / IBM Japan. It’s really just more of the same.

A post for those of you who are following me on the issue. I mentioned a while back that the due date for IBM was today (January 13), and a reply for each party was filed in U.S. District Court for the Southern District of New York. No new developments, but I’ll discuss the pieces that I am able to talk about with you, and my initial sense, in a short while.

I gather that there are some Americans on the Japan-side of this blog readership who are keen this story. But I need to do some more review before I lay it out.

[Update: What’s strange about the reply briefs is that it seems IBM’s attorney wants to argue new law.

For example, the IBM USA one says “Title VII and the ADEA generally do not apply extraterriorially.” But this says nothing. Of course, most Congressional acts apply within the United States. As I’ve told you, in 1991, Congress clarified that Title VII (and the ADEA) apply for actions outside the United States, by a party that is “controlled” by an American person or corporation.

The key is this thing called “Single Employer Rule”. Since Arbaugh v. Y&H Holdings, it’s clear that federal courts always have jurisdiction over Title VII claims, and that something like whether an employer meets the Single Employer Rule is a matter for the jury. It looks like Paul Hastings (the law firm) is taking the case Cook v. Arrowsmith Shelburne to suggest that IBM USA cannot plausibly “control” IBM Japan. But that’s conclusory.

Whether a company is a Single Employer is for a jury to decide.

Second, read the Tangoods example from the EEOC. Anything about having to be employed by the American parent or have the hiring and firing decision there?

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.(8)

The things that IBM USA says make it NOT the Single Employer are the very things that the EEOC said were irrelevant to whether a company is a Single Employer.

There are more items in the reply about Iqbal plausibility and forum non conveniens. (How can a forum be inconvenient to an American company when the headquarters is actually in that district? And yet, say that some foreign country, that doesn’t have jurisdiction over the headquarters, is the convenient forum?)]

[Update #2: The IBM Japan brief isn’t much better. It also threads back to the uncaptioned 12(b)(6) argument Paul Hastings had made, but confuses Japanese Labor Law. It also confuses the Cognos employment with the IBM Japan contract that was meant to disregard/destroy the regular employment (sei sha-in) relationship with Cognos. I’m not so sure what purpose oral argument serves here, because the pleaded facts are taken as true for purposes of 12(b)(6). If they want to challenge the facts in the complaint, the proper response was ANSWER, not OBJECT . . . ]