Gundlach v. IBM memorandum opinion (Part 3): judge orders reconsideration of Japanese law in 12(b)(6) motion.

Just when I was going to go on to other topics here, I got some heartening news this afternoon that the worry I had on page 9 of the opinion is going to be addressed.

As I had posted here the other day, the part of the case where I lost (the failure to state a plausible claim for Title VII anti-discrimination) depended on Judge Seibel relying on IBM in-house counsel Julie London’s explanation of Japanese labor law. I call it here “Julie London Law” because it isn’t in the 1947 Japanese Labor Standards Law, and it isn’t in the 2008 Labor Contract Act, which contains the safe-harbor fixed-term employment contract framework, particularly, Article 17.

Reading through the opinion using Julie London Law, what I was doing in March 2008 was memorializing nothing, because the “30 day notice provision” of the contract supposedly created fixed-term employment that could be ended any time—like “at will” employment with 30 days’ notice. This is obviously not what the real law is in Japan. For direct employment (not dispatch employment [ * – see update below]), you either have regular employment or you have term-limited employment. Regular employment carries with it the 30 days’ notice AND a “socially justifiable reason” to end an employment relationship. Fixed-term employment carries with it a solid end date, and no option to end with 30 days’ notice. (Ending a contract for economic reasons is breach of the remaining working period of the contract.)

You cannot do what IBM claims its Cognos K.K. unit did in March 2008—a fixed-term contract with a 30-day notice period. It is an invalid contract at the outset. Moreover, it is further evidence that a regular employment relationship exists.

Japanese labor law is about 180 degrees the opposite of American law, even New York law, which is considered slightly more liberal than most American jurisdictions. In Japan, you have rights in the job and to the job. A valid, written fixed-term contract is needed to limit those rights.

With IBM, this is a pattern we all have seen in the IBM v. Visentin case from last year. IBM interprets the contracts that they write overbroadly—they give the company much, much more than it is entitled to. With Visentin, the issue was whether he could leave the company and work for a competitor. With me, it is whether I “get to have” Japanese labor law when I work in Japan.

[Update 5/11/12: According to the current ruling party (DPJ), even dispatch workers, who are sent to another employer under contract, have rights under Labor Contract Law, Article 17.]