Appeal from the United States District Court for the District of Columbia (91cv01842)
Before: Silberman, Henderson, and Randolph, Circuit Judges.
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Opinion for the court filed by Circuit Judge Randolph.
If an American corporation operating in a foreign country would have to "violate the laws" of that country in order to comply with the Age Discrimination in Employment Act, 29 U.S.C. Section(s) 623(f)(1), the company need not comply with the Act. The question here is whether this "foreign laws" exception in Section(s) 623(f)(1) applies when the overseas company, in order to comply with the Act, would have to breach a collective bargaining agreement with foreign unions.
RFE/RL, Inc. is a Delaware non-profit corporation. It is funded but not controlled by the federal government, Ralis v. RFE/RL, Inc., 770 F.2d 1121, 1125 (D.C. Cir. 1985), and is best known for its broadcast services, Radio Free Europe and Radio Liberty. RFE/RL's principal place of business is Munich, Germany. In 1982, the company entered into a collective bargaining agreement with unions representing its employees in Munich. One of the provisions of the labor contract, modeled after a nation-wide agreement in the German broadcast industry, required employees to retire at age sixty-five. *fn1 In 1982, the Age Discrimination in Employment Act had no extraterritorial reach and, from all that appears, this portion of the RFE/RL collective bargaining agreement was entirely lawful. See Ralis v. RFE/RL, Inc., 770 F.2d at 1124.
Congress amended the Act in 1984 to cover American citizens working for American corporations overseas. Pub. L. No. 98-459, 98 Stat. 1767, 1792-93 (codified as amended at 29 U.S.C. Section(s) 623(h), 630(f)). RFE/RL initially thought its American employees in Munich would therefore no longer have to retire at the age of sixty-five, as the collective bargaining agreement provided, and could continue to work until they were seventy if they so chose. *fn2 In order to implement this understanding, the company applied to the "Works Council" for limited exemptions from its contractual obligation. Works Councils (Betriebsrte) exist in all German firms with twenty or more workers. See Christopher S. Allen, Principles of the Economic System, in Germany and Its Basic Law: Past, Present and Future; A German-American Symposium 339, 348 (Paul Kirchhof & Donald P. Kommers eds., 1993). They are bodies elected by both unionized and nonunionized employees. Their duties include insuring that management adheres to all provisions of union contracts. Departures from contractual requirements are illegal without the Works Council's approval. Rejecting RFE/RL's requests, the Works Council here determined that allowing only those employees who were American citizens to work past the age of sixty-five would violate not only the mandatory retirement provision, but also the collective bargaining agreement's provision forbidding discrimination on the basis of nationality.
RFE/RL appealed the Works Council's decisions with respect to several employees, including plaintiff De Lon, to the Munich Labor Court and lost. The Labor Court agreed with the Works Council that RFE/RL must uniformly enforce the mandatory retirement provisions because exemptions would unfairly discriminate against German workers. The Labor Court also held that the company's retaining employees over the age of sixty-five despite the collective bargaining agreement would be illegal. RFE/RL negotiated with the unions to delete the mandatory retirement provision from the collective bargaining agreement, but to no avail. The company terminated plaintiff De Lon in 1987, and plaintiff Mahoney in 1988. Both plaintiffs were working for the company in Munich, both are United States citizens, and both were discharged pursuant to the labor contract because they had reached the age of sixty-five. The parties agree that RFE/RL thereby violated the Age Discrimination in Employment Act unless the "foreign laws" exception applied. The Act prohibits employers from discriminating against employees on the basis of age. 29 U.S.C. Section(s) 623. "Employee" includes "any individual who is a citizen of the United States employed by an employer in a workplace in a foreign country" (29 U.S.C. Section(s) 630(f)); and it is common ground that the Act covers RFE/RL.
On cross-motions for summary judgment, the district court found that company liable for violating the Act, ruling that the "foreign laws" exception (29 U.S.C. Section(s) 623(f)(1)) did not apply to breaches of collective bargaining agreements. Mahoney v. RFE/RL, Inc., 818 F. Supp. 1 (D.D.C. 1992). The case then proceeded to trial on the issue of damages. A final judgment was entered May 10, 1993. The court amended this in a Revised Order, entered June 8, 1993, and another Order, entered July 7, 1993. RFE/RL appeals the judgment establishing its liability and the award of damages for violating the Act. Mahoney and De Lon cross-appeal the judgment setting the amount of their damages. The "foreign laws" exception to the Act states:
It shall not be unlawful for an employer, employment agency, or labor organization-
(1) to take any action otherwise prohibited under subsections (a), (b), (c), or (e) of this section where ... such practices involve an employee in a workplace in a foreign country, and compliance with such subsections would cause such employer, or a corporation controlled by such ...