In case of alleged whistleblower discrimination by
Japanese employer doing business in United States, Ninth Circuit finds that
U.S.–Japan Treaty of Friendship, Commerce and Navigation does not preempt state
employment laws, unless latter conflict with limited Treaty right to
discriminate in favor of hiring Japanese citizens
Martin Ventress, a flight engineer, and Jack Crawford, a
commercial pilot (Plaintiffs), complained of an incident in which JAL required
a seriously ill pilot to fly in violation of American and Japanese aviation
laws. Ventress and Crawford were employed by Hawaii Aviation Contract Services,
Inc. (HACS) to perform services for Japan Airlines and its subsidiaryJalways Co., Ltd. (collectively “JAL”). Crawford suffered
harassment from superiors after expressing concern about the incident. Ventress
was likewise harassed after reporting the incident to JAL, HACS and aviation
regulators. Plaintiffs sued Japan Airlines and others [Defendants] in
California federal court seeking damages for Defendants’ violation of
California’s whistle blower statute, wrongful termination in violation of the
public policy protecting whistle blowers and emotional distress. The district
court granted Defendants’ motion to transfer the case to the district of
Hawaii.
The Hawaii district court gave Defendants judgment on the
pleadings on the ground that the Friendship, Commerce, and Navigation Treaty,
U.S.‑Japan, in force, October 30, 1953; 4 U.S.T. 2063; T.I.A.S. 2863; 206
U.N.T.S. 143 (FCN Treaty) preempted all of the Plaintiffs’ claims. When
Plaintiffs appealed, however, The U.S. Court of Appeals for the Ninth Circuit
reverses. The Court rules that the FCN Treaty does not preempt state employment
laws.
The Treaty’s language conferring on Japan the right to
engage specialists “of their choice”, grants “only the limited right to
discriminate in favor of their fellow citizens.” [Slip op. 8]. Thus, the Treaty
does not conflict with State whistleblower protection laws.
The purpose of the “of their choice” clause of the FCN
Treaty was to “ensure the foreign company’s ability to control its overseas
investments without interference from local‑hiring quotas. The legislative
history of the post‑war treaties suggests that both parties deemed the right to
utilize the services of their own nationals in managerial, technical, and
confidential capacities to be critical.” [Slip op. 5].
“Given the purpose and history of the FCN treaties, our
sister circuits have consistently held that foreign employers do not enjoy
immunity from domestic employment laws that do not interfere with the
employers’ ability to hire their fellow citizens.” [Slip op. 6].
“We hold that the district court erred [in ruling] that JAL
has a treaty right to ignore domestic employment law even for personnel
decisions that involved only non‑Japanese citizens. ... California’s whistle‑blower
protection laws in no way conflict with JAL’s limited treaty right to
discriminate in favor of Japanese citizens. In the absence of conflict, there
can be no preemption.” [Slip op. 6‑7].
Citation: Ventress v. Japan Airlines, 2007 WL
1192010; No. 04‑17353 (9th Cir. April 24, 2007).
