Pfeiffer v. Wm. Wrigley Jr. Co.

• Decision Date: 14 February 1985
• Docket Number: No. 83-2935,83-2935
• Citation: 755 F.2d 554
• Parties: 37 Fair Empl.Prac.Cas. 85, 36 Empl. Prac. Dec. P 35,015 John W. PFEIFFER, Plaintiff-Appellant, v. WM. WRIGLEY JR. COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 554

755 F.2d 554

37 Fair Empl.Prac.Cas. 85, 36 Empl. Prac.

Dec. P 35,015

John W. PFEIFFER, Plaintiff-Appellant, v. WM. WRIGLEY JR. COMPANY, Defendant-Appellee.

No. 83-2935.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 28, 1984.

Decided Feb. 14, 1985.

Steven J. Rosenberg, Chicago, Ill., for plaintiff-appellant.

Carol B. Manzoni, Pope, Ballard, Shepard & Fowle, Ltd., Chicago, Ill., for defendant-appellee.

Before CUDAHY and POSNER, Circuit Judges, and FAIRCHILD, Senior Circuit Judge.

POSNER, Circuit Judge.

The question for decision is whether the Age Discrimination in Employment Act, 29 U.S.C. Secs. 621 et seq., before it was amended in 1984, had any extraterritorial reach.

The plaintiff, John Pfeiffer, was hired in 1974 in Chicago by Wm. Wrigley Co. to be the company's Director for the Soviet Union and Eastern Europe. In 1978 he was put on the rolls of Wrigley's wholly owned German subsidiary, Deutsche Wrigley GmbH, where he continued to do the same type of work as before out of his office and home, both of which were in Munich. He was let go in 1983 when he turned 65, and brought this suit against Wm. Wrigley Co. The district court dismissed the suit on the company's motion for summary judgment. 573 F.Supp. 458 (N.D.Ill.1983). For purposes of this appeal we must assume (though the facts are controverted) both that Wrigley directed its German subsidiary to drop Pfeiffer and that it did so on account of his age.

The Act provides, in 29 U.S.C. Sec. 626(b), that its provisions "shall be enforced in accordance with the powers, remedies, and procedures provided in section ... 216 (except for subsection (a) thereof) ... of this title." When we go to 29 U.S.C. Sec. 216, which is part of the Fair Labor Standards Act, we find in subsection (d) that "no employer shall be subject to any liability or punishment under this chapter ... with respect to work heretofore or hereafter performed in a workplace to which the exemption in section 213(f) ... is applicable." Section 213(f) provides that the Fair Labor Standards Act "shall not apply with respect to any employee whose services during the work-week are performed in a workplace within a foreign country." The Third Circuit held in Cleary v. United States Lines, Inc., 728 F.2d 607 (3d Cir.1984), that the unequivocal meaning of this chain of incorporations is that an employee who works outside of the United States has no rights under the Age Discrimination in Employment Act, and its holding has been adopted by the Fourth and Tenth Circuits. See Thomas v. Brown & Root, Inc., 745 F.2d 279, 281 (4th Cir.1984) (per curiam); Zahourek v. Arthur Young & Co., 750 F.2d 827 (10th Cir.1984).

Against the approach taken in these decisions it can be noted that section 626(b) does not say that the provisions of the Age Discrimination in Employment Act shall be enforced in accordance with section 216 (minus subsection (a) thereof) and hence in accordance with section 213(f); it says it "shall be enforced in accordance with the powers, remedies, and procedures" in section 216. Both sections are, as we said earlier, part of the Fair Labor Standards Act, which fixes maximum hours and minimum wages. Section 216(a) creates criminal remedies for violation of that Act, and it seems apparent that one purpose of the reference in section 626(b) to section 216 was to exclude criminal remedies for violations of the Age Discrimination in Employment Act. Cf. 113 Cong.Rec. 31254 (1967) (remarks of Senator Javits). Sections 216(b) and (c) of the Fair Labor Standards Act create private damage remedies, and a public remedy enforced by the Secretary of Labor, respectively, and the evident purpose of section 626(b) was to make these civil remedies available to people complaining of violations of the Age Discrimination in Employment Act. The part of section 216(d), quoted earlier, that incorporates section 213(f) by reference creates an exemption rather than a power, remedy, or procedure; and maybe therefore section 626(b), even when read literally, does not incorporate this part of section 216(d) and therefore does not read on the issue of extraterritoriality. This distinguishes Lorillard v. Pons, 434 U.S. 575, 98 S.Ct. 866, 55 L.Ed.2d 40 (1978), which held that there is a right to a jury trial in age-discrimination cases, and which the Third Circuit in Cleary relied on heavily for the view that Congress meant eactly what it said when in the age-discrimination law it incorporated by reference most of the procedures and remedies of the Fair Labor Standards Act. See 728 F.2d at 608-10; 434 U.S. at 582, 98 S.Ct. at 871.

There is also a lack of "fit" between section 213(f), obviously drafted with reference to wage and hour violations only, and the quite different sort of violation that consists of firing or otherwise discriminating against an employee on account of his age. With the exception of such ambulatory jobs as airline pilot, or a bus driver or tour director whose duties take him across our boundaries with Mexico or Canada, see Hodgson v. Union de Permisionarios Circulo Rojo, S. de R.L., 331 F.Supp. 1119, 1121-22 (S.D.Tex.1971); Wirtz v. Healy, 227 F.Supp. 123, 129 (N.D.Ill.1964), the wages a worker is paid and the hours he works are unambiguously associated with a place in which the work is done, and therefore the only question in applying section 213(f) to a wage or hour violation is, where was the worker working when the violation occurred? But in the case of age discrimination the unlawful act is disconnected from the employee's work. He might have done all his work in the United States and been transferred abroad for one day so that he could be fired without violating the Age Discrimination in Employment Act. This ploy would not succeed in a wages or hours case; a transfer abroad would not wipe out previous violations of the worker's rights under the Fair Labor Standards Act. It would be pretty surprising if the ploy worked in an age-discrimination case, and Wrigley does not argue it would--which may indicate some sense of unease about the literal approach to the incorporation of section 213(f) into section 626(b).

But even if the approach taken by the other circuits is not completely compelling on its own terms, we can find nothing in the Age Discrimination in Employment Act or its background that suggests the Act was intended to have an extraterritorial reach beyond what might be necessary to prevent transparent evasions of the sort suggested in our last paragraph. The federal agencies responsible for enforcing the Act have assumed, apparently from the beginning, that it was intended to be limited to domestic employment. See, e.g., 29 C.F.R. Sec. 860.20 (1970). And to apply the Act extraterritorially could be more than a little awkward. The normal basis of national sovereignty is territorial. So if Germany has a law requiring employees to retire at the age of 65 (presumably to spread work in order to reduce unemployment), no one can doubt the authority of Germany to apply the law to Pfeiffer; and if it did so, and if the Age Discrimination in Employment Act were also applicable, Wrigley would find itself having to comply with inconsistent laws, which it could do only by moving Pfeiffer to another country. Incidentally, this particular problem would not arise under the Fair Labor Standards Act itself if that Act were applied abroad. There can be few if any nations that fix a maximum wage, or minimum hours of work, so there would be no conflict between the Act and local law--although having to pay American wages to foreign workers might of course impose a crushing competitive disadvantage on American firms abroad.

Pfeiffer's lawyer stated at oral argument that Germany does have a law, applicable to Pfeiffer, requiring retirement at age 65. Our own perhaps halting efforts to research the German law of retirement leave us unclear whether this is so, see Schaub, Arbeitsrechts Handbuch 280, no. 7; 505, no. 13; 1013, Sec. 8.I (1972); and although we could treat counsel's statement as an admission (and a very damaging one to his cause), we hesitate to place heavy weight on an unguarded and possibly inaccurate statement made in the heat of oral argument. We shall therefore treat the hypothetical German law merely as an illustration of the problems that could arise in applying the Age Discrimination in Employment Act abroad.

The fear of outright collisions between domestic and foreign law--collisions both hard on the people caught in the cross-fire and a potential source of friction between the United States and foreign countries--lies behind the presumption against the extraterritorial application of federal statutes, on which see, e.g., Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285, 69 S.Ct. 575, 577, 93 L.Ed. 680 (1949); Commodity Futures Trading Comm'n v. Nahas, 738 F.2d 487, 493 (D.C.Cir.1984). Although the presumption is not absolute, see, e.g., Tamari v. Bache & Co. (Lebanon) S.A.L., 730 F.2d 1103, 1107-08 and n. 11 (7th Cir.1984), we can think of no good reason for departing from it here. Indeed, its wisdom is confirmed by imagining the complications that could result from applying the Age Discrimination in Employment Act in a case where the employer was foreign and the employee American, or the employer American and the employee foreign, or both foreign. Pfeiffer would like us to limit our consideration to a case--his case--where both employer and employee are American (since for purposes of this appeal we must assume, as Pfeiffer alleges, that Deutsche Wrigley is just the alter ego of its American parent). But we cannot do that unless there is some principled basis for confining the extraterritorial reach of the statute (if it has any such reach) to his case. Nothing in the language of the statute suggests a basis for doing this but it can be argued that conflict of laws principles would automatically confine the Act's extraterritorial reach. This would...