It is a longstanding principle of American law "that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States." This is a valid approach whereby unexpressed congressional intent may be ascertained. It serves to protect against unintended clashes between laws of the United States and those of other nations which could result in international discord.
Title VII of the Civil Rights Act of 1964 prohibits various discriminatory practices by employers who are "engaged in an industry affecting commerce" , with "commerce" defined in part as trade or traffic among the several states "or between a State and any place outside thereof", and "state" defined as including the District of Columbia and specified territories. Another provision states that Title VII "shall not apply to an employer with respect to the employment of aliens outside any State". Petitioner, a naturalized United States citizen, who had been born in Lebanon worked in Saudi Arabia for 4 years as the employee of an oil company which had been incorporated in Delaware. After the employee was discharged by the company, he filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) and subsequently filed suit against the company in the United States District Court for the Southern District of Texas, which suit sought relief under both state law and Title VII on a claim that the employee had been harassed and ultimately discharged by the company on account of his race, religion, and national origin. The company moved for summary judgment on the ground that the District Court lacked subject matter jurisdiction over the case because the protections of Title VII do not extend to American citizens employed abroad by American employers; and the District Court, granting that motion, dismissed the Title VII claim and dismissed the state-law claims for lack of pendent jurisdiction . Despite an intervening EEOC policy statement which interpreted Title VII as applying to discrimination against American citizens outside the United States, a panel of the United States Court of Appeals for the Fifth Circuit affirmed the District Court's judgment; and, after vacating the panel's decision and rehearing the case en banc, the Court of Appeals again affirmed the District Court's judgment. On certiorari, judgment was affirmed.
Does Title VII of the Civil Rights Act of 1964 apply extraterritorially to regulate employment practices of United States employers who employ United States citizens abroad?
The Court stated that Congress had authority to enforce its laws extra-territorially beyond the United States. Whether Congress exercised that authority was a matter of statutory construction. After looking to Title VII language to effectuate congressional purpose, the court concluded that Title VII had a domestic focus, as Congress had not provided for overseas enforcement where it could have. The Court concluded that petitioners failed to present sufficient affirmative evidence that Congress intended Title VII to apply abroad.