LEGAL ENVIRONMENT 5 - Essay Example

The law which would be discussed is that of Equal Employment opportunity. It has been pointed out that under the traditional principles of international law the activities of an overseas subsidiary which had been incorporated according to the laws of another were not subject to US legal regulation; the main reason for this being the fact that the nationality of a business entity was dependent on the country in which it had been incorporated.2 This has been boycotted by the Congress. In context of employment there have been introduced various civil law rights which include Title VII, the Age Discrimination Employment Act (ADEA) and the Americans With Disabilities Act (ADA).

Extraterritorial effect has been given to these rights. It has been said that this had been provided so as to extend the reach of US employment laws which was as a result of the Supreme Court decision in Boureslan case in which Title VII to protect US citizens who were working abroad was refused, due to the international jurisdiction principle.3 The problems that tend to arise with regards to foreign company constantly insisting to hire its own nationals in US, and the main reason for this being the general knowledge which is possessed by them with regards to matters of the company.

Thus there have been many claims of discrimination on the basis of national origin.4The courts has acknowledge the FCN treaty which allows for hiring of nationals in the subsidiary of the parent company, only on certain designations5. However it has been stated by the Supreme Court that a subsidiary of a Japanese company does not come under the FCN treaty since it has been established in the US.6By the analysis it has been clearly verified that US discrimination laws apply to foreign employers operating inside the US.

7 Further it has been stated that even though the FCN treaty right allows for the hiring of nationals of parent company, there is no justification in FCN for dismissal of a US citizen because of age, which would be a discrimination.8 The courts have illustrated that right to prefer a citizen does not allow the employers to discriminate on other grounds.9 Further the right of FCN given to corporation to favor its own citizens does not make allow sexual harassment.10 However it can be clearly seen that the citizenship and national origin are in conflict, thus the right to discriminate based on FCN treaty is in conflict with discrimination on national origin which is prohibited under Title VII.

11The risks that a company takes when establishing business globally include among other things the different customs and laws, the cost of labor, taxes and other variant factors depending from country to country. The laws as have been pointed are mainly focused upon discrimination, equal pay and labor laws. The most important factor that should be taken into account by the company is to carefully research the legal position of their establishment in the country and to act accordingly. Further a company should take into minimum wages and the taxation process within the country.

The possibilities of negotiation with the State are possible if it is a large corporation. The possible treaties that have been signed between the countries can be looked