The Long Arm of the US Workplace

Films, fashion, food: American cultural colonialism is felt around the globe. But are the workplaces of the world also being globalised? Exporting jobs is one thing: but is America also exporting its notion of what constitutes fairness in the workplace?

As outsourcing creeps up the food chain - as the US exports not just sweatshop jobs but yours and mine - America's peculiar culture of workplace relations is having a bigger impact around the globe.

Sexual harassment, a wrong virtually invented by Americans, is now vilified in countries that previously had a proud tradition of abusing the opposite sex at work. Race and sex discrimination are no longer considered exotic transatlantic obsessions. The values of the American workplace are steadily taking over the workplaces of the world.

But if the American culture of employment lawsuits is also becoming global - along with all those call centre and software jobs - then sending work overseas may no longer be such a frugal proposition. If litigation goes the way of hamburgers and jeans, colonialism of the workplace may prove costly.

The political costs of outsourcing are obvious in an election year: shipping voters' jobs offshore may make economic sense, but politicians struggle to defend it.

Several state governments are considering legislation banning outsourcing of their functions to low-cost locations overseas: my own state of Maryland had a crisis of conscience recently after its welfare recipients calling a benefits help-line found themselves directed to a call centre in India. Some Maryland legislators found it unconscionable that unemployed Marylanders should be forced to ask advice from the underpaid Indians who stole their jobs.

In a climate where such comparisons can be made with a straight face, outsourcing has a tough political future.

But the true cost of job exports may be subtler than that, both for American employers and for the global marketplace. US businesses may not realise the extent to which the long arm of American employment law follows jobs overseas; and business people in the rest of the world may not be quite prepared for this invasion of the litigators.

Much like American taxes, American employment rights pursue US citizens around the world. So an American woman shipped off to a posting in Palermo can complain - and potentially sue in a US court - if her boss habitually touches her elbow or compliments her on her hair-do. So long as the employer is either a US company, or an enterprise "controlled" by an American partner, she has the same rights in Palermo as Peoria: at the slightest sign of sex in the workplace, she enjoys the fundamental American right to overreact.

This right is not absolute: foreigners working overseas are not covered by US employment law (even if they work for the most American of employers).

And Americans are not protected where there is a clear conflict with domestic law. But the conflict must be clear indeed. So, in the most famous case in this area, it was ruled lawful for a US company to refuse to hire a non-Muslim pilot to fly helicopters in Saudi Arabia, because Saudi law mandated beheading for non-Muslims who flew over Mecca. But a US hospital could not refuse to send Jewish doctors to the same country - because Jews were not illegal, they were just unwelcome. American companies overseas are allowed to discriminate - but only when they have absolutely no choice.

But obeying the law, locally, is still no defence against the American plaintiffs' bar.

In an equally famous case in the annals of globalised employment law, the US subsidiary of an Italian company ran into trouble in a US court because, when downsizing globally, it routinely discharged executives over 60 years old in Italy. Doing so was legal in that country, though it would not have been in America. But a US court ruled that the company's Italian behaviour could still be used to support a claim of illegal age discrimination in America. The moral: what companies do overseas - even legally - can still be used against them.

And the extraterritorial reach of the American courts is not the only problem, says Bill Milani, head of the international employment law group at Epstein Becker & Green, the law firm. Employees around the world increasingly know their rights and are ready to fight for them in court, at home or abroad.

America led the way - "one thing we have been pretty good at exporting is sexual harassment law," says Mr Milani - but now employment litigation is a global phenomenon. The rewards are still much higher in the US, where the law often provides tougher penalties and juries deliver bigger verdicts. But companies that litigate job cases overseas can pay a high price too: in terms of public relations, morale, and management time.

He says the only solution, for multinational employers, is to set down certain inalienable principles in a global employment code that guarantees worker dignity worldwide - and back it up with a good strong internal grievance procedure to resolve disputes before they get to court.

"Nobody wants to be harassed or discriminated against wherever they work in the world," says Mr Milani. Global companies must recognise that fact and write it into their own policies - whatever the local law may say to the contrary. Connie Wong, whose company, CSW Global, does diversity training for multinational corporations, backs him up. "There is a core set of diversity issues that translate globally," she says.

But what that really means is: American values have begun to dominate in that most unlikely of areas, the workplace. First hamburgers, then harassment. It is the price of globalisation.