Wednesday, April 25, 2007
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Court: Trade Treaty Does Not Preempt State Whistleblower Laws
By TINA BAY, Staff Writer
A treaty between the United States and Japan providing that nationals and companies of either country may hire specialists “of their choice” while doing business in the other does not preempt California’s whistle blower statute, the Ninth U.S. Circuit Court of Appeals held yesterday.
A three-judge panel unanimously reversed a ruling by U.S. Magistrate Judge Leslie E. Kobayashi of the District of Hawaii, who granted judgment on the pleadings for Japan Airlines in a suit by two of its former employees.
Kobayashi had concluded that the U.S.-Japan Friendship, Commerce, and Navigation Treaty exempted JAL from claims that former employees Martin Ventress and Jack Crawford brought under California’s whistle blower statute.
Harrassment Alleged
Ventress, a flight engineer, and Crawford, a commercial pilot, were formerly employed by Hawaii Aviation Contract Services, Inc. to perform services for JAL flights.
In a 2002 federal lawsuit filed in the Central District of California, the two sued JAL and Hawaii Aviation claiming they were repeatedly harassed after complaining to airline officials about the company’s decision to force a seriously ill pilot to fly in June 2001. They had asserted the airline’s conduct violated Japanese aviation laws as well as JAL’s own operations manual.
Ventress alleged the airline demanded that he undergo psychiatric evaluations and had prevented him from flying since Sept. 2001. Crawford claimed he was subjected to repeated performance checks and homework assignments, and that his assignment to JAL was eventually canceled on the ground of unsatisfactory performance.
The plaintiffs sought recovery for violation of California’s whistleblower statute, wrongful termination in violation of the public policy protecting whistleblowers, and emotional distress under California law.
The case was transferred in 2003 to the District of Hawaii, where Kobayashi ruled that Article III(1) of the U.S.-Japan commerce treaty preempted the state whistleblower statute, and thus barred the plaintiffs’ action. Holding Japanese employers liable for violation of California employment law would conflict with the employers’ treaty-conferred right to engage specialists “of their choice,” the judge concluded.
The appellate panel disagreed on the issue, which it said was of first impression in the Ninth Circuit.
No Conflict Found
Senior Judge Alfred T. Goodwin wrote for the court:
“[T]he district court believed that JAL has a treaty right to ignore domestic employment law even for personnel decisions that involved only non-Japanese citizens. Taken to its logical conclusion, such an expansive construction of article III(1) would lead to absurd results, such as exempting foreign employers from collective bargaining laws.”
No conflict existed between California law and the treaty that would trigger preemption, he explained:
“California’s whistleblower protection laws merely prevent JAL from retaliating against employees for reporting and resisting the employer’s domestic law violations; the laws in no way conflict with JAL’s limited treaty right to discriminate in favor of Japanese citizens.”
Senior Judge Robert R. Beezer and Judge Richard C. Tallman concurred in the opinion.
The case is Ventress v. Japan Airlines, 04-17353.
Copyright 2007, Metropolitan News Company