Schnader Wins Novel Argument in Labor Discrimination Claim

On behalf of a French bank client, HSBC France, the Schnader Labor & Employment Practice Group in New York (Chris Carty and Scott Wenner) recently utilized a novel argument to obtain summary judgment of two national-origin discrimination claims.

The American plaintiff, a former division head of the bank’s New York branch office, claimed he was wrongfully dismissed and the bank owed him unpaid bonuses, severance and other benefits. The plaintiff also claimed he lost his job only because French nationals at the bank branch were guaranteed jobs at the bank, either in the U.S. or in France, while Americans were not.

The argument and outcome of the national-origin discrimination claims is notable as a case of first impression. The bank argued in its summary judgment motion that plaintiff and the French citizens employed at the branch were not “similarly situated” to one another, a required element for a discrimination claim, because the French expatriates had been assigned to the New York branch as “secondees,” i.e. on temporary contractual assignments from the home office. The evidence showed that the secondees faced substantial dislocation, risk and expense not experienced by the resident employees, such as loss of government and corporate benefits and seniority, and increased costs of transportation, education and residence, that necessitated the different treatment of secondees. No discrimination decisions with similar facts were located.  The Court agreed that secondees are not similarly situated to resident employees because of the risks, costs and disruption they experience.

The bank had also sought summary judgment on the grounds that the national-origin discrimination claims were disguised claims for citizenship discrimination. That is, the bank argued that plaintiff was actually claiming that French citizens employed by the bank, not those of French ancestry, were treated more favorably than plaintiff. First, citizenship is not a protected category under the discrimination statutes. Second, a bilateral commerce treaty between France and the United States permitted the bank to prefer French citizens over American citizens. Bilateral commerce treaties typically permit foreign corporations operating in the host country to employ its citizens in key technical and management positions in preference to other workers in the host country.  The Court declined to rule on the merits of this argument.