Employment in the U.S. Is a Substantive, Not Jurisdictional, Requirement
By In Rabe v. United Air Lines, Inc., 2011 WL 677946 (7th Cir. Feb. 28, 2011), the Seventh Circuit ruled that the defendant airline was basically too clever for its own good.
Ms. Rabe was a French citizen who worked for United Air Lines at the company’s hub in Paris. At the beginning of her employment, she signed an employment agreement stating that U.S. law would apply to her relationship with the company and would govern any dispute arising from it. So, when she was eventually terminated by United, Ms. Rabe sued in the Northern District of Illinois, claiming discrimination under Title VII and the ADEA.
Unexpectedly, the airline moved to dismiss Ms. Rabe’s claims under Rule 12(b)(1), arguing that the District Court did not have subject matter jurisdiction because the laws under which she sued did not apply to employees working outside the United States. The District Court agreed, noting that Ms. Rabe’s employment contract required the application of U.S. law but did nothing to alter their jurisdictional limitations. Because one of those limitations under Title VII and the ADEA was to work inside the U.S., Ms. Rabe’s claims were subject to dismissal.
The Seventh Circuit proved to be a tougher audience. Citing Arbaugh v. Y & H Corp., 546 U.S. 500 (2006), in which the Supreme Court held that Title VII’s 15-employee threshold was an element of the plaintiff’s prima facie case rather than a jurisdictional requirement, the Seventh Circuit held that Ms. Rabe’s employment in America “goes to the merits of [her] claim rather than the court’s subject matter jurisdiction.” Rabe at *2. Her claims, therefore, could not be dismissed under Rule 12(b)(1).
Rule 12(b)(6), however, seemed to be an entirely different story, but not so in the eyes of the Seventh Circuit. The Court went on to say that, even under Rule 12(b)(6), United’s argument failed. “[W]e see no reason to interpret a contractual choice-of-law provision as effectively excluding the employee from the protection” of “the employment discrimination laws of any country.” Id. at *4. In the Court’s estimation, United had effectively waived any argument concerning Ms. Rabe’s employment outside the U.S. by specifying — in its own employment agreement — that the laws of the U.S. would govern their relationship. Id. That sort of maneuvering, clever though it may be, was like having your cake and eating it too.
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