Corpo's Use Middle East Addresses to Frustrate Employees' Rights

There's a standard corporate dodge encouraged by the Bush Administration that lets corpo's avoid paying taxes, duck any laibilities from poisoning the air or water, and stop unions from getting a foothold in their plants: register your headquarters in another country even though the offices are in the US (that's what the Panama trade deal was all about - the Democrats passed it, btw). Well, American corporations, thanks to a couple of Iraq-war profiteer-related legal decisions, have discovered a brand new use for the Foreign Registration Scam - short-circuiting their workers' rights as employees.

When William Christopher Hyser abruptly lost his job as a police trainer in Iraq - and his $16,000 bonus - he was so angry that he wanted to sue DynCorp, the Virginia-based defense contractor that hired him.

But when he called the company's complaint line, he was told that if he wanted to file a lawsuit, he had to do it in the United Arab Emirates. Like nearly 1,000 other American police trainers in Iraq, Hyser wasn't on the official DynCorp payroll - he was employed by a wholly-owned subsidiary set up in a tax-free-zone Dubai, a business-friendly citystate where labor unions are banned.

"I was so frustrated," said the former Maryland state trooper. "It just blew me away."

DynCorp, one of the largest US defense contractors in Iraq, is one of a small but growing number of US companies that mandate the use of courts in the Middle East to resolve disputes with their American employees. The practice frequently serves to block employees' lawsuits, legal specialists say, because few are able to navigate a still-developing foreign legal system in a distant land.

"The company has put up a hurdle that is probably insurmountable, or is just not going to be worth it to fight," said Richard Posthuma, an international labor specialist at the University of Texas, El Paso.

It's a simple - and apparently legal - scam. By assigning your headquarters officially to a country that doesn't recognize workers' rights, your workers won't have any.

"What is considered appropriate in workplace discipline in the Arab world is not considered appropriate in the US," said Paul M. Secunda, associate professor at Marquette University Law School, who co-authored a book on international employee benefit law.

In Saudi Arabia, it's considered "appropriate" to cut off the hands of an employee whose boss claims stole from the company. How far are US corpo's willing to go with this?

This practice may extend from - certainly it's been helped by - the decision of an ultraconservative Reaganite Federal judge last year that American businesses operating in other countries (in his case, Iraq) are not subject to US law.

The most damning part of Judge Ellis’ decision is the part that, if upheld, gets everybody who stole money in Iraq off the hook. Everybody. In that previous instance I just mentioned, Ellis’ argument went like this:

Last year, Ellis threw out a separate case against Custer Battles, after a jury awarded a $10 million judgment against the company over its work on a contract to replace the old Iraqi currency. Ellis ruled that any fraud was perpetrated on the CPA rather than the U.S. government, even though the U.S. government ultimately footed the bill. (emphasis added)

***

In recent months…Ellis…has twice invited the Justice Department to join the lawsuit without response. Even an administration ally, Sen. Charles Grassley, demanded to know in a Feb. 17 letter to Attorney General Alberto Gonzales why the government wasn’t backing up the lawsuit. Because this is a “seminal” case—the first to be unsealed against an Iraq contractor—”billions of taxpayer dollars are at stake” based on the precedent it could set, the Iowa Republican said.

Why hasn’t the administration joined the case? It has argued privately that the occupation government, known as the Coalition Provisional Authority, was a multinational institution, not an arm of the U.S. government. So the U.S. government was not technically defrauded.

(emphasis in the original)

The MidEast corpo's are essentially making the same argument: if their HQ is registered in a foreign country then they aren't subject to US law even if their physical HQ is clearly in the States. It's a technical, hair-splitting-type legal maneuver, so just to be on the safe side many of them are now requiring their employees to sign contracts acknowledging that the foreign country to which the company is sending them will have sole jurisdiction over any disputes.

DynCorp is not alone in employing strategies to limit its liability in dangerous locations, where the potential for employee lawsuits is great. The Houston-based construction giant KBR mandates that its employees sign arbitration agreements, barring its employees from filing suits in the United States or abroad. Blackwater, a major private security company, recently asked a US court to dismiss a lawsuit filed by widows of American soldiers killed in a plane crash because the crash happened in Afghanistan. Blackwater lawyers argued that Afghan courts should have jurisdiction.

But no company provides a more stark example of the tactic than DynCorp. In addition to listing its Iraq workers as employees of its Dubai subsidiary - and mandating that disputes be heard only in Dubai - DynCorp also added a provision to the contracts of roughly 150 Americans hired to guard a US military base in Qatar that the "courts of Qatar shall alone have jurisdiction" to resolve disputes.

Given that human rights isn't a big issue in most oil-bearing Arabic nation, signing a declaration like this is tantamount to signing away your legal rights altogether.

This can be stopped - very easily, actually - but it would take the Democratic Congress to do it and they've shown ZERO interest in stopping corporate abuses of workers here, let alone in other countries. There are startling investigations but so far NONE of them has resulted in a single law restricting corporate rights to treat workers like serfs.

I ain't holding my breath that that's going to change any time soon, not as long as the minority of Blue Dogs is allowed to hold the party hostage.