CASE 8-9

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CASE 8-9 Powered By Docstoc
					Spiess et al. V. C. Itoh & Co(
       America), Inc.

      By Edeta Roofe
              Judicial body

   United States District Court. Southern
    District of Texas
   The plaintiffs were Spies and other non
    Japanese employees of C. Itoh and Co.
    ( America), Inc, who were filing against
    the Japanese owned firm for racial
    discrimination. The allegation stems
    from the employment practices of the
    firm in employing only Japanese
    nationals to certain key positions.
   The Japanese- United States Treaty of Friendship,
    Commerce and Navigation, which establishes the
    reciprocal right of a national business of either state
    to employ certain category of their national workers
    within the territory of the other state
   Determination of the nationality of the company,
    would be to determine whether or not the treaty
    should allow the American subsidiary of a Japanese
    business the right to hire managerial and other
    specialized professional of their own choice, without
    considering the American laws on racial
    discrimination in employment?
Issues contd.
   The plaintiffs contend that under Article VIII (1), the
    company is a United States company because of its
    incorporation and should not be looked at just as a
    company owned by one party operating within the
    territory of another party.
   The firm referred to the guideline of the Department
    of States to determine the nationality of the treaty
    country. These guidelines stipulate that the
    nationality of an employing firm is determined by
    those persons who own 50 percent or more of the
    stocks of the employing firm, regardless of the place
    of incorporation.
   Itoh-America, which was incorporated
    under American Laws, was deemed to
    be an American business for the
    interpretation of Article XX11 (3). It
    therefore cannot be protected by the
    article, which governs companies from
    one party within the territory of another
   According to article XX11 (3). For the
    purpose of determining nationality of a
    corporation under treaty, the place of
    incorporation should be considered. It
    was therefore decided not to use the
    decision of the previous case that used
    ownership of stocks to determine
    nationality for trading purposes.
   The rapid spread of globalization has led to a
    large increase in overseas workers and
    foreign owned businesses in many countries.
   There must be protection of the employment
    of local worker with the influx of MNE’s
   Businesses with subsidiaries in other
    countries with similar treaties must examine
    carefully the provisions made by these
    treaties and the different ways these
    provisions may be interpreted and used

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