Companies around the world increasingly are engaging in cross-border business transactions. Globalization is a must if companies want to continue to be competitive in the marketplace—indeed it is an inevitable reality. However, in the midst of this reality is another reality: the legal implications of establishing operations abroad. Transnational expansion introduces companies to an interesting game of tug-of-war in which companies may find themselves torn between compliance with U.S. law and compliance with the laws of the host country. This Note discusses this tug-of-war in the context of Title VII of the Civil Rights Act of 1964. Over 15 years ago, it was debatable whether Title VII applied extraterritorially, but Congress has since answered this question in the affirmative. However, one victory only created more hurdles. These hurdles, for purposes of this Note, are the “employee question” and the “law question.” With respect to the former, the basic question is: What is the proper scope of Title VII’s extraterritorial employee coverage? With respect to the latter, the question is: What constitutes a conflict of “law” sufficient to permit an employer to avoid compliance with Title VII? These are critical questions, the resolution of which is necessary in order to preserve Title VII’s effectiveness. This Note offers suggestions as to how each question should be resolved. Each resolution starts from the basic premise that Title VII can only go so far without sacrificing its effectiveness. The challenge is recognizing Title VII’s limitations and finding alternative resolutions for those situations to which Title VII realistically cannot apply, and this challenge is precisely the objective of the Note.
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