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Spiess et al. V. C. Itoh Co America, Inc. By Edeta Roofe

Judicial body . United States District Court. Southern District of Texas. Facts. 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 practic

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Spiess et al. V. C. Itoh Co America, Inc. By Edeta Roofe

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    1. Spiess et al. V. C. Itoh & Co( America), Inc. By Edeta Roofe

    2. Judicial body United States District Court. Southern District of Texas

    3. Facts 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.

    4. Issue 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?

    5. 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.

    6. Decision 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 party.

    7. Rationale 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.  

    8. Relevancy 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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