Avagliano et al. v. Sumitomo Shoji America, Inc.

Opinion summary

Etalia.ai summary of the majority opinion

The case involved a dispute between American employees and Sumitomo Shoji America, Inc., a subsidiary of the Japanese corporation Sumitomo Corporation. The plaintiffs argued that they were discriminated against based on national origin in violation of Title VII of the Civil Rights Act because they were not promoted to managerial positions reserved for Japanese nationals. The central issue was whether Sumitomo Shoji America could claim exemption from Title VII under the Treaty of Friendship, Commerce, and Navigation (FCN) between Japan and the United States, which allows foreign companies certain rights regarding employment practices within their subsidiaries. The Supreme Court held that while FCN treaties can provide exemptions from domestic laws like Title VII for foreign-controlled corporations operating in another country, this particular treaty did not explicitly grant such an exemption to wholly-owned subsidiaries incorporated in the U.S., as opposed to branches or agencies directly controlled by foreign entities.