A FEDERAL appeals court has decided it is all right for foreign investors who buy companies in the United States to refuse to employ Americans, simply because they are Americans.
Five years ago Quasar, an American owned firm, was bought by Matsushita Electric Industrial Company of Japan. Matsushita then fired Quasar's top management, replacing it with Japanese executives.
The dismissed American managers then sued Matsushita for discrimination on the basis of age and national origin. After they won their case in the district court, the Seventh Circuit Court of Appeals ruled that Quasar's new Japanese owners did not commit an illegal act, because job discrimination on the basis of citizenship is permitted under a treaty with Japan.
Far from creating jobs for Americans, as many people have repeatedly claimed, foreign investment in the US could, under this policy, become a large new source of employment for foreign citizens. The notion that foreign investors should not only be free to buy valuable American industrial assets, but also should then be able to discriminate against the firm's American workers is simply absurd.
Have we become so dependent on foreign investment to finance both government debt and business growth that we no longer can stand up for the rights of our citizens when those rights are abused by employers, including employers who are foreign investors?
I am not against the ability of foreign interests to invest in our economy. But that does not mean we should ignore either the rights of American citizens or important national-security interests in an effort to attract foreign investment.
Legislation before the House Subcommittee on Commerce, Consumer Protection, and Competitiveness would strengthen the law under which the president may restrict foreign investment for national-security reasons. Although the major provisions of the bill are based on recommendations from the Defense Department's own science board and the General Accounting Office, the administration has opposed the bill on the grounds that it would discourage foreign investment in the US.