The Permanent Mission claimed it was immune, but language in the employee’s contract said it was governed by current legislation of the U.S.
Although a fired secretary for the Permanent Mission of Chile to the United Nations could not bring her claims of sex discrimination, retaliation, and intentional infliction of emotional distress against individual diplomatic envoys and their staff, a federal district court in New York concluded that the Permanent Mission itself had impliedly waived sovereign immunity. It based this conclusion on language in her employment contract that stated the contract was governed by current legislation of the U.S., and accordingly the court denied the Mission’s motion to dismiss for lack of subject matter jurisdiction (Fontaine v. The Permanent Mission of Chile to the United Nations, August 18, 2020, Torres, A.).
As Secretary of General Duties at the Permanent Mission of Chile to the United Nations, the secretary worked under an employment contract setting out her duties, hours, and pay. When she was interviewed for the job by some of the staff, they asked several questions about her marital status and her ex-husband. During her employment, at least one ambassador made public jokes suggesting she was dating her supervisor and made lewd comments about other employees. When she complained to the Chilean Ministry of Foreign Affairs and filed an EEOC charge, she claimed they retaliated against her, stripped her of work assignments, and ultimately fired her, after which they allegedly delayed paying her vacation time or providing her final paycheck.
In addition, after she began working at a local bank, the bank received an anonymous letter claiming that she had "created major disruption in our organization to the point that many people suffered the consequences of her lies and slander." She alleged that the letter was sent by the same staff members at the Mission. Her lawsuit claimed sex discrimination and retaliation under Title VII and New York state and city laws, as well as intentional infliction of emotional distress based on the letter.
Subject matter jurisdiction over the Permanent Mission. Jurisdiction over claims against the Permanent Mission is governed by the Foreign Sovereign Immunities Act, under which a foreign state is presumptively immune unless an exception to the FSIA applies. However, a court may exercise jurisdiction under 28 U.S.C. § 1605(a)(1), which provides for a waiver of immunity under the FSIA when "the foreign state has waived its immunity either explicitly or by implication." As relevant here, waiver of immunity may be implied in cases where a foreign state has agreed that the law of a particular country should govern a contract.
Waiver. The secretary argued that the Permanent Mission waived its sovereign immunity based on her employment contract, which states: "For all legal purposes, this contract shall be governed by the current legislation of the United States." The Mission and the individual defendants disagreed, contending that "any waiver implied by contract’s choice of law provision must be limited to contract claims" and excluded non-contract causes of action. There was no Second Circuit precedent clearly on point, said the court, identifying only a case where waiver was based on an employee handbook containing an express disclaimer of waiver of sovereign immunity.
Employment contract. Here, however, the secretary’s employment contract not only contained no disclaimer, but the contract’s "expansive statement" that the current legislation of the United States governed was unqualified. Non-Circuit cases have held that similar contract provisions are an implied waiver of immunity under the FSIA "that extends not only to contract claims, but also to other claims arising out of the contractual relationship, including employment discrimination." As such, the court found this contract clause "strong evidence" of the Mission’s intent to waive sovereign immunity. As for the Mission’s argument that the clause was intended only to interpret those portions of the contract that incorporate U.S. law, the court stressed that the clause itself was not so limited—it said that U.S. law shall govern "this contract," not just the secretary’s obligations. Accordingly, the Mission’s motion to dismiss for lack of subject matter jurisdiction was denied.
Individual defendants. But the Vienna Convention on Diplomatic Relations governs diplomatic immunity—which is absolute for current diplomatic envoys and limited to acts within the course of their duties for former diplomatic envoys and their administrative and technical staff. To the extent that the secretary’s complaint made employment discrimination claims under Title VII, the NYSHRL, or the NYCHRL against the individual defendants (it was not entirely clear to the court), the court found those claims barred by diplomatic immunity. Although the secretary claimed the alleged sex discrimination were actions outside the individuals’ official functions, there was contrary Second Circuit precedent explaining that workplace discrimination involved actions and decisions within the exercise of official functions. Those claims against the individual defendants were dismissed, as were the claims for intentional infliction of emotional distress, for the same reason.
The case is No. 17 Civ 10086 (AT).
Attorneys: Zein E. Obagi, Jr (Obagi Law Group) for Carolina Fontaine. Daniel N. Arshack (Arshack, Hajek & Lehrman) for The Permanent Mission of Chile to the United Nations.
Companies: The Permanent Mission of Chile to the United Nations
Cases: CoverageLiability Discharge Discrimination Procedure SexDiscrimination SexualHarassment Retaliation StateLawClaims TortClaims NewYorkNews
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