Mahoney v. RFE/RL, Inc.

RFE/RL, Incorporated (defendant), a Delaware nonprofit corporation that provided radio-broadcast services, had its principal place of business in Germany. RFE/RL’s employees in Germany were represented by unions. In 1982, RFE/RL entered into a collective-bargaining agreement with the unions that represented its employees in Germany. The collective-bargaining agreement required employees to retire at age 65. In 1984, the United States Congress amended the Age Discrimination in Employment Act (age-discrimination act) to protect American citizens working for American corporations overseas from age-related discrimination. However, § 623(f)(1) of the age-discrimination act provided for the foreign-laws exception, which excepted a company from complying with the act if compliance would constitute a violation of the laws of the country in which a workplace was located. Consequently, RFE/RL sought permission from the Works Council in Germany to allow its employees in Germany that were American citizens to work until they reached the age of 70 pursuant to the age-discrimination act, which would have been a violation of the collective-bargaining agreement. The Works Council was an elected body that ensured companies adhered to the requirements of union agreements. Any departure from a provision of a collective-bargaining agreement was illegal. The Works Council determined that allowing American employees to work past age 65 would have been a violation of the collective-bargaining agreement. RFE/RL appealed the Work Council’s decision regarding several American employees to the Munich Labor Court. The labor court affirmed the Work Council’s decision. Subsequently, RFE/RL terminated Roy De Lon and William Mahoney (plaintiffs), both American citizens working in Germany, after they reached the age of 65 pursuant to the collective-bargaining agreement. De Lon and Mahoney sued RFE/RL under the age-discrimination act in the district court. Both sides agreed that the terminations violated the age-discrimination act if the foreign-laws exception did not apply. The district court held that the foreign-laws exception did not apply because the mandatory-retirement provision was a contractual obligation, not a law of the German government. RFE/RL appealed.