Americans who take jobs overseas had better do so with their eyes open. A ruling last month from the U.S. Claims Court makes it clear that if U.S. foreign policy considerations sour the employment deal, the government has no financial obligation to the unlucky workers involved.
The ruling rejected the arguments raised by five petroleum engineers who were working for a Libyan oil company when the White House imposed economic sanctions that forced them to leave Libya.
Because they were working under contracts, they said that the government action had taken lucrative property rights from them.
Under the constitution, the government has to pay when it takes someone's property, and they were seeking that compensation.
The U.S. Supreme Court has been chary about laying down firm principles on just what kind of interference with property adds up to a "taking," for which the Treasury must reimburse those who lose their property. The Justices have tended to look at the facts of each case and see how they add up.
But in general, the Nov. 4 decision in Chang v. U.S. notes, three elements seem to dictate the outcome of such controversies: Intruding on or taking possession of physical property is more likely to give rise to compensation than interfering with contractual rights.
An irredeemable loss is more profound than a temporary inconvenience.
An unexpected loss gives a more valid claim than one where the investment was risky from the start because reasonable persons could have expected the "taking."
Using those standards, Judge John P. Wiese just didn't think the engineers' case came to much. All they lost was the right to continue to earn money at their jobs, and there was good reason to think that they could find other employment.
But the ruling is harshest when it comes to the question of whether the chain of events that forced them to leave Libya was foreseeable. The legislation allowing the president to act -- the Emergency Economic Powers Act -- was passed 10 years before they signed their employment contracts. But beyond that general authority, U.S. relations with Libya were so obviously deteriorating that some sort of sanction had to be rated a strong possibility.
Wiese's opinion points out that the contract itself contained a clause letting the engineers off if Libya revoked their work permits. If they knew Tripoli might make such a move, they should have guessed that Washington might call them home, he said.
In other cases, courts ruled that: Bidders for corporate control don't have to have their financing lined up before making a tender offer. The U.S. Court of Appeals in San Francisco, in refusing to stop a play by T. Boone Pickens and associates for Newmont Mining Corp., read the federal law on tender offers as requiring only that stockholders have in hand all the information that is available.
Newmont argued that the requirement that stockholders be told "the source and amount of the funds" to be used in an acquisition was not satisfied by Pickens' disclosure that he was getting $1.1 billion through Drexel Burnham Lambert and expected to arrange another $1.9 billion elsewhere. But the judges ruled that as long as a bidder amends the disclosure statement to include later funding sources, the offer complies with the Williams Act.
(Newmont v. Pickens, Nov. 6) The business accounts kept for the Internal Revenue Service are not the ones that divorce court judges should be looking at. The Montana Supreme Court told judges setting levels of child support to be paid by parents who own their own firms to focus on cash flow rather than the bottom line in the company's books. Artificial expenses allowed by the tax laws for social purposes,such as accelerated depreciation,are to be ignored in calculating how much disposable income the parent has available.
(In re-Mitchell, Nov. 24)
Moskowitz covers legal affairs for McGraw-Hill World News.