Reference no: EM131702555

Question: JAL was a Japanese commercial air carrier based in Tokyo. HACS, a Hawaii corporation with its principal place of business in Honolulu, provided contract flight crews to JAL. Plaintiffs Ventress and Crawford were employed by HACS to perform services for JAL flights. The plaintiffs' employment agreements with HACS contained mandatory arbitration provisions. In December 2002, Ventress and Crawford jointly filed a complaint against JAL and HACS in the U.S. District Court for the Central District of California, alleging that JAL required a seriously ill pilot to fly in June 2001, in violation of American and Japanese aviation laws as well as JAL's own operations manual. Crawford expressed his concern to a JAL official in Honolulu in July 2001. Afterward, he experienced harassment from his superiors, including repeated performance checks, questions, and homework assignments. In December 2001, HACS informed Crawford that his assignment to JAL was cancelled because of unsatisfactory performance. That same month, Ventress submitted reports on the June incidents to JAL, HACS, and aviation regulators. Ventress claimed repeated harassment from JAL thereafter, including demands to undergo psychiatric evaluations. Ventress was not allowed to fly after September 2001. The complaint sought recovery for violation of California's whistleblower statute, wrongful termination in violation of the public policy protecting whistleblowers and emotional distress. The California whistleblower law states in pertinent part, "An employer may not retaliate against an employee for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation or noncompliance with a state or federal regulation." Cal. Labor Code § 1102.5(b). The defendant claimed that the plaintiffs' claims were preempted by the Friendship, Commerce, and Navigation Treaty (U.S.-Japan, April 2, 1953). The treaty was primarily designed to protect the right of employers on both sides of the Pacific to "utilize the services of their own nationals in managerial, technical, and confidential capacities to be critical." The court here was faced with three choices:

(1) dismiss the case as preempted by the treaty;

(2) stay the proceedings and require the plaintiffs to pursue arbitration under the express terms of their employment contracts; or

(3) permit the action to proceed under the California Whistleblower Law.

What policy considerations can you come up with in favor of or against each of these options? See Ventress v. Japan Airlines, 486 F.3d 1111 (9th Cir. 2007).