Employment Litigation · Primary-source case analysis

Aramco: The Court’s Former Title VII Extraterritorial Rule Was Superseded by Congress

By Aneeta Mishra and Timothy Chan

Published August 15, 2026 · Updated October 29, 2026

Decision: EEOC v. Arabian Am. Oil Co., 499 U.S. 244 (1991).

EEOC v. Arabian American Oil Co. involved a naturalized United States citizen employed in Saudi Arabia who alleged race, religion, and national-origin discrimination by an American employer.

The alleged discrimination occurred outside the United States

Boureslan worked in Saudi Arabia and sued under Title VII after discharge. The lower courts held the statute did not reach that overseas employment.

The Court applied the presumption against extraterritoriality

Broad definitions of commerce did not clearly state that Congress intended Title VII to regulate employment abroad. The 1991 majority therefore affirmed dismissal under the statute as it then stood.

Congress promptly changed the governing rule

The Civil Rights Act of 1991 extended specified federal employment protections to United States citizens employed abroad by American employers and foreign entities controlled by them, subject to statutory defenses and exceptions.

The current statute, not Aramco’s bottom line, controls

Aramco remains relevant to clear-statement methodology. Overseas employment advice must start with amended Title VII, employer-control factors, citizenship, foreign-law defenses, and the precise work location. The EEOC’s multinational-employment guidance explains why U.S. citizenship and an American or American-controlled employer matter; the historical dismissal is not the current coverage rule.

Justice Marshall, joined by Justices Blackmun and Stevens, dissented from the 1991 decision. He treated the presumption against extraterritoriality as an interpretive guide, rather than a strict requirement for express statutory words. He read Title VII’s language, structure, history and agency interpretations together as showing that Congress intended to protect U.S. citizens working abroad for U.S. employers. That was a disagreement over the former statute’s meaning; the later statutory amendments remain essential to a present coverage question. Arabian American Oil Co., 499 U.S. at 260–263, 278 (Marshall, J., dissenting).

Justice Scalia agreed with the result but disagreed with the majority’s treatment of deference to the EEOC. Under the agency-deference framework then in use, he would have assumed the EEOC was entitled to deference, but still found its overseas-coverage interpretation unreasonable in light of the presumption against extraterritoriality. His concurrence supplies a distinct historical route to the same judgment. Arabian American Oil Co., 499 U.S. at 259–260 (Scalia, J., concurring in part and concurring in the judgment).

Key takeaways

• Confirm the employee’s citizenship and primary work location.
• Determine whether the employer is American or American-controlled.
• Analyze the foreign-law defense and statutory exclusions.
• Do not cite Aramco’s superseded outcome as current Title VII coverage law.