D.C. Circuit rules that discharged Egyptian citizen formerly working as accountant for embassy of United Arab Emirates' was engaged in commercial rather than governmental employment, and therefore could bring suit under commercial activity exception to the FSIA
Mohamed Salem El Hadad (Plaintiff) was an Egyptian accountant who worked as an auditor for the government of the United Arab Emirates (Defendant). Plaintiff went to work for the [Defendant's] embassy in Washington as an auditor and supervising accountant in the cultural attaché's office. When Plaintiff found out that the cultural attaché, and his deputy were embezzling funds, Plaintiff exposed the embezzlement and helped with the investigation. The Egyptian government not only commended but also promoted Plaintiff for his work.
About a year and a half later, someone accused Plaintiff of involvement in the embezzlement. This led authorities to fine and fire Plaintiff. Plaintiff sued Defendant in District of Columbia federal court. That court found that Defendant was engaged in "commercial activity" and thus not immune from federal jurisdiction. When Defendant appealed, the U.S. Court of Appeals for the District of Columbia Circuit affirms.
"The chief issue before us is the [Defendant's] claim to immunity under the Foreign Sovereign Immunities Act. Before passage of the 1976 Act, American courts had generally regarded foreign sovereigns as absolutely immune from suit But almost from the outset, courts recognized a distinction "between the public and governmental acts of sovereign states on the one hand and their private and commercial acts on the other.'" [Slip op. 3 4]
"Since [Plaintiff's] action is "based upon' breach of his employment contract and defamation in connection with that breach, this case involves the commercial activity exception as applied in the employment context." [Slip op. 4]
"Like many of our sister circuits, we have held that a foreign government's civil servants (and diplomats and soldiers) do not qualify for the commercial activity exception. [Cites]. We have not and do not affirm the converse: A foreign government's employee might not be a civil servant (or diplomat or soldier) and still be engaged in quintessentially governmental work " like, for example, a judge."
"Thus, if [Plaintiff] is a civil servant, our analysis stops for we have determined that the [Defendant] is immune from his suit. If [Plaintiff] is not a civil servant, we go on to scrutinize whether his work involves the exercise of "powers that can also be exercised by private citizens, as distinct from those powers peculiar to sovereigns. [Cite]'"
"There is no definition of "civil service' in the Foreign Sovereign Immunities Act or its legislative history and associated case law, and there are dangers in borrowing or analogizing to get one. Our country's notion of a civil service has certain characteristic features (like merit selection, well defined personnel procedures, and benefits), but we can't rightly expect foreign governments to either "mimic civil service protections now common to the United States' or "sacrific[e] the immunity conferred by FSIA.' [Cite]."
The Court then develops a five part test of whether an employee is a civil servant: "First, how do the [Defendant's] own laws define its civil service, and do [Plaintiff's] job title and duties come within that definition?" [Slip op. 5]
The Court found that, "the fact that [Plaintiff] lacked benefits common to other [Defendant's] governmental employees is sufficient for [Plaintiff] to prevail, if only slightly and in light of the burden of proof, on the first factor." [Slip op. 7]
"Second, what was the nature of [Plaintiff's] employment relationship with the [Defendant]? Did he have a true contractual arrangement, or is his "contract' claim instead based, ..., solely upon the civil service laws of the [Defendant]?" [Slip op. 5 6]
The Court decides that, "[Plaintiff] was employed in all respects pursuant to the [Defendant's] Local Employees Regulations for the UAE Missions Abroad 1983 the regulations define "local employees' as being generally "[a]dministrative employees, translators . . . mailmen, drivers, security guards, cooks, waiters, farmers, [and] maintenance' and state that local employees should almost always be nationals of the country in which the embassy is located (with exceptions for "highly exceptional' cases, like, apparently, [Plaintiff's])"
"[T]he references appear to contrast local employees and civil servants, making "civil service' a status available to local employees, if at all, only if they are also citizens of the [Defendant]. Now, it must be said that under the regulations, local employees (like civil servants in this country) may be terminated only for cause; [Plaintiff] was, under the regulations as well as according to the district court and his own testimony, a permanent employee. Nonetheless, we find the second factor tips decisively in [Plaintiff's] favor." [Slip op. 7]
"Third, what was the nature of [Plaintiff's] employment relationship when he worked in the [Defendant], and how did his subsequent employment at the Embassy relate to that prior tenure?" [Slip op. 6]
"The third question is easily answered: While [Plaintiff's] duties in Abu Dhabi were similar to his duties in Washington, there can be no question that he formally and completely terminated his employment in the [Defendant] before beginning work in the U.S. factor three favors [Plaintiff]." [Slip op. 7]
"Fourth, what was the nature of [Plaintiff's] work? As noted above, Congress indicated that the "employment or engagement of laborers, clerical staff or public relations or marketing agents' would come within the definition of commercial activity." [Slip op. 6]
"To the extent [Plaintiff] lacked authority to determine or articulate policy and lacked discretion in his duties, he is more like the employees for whom Congress intended FSIA's commercial exception, and less like a civil servant. What gives us pause is [Plaintiff's] supervisory authority over at least eight other accountants in the cultural attaché's office. He was a "part of the . . . government,' [cite] in a way an administrative assistant, for example, would not be."
"On balance, we find his lack of discretion and exclusion from any policy making role outweighs his supervisory role. Thus factor four resolves in [Plaintiff's] favor as well " though by a very narrow margin indeed." [Slip op. 8]
"Fifth, what is the relevance of [Plaintiff's] Egyptian nationality on the facts of this case? Is the [Defendant] a country in which, as the House Report assumed, non nationals are unlikely to be employed as governmental officers? Or does the [Defendant] often employ non nationals in governmental positions?" [Slip op. 6]
"The relevance of a plaintiff's nationality for the civil service inquiry becomes a matter of context. Where a country rarely if ever hires non citizens for its civil service (unlike the [Defendant]), non citizenship strongly indicates that someone is not a civil servant. And in our view, citizenship makes someone more likely to qualify as a civil servant even if a country sometimes hires non citizens as civil servants"
"Thus, were [Plaintiff] a [Defendant]. citizen, the [Defendant] might press its advantage, and were non citizens rarely if ever [Defendant's] civil servants, [Plaintiff] might press his. As it is, [Plaintiff's] nationality is all but irrelevant." [Slip op. 8]
The Circuit Court concluded that, "Multifactor tests tend to be inconclusive, but the evidence here suggests [Plaintiff] is not a civil servant and. were the inquiry totally inconclusive, that very fact, together with the [Defendant]'s burden of proof, would decide the matter in [Plaintiff]'s favor. We therefore hold that [Plaintiff] is not a civil servant and move on to the ultimate question of whether his work involved the exercise of "powers that can also be exercised by private citizens, as distinct from those powers peculiar to sovereigns.' [Cite]." [Slip op. 8 9]
"One distinctive mark of governmental work is discretionary involvement with sovereign law or policy. According to the district court ..., [Plaintiff] had no role in the creation of governmental policy, and to the extent he carried it out, his duties were "ministerial, not discretionary.' [Cite]. [Plaintiff] did standard accounting work "auditing expenditures, reviewing accounting methods, reconciling bank statements or employing auditors to conduct these activities,' [cite] of a character easily found in commercial enterprise. We therefore affirm the district court's conclusion ..." [Slip op. 9]
Citation: El Hadad v. United Arab Emirates, 2007 WL 2141943 (D.C. Cir. July 27, 2007).
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