News of Four Lawsuits in Four Months
Recently, employment lawsuits against Japanese companies operating in the United States have been reported almost every month. In March, there was Fujitec, the elevator company in Ohio; in April, Sony Entertainment in California; in May, the possibility of a class-action lawsuit against Toyota Kentucky over errors in calculating sick leave days; and in June, news emerged that Wismettac (formerly Nishimoto Trading) had been sued by the National Labor Relations Board (NLRB) for allegedly interfering with labor union formation, with the dispute eventually reaching the Supreme Court.
In Fujitec’s case, a Black employee in the legal department alleged racial discrimination by the company’s American president. At Sony Entertainment, company-wide gender discrimination involving salaries and promotions appeared likely to develop into a class-action lawsuit. In Wismettac’s case, the dispute escalated to the Supreme Court after the company lost in the Ninth Circuit Court of Appeals.
Growing Attention to DEI in the United States
Although the Me Too movement has settled down in the United States, DEI (Diversity, Equity, and Inclusion), which addresses human rights across a broader range of issues, is now attracting attention. The country as a whole appears to be moving toward creating workplaces free from discrimination.
In recruitment as well, Colorado became the first state to implement a Pay Equity Law this year, requiring companies to disclose salary ranges and benefits in job advertisements. The law aims to correct the hiring advantages enjoyed by large corporations and eliminate racial and gender discrimination.
By requiring salary ranges to be disclosed, the law was intended to help small and medium-sized companies attract qualified talent. However, it has not been well received by employers, particularly during this period of recruitment difficulties. Companies have raised concerns about being unable to offer salaries above the advertised range to attract talented candidates and about competitors increasing the upper limits of their salary ranges.
Historically, one example of efforts to address discrimination in the United States has been Affirmative Action, under which universities and other institutions gave preference to ethnic minorities in admissions. In reality, such efforts have also been expanding into the corporate sector.
When employing people with disabilities, companies with a certain number of employees are also required to provide Reasonable Accommodations.
In the United States, laws are increasingly being developed to provide fair workplaces free from discrimination for everyone. At the same time, this is leading to an increase in discrimination-related lawsuits.
Comprehensive DEI Training Is an Urgent Risk Management Priority for Japanese Companies
Generally speaking, Japanese people tend to have limited awareness of discrimination issues. Many would never imagine that simply asking about an applicant’s family situation or the length of their commute during a job interview could raise suspicions of discrimination.
Furthermore, there seems to be an assumption that hiring American senior managers and HR professionals will prevent such discrimination problems from occurring.
However, both the Fujitec and Sony Entertainment cases involved problems caused by local American management.
Unfortunately, these cases have also drawn the Japanese parent companies into the disputes, creating the possibility of judgments requiring hundreds of millions of dollars in damages.
To prevent situations like these, company-wide education and training on DEI and discrimination have become extremely important as part of risk management for Japanese companies operating in the United States.