Israeli Court: Non-Israeli Citizens Cannot Sue Foreign Sovereigns

Carmon & Carmon is pleased to announce a recent victory in the Israeli Labor courts on behalf of the United States government. In May of 2007, an individual who worked in Israel for the U.S was separated from his employment for cause. He therefore filed in Israel a Complaint against the United States for severance pay and the balance of unpaid wages. Though the Complaint was filed before the Law for Foreign States Immunity -2008 came into action, since there had been no hearing on the matter until after the law was enacted, the Immunity Law was determined to be applicable to this case. The Immunity Law governs issues of foreign sovereign immunity in civil proceedings before Israeli courts. Though the law covers much territory in regards to when a foreign entity is eligible for immunity, there are strict limits outlined in the law. Immunity is denied when the following items are fulfilled: the cause of action is within the exclusive jurisdiction of a Regional Labor Court, the matter at hand is labor which has been or is to be performed in Israel, and when the employee is an Israeli citizen or habitual resident of Israel.

The Plaintiff claimed that the United States should be denied immunity under these points. He submitted several letters indicating his area of residence as proof. The court then asked for the opinion of Israel’s Legal Advisor to the Government (Israel’s Attorney General) and it had agreed with the plaintiff, stating that “In view of Plaintiff’s notice….that he is a resident of the Village of Nahalin west of the Israeli fence, then the Plaintiff meets the requirements of Article 4(a)(3) of the Law, and therefore the Defendant cannot be immune.”

The United States countered, insisting that it enjoys full protection under the Immunity Law. The judge presiding over the case, the Honorable Hadas Yahalom, agreed with the United States’ position, rejecting the position of the Legal Advisor to the Government and dismissed the case with costs.

This was a case of first impression in Israel. The Labor Court is open to all, including non-Israeli citizens or residents. However, Carmon & Carmon’s attorneys were able to show that the Israeli Legislature did not intend to grant access to the Labor Court in lawsuits against foreign States if the plaintiff was not either a resident or a citizen of Israel. As an appeal was not filed, the U.S victory became final.

A Jerusalem Court: A Court Cannot Order a Foreign State to Reinstate a Former Employee

In September of 2010, the Honorable Judge Daniel Goldberg of the Regional Labor Court in Jerusalem rendered a partial judgment in favor of the United States, represented by Carmon & Carmon.

An individual was separated from his employment at the U.S Consulate General in Jerusalem for cause. He then filed a complaint against the U.S government stating that the U.S government owed back wages, compensation for unlawful separation, and severance payment. Under Israeli law, unlawfully withholding wages and severance payment could result in a court order imposing the defendant with a 515% a year punitive interest. The circumstances of the separation laid out in the case are fairly cut and dry. The Plaintiff was hired by the US Consulate as a vehicle mechanic in 2003. As for all government jobs, he was required to disclose any previous arrests during the application and employment process. The Plaintiff said that he had none. In 2006, he was arrested by Israeli police and it came to the attention of his employer that he had lied during the application process. When presented with the information, the Plaintiff admitted to having covered up a previous arrest during the hiring process. Because of this, the Plaintiff’s security clearance was cancelled and the US Consulate terminated his employment.

The U.S filed a motion to dismiss the Complaint on several grounds. First was that it enjoyed sovereign immunity from the Plaintiff’s demand to be reinstated at his job, have the separation revoked and to be awarded punitive interest on unpaid severance payments. Second, the U.S argued that the Israeli courts had no jurisdiction in terms of the demand for reinstatement because the separation was an act of the U.S Government and was related to security concerns. Third, the U.S argued that the punitive interest is a quasi punitive sanction, and rules of customary international law state that a court cannot impose foreign sovereigns with punitive or quasi punitive sanctions.

The Plaintiff countered these arguments, saying that foreign sovereign immunity is limited to governmental acts. He stated that his employment was not a governmental act but a commercial act, from which the U.S is not immune. Regarding the punitive interest, the Plaintiff argued that “granting punitive interest is considered to be a private act from which there is no immunity or a governmental act that is immune.”

After reviewing all of the information, the Honorable Judge Goldberg rendered a partial decision that the Plaintiff did not lift the burden of proof that his employment was a private act. Also, there is a special legal system applicable to employees of posts of the U.S Government, which gives the employment a governmental aspect. “The determination of a security classification of an employee of the United States government is a quintessential governmental matter of the United States government. Therefore, the United States government is immune from the jurisdiction of a court outside the United States.” Punitive interest was denied based on the Defendant’s argument of its penal nature. The Plaintiff’s demands for revocation of his separation and punitive interest were denied.

    "Many thanks for your outstanding work. The U.S. Government is fortunate to be able to call upon your expertise and assistance."

- United States Ambassador to Israel
    "Haggai deftly handled all of the arguments [in court], and was clearly in command from the beginning. The difference in quality between our lawyer and the plaintiff’s was stark. It was like watching an excited Chihuahua yap at a seasoned Great Dane – the Chihuahua can make all the noise it wants, but the Great Dane clearly calls the shots. I wanted to emphasize how fortunate we were to have Haggai on our side today."

- A memo from a senior US diplomat to the US Department of Justice