Unreported / Non-Citable
Background
Hakim Gulaid alleges he worked for Defendant Fluor Corporation on Ascension Island, a remote British Overseas Territory in the South Atlantic Ocean, from June 2021 to June 2022. His Second Amended Complaint asserted three claims under 42 U.S.C. § 1981—race discrimination, hostile work environment, and retaliation—and one claim under the Fair Labor Standards Act for unpaid wages. Fluor moved to dismiss the SAC under Docket Number 25, and the court found the motion appropriate for determination without oral argument under Civil Local Rule 7-1(b).
The Section 1981 claims rested on allegations that the discriminatory and retaliatory conduct occurred while Gulaid was living and working on Ascension Island. Gulaid argued that because he was hired in the United States and aspects of his employment, such as pay, were administered domestically, the statute should apply. The FLSA claim concerned alleged unpaid hours, but the timeline was complicated: Gulaid's original complaint filed September 16, 2025 included an FLSA claim, his first amended complaint removed it, and his second amended complaint filed June 16, 2026 re-asserted it.
The Court’s Holding
The court applied the two-step extraterritoriality framework from RJR Nabisco, Inc. v. European Community, 579 U.S. 325 (2016), which asks first whether the statute gives a clear, affirmative indication that it applies extraterritorially, and second whether the case involves a domestic application of the statute. At step one, the court found that Section 1981's text—guaranteeing rights to "[a]ll persons within the jurisdiction of the United States"—contains no such indication. The court relied on the Second Circuit's decision in Ofori-Tenkorang v. American International Group, Inc., 460 F.3d 296 (2d Cir. 2006), which held that Section 1981's plain language confirms it does not apply beyond U.S. borders, and on a prior decision in this district, Gulaid v. CH2M Hill, Inc., which concluded that Section 1981 does not extend extraterritorially, not even to U.S. military bases overseas.
At step two, the court concluded that Gulaid's allegations did not establish a permissible domestic application because the misconduct he described occurred on Ascension Island, not in the United States. The court rejected Gulaid's argument that being hired in the U.S. and having pay administered domestically sufficed, noting that many of these contacts were supported by exhibits outside the pleadings that could not be considered on a motion to dismiss, and that such generic corporate contacts are not relevant to Section 1981's focus. Citing Nestle USA, Inc. v. Doe, 593 U.S. 628 (2021), the court emphasized that general corporate activity common to most corporations does not draw a sufficient connection between a cause of action and domestic conduct. The court therefore dismissed Claims One, Two, and Three.
On the FLSA claim, the court found it time-barred. FLSA claims carry a two-year statute of limitations, extended to three years for willful violations under 29 U.S.C. § 255(a). Gulaid's employment ended June 23, 2022, and he filed his original complaint September 16, 2025—three years and three months later. Even assuming the claim related back to the first pleading and that the longer three-year period applied, the claim was untimely on the face of the complaint, which contained no tolling allegations. The court dismissed Claim Four and reserved ruling on whether to grant leave to amend, directing Gulaid to file a statement describing intended amendments by November 25, 2026, not to exceed five pages.
Key Takeaways
- Section 1981 does not apply extraterritorially; its text limits protections to persons within U.S. jurisdiction and lacks clear indication of extraterritorial reach under RJR Nabisco.
- U.S. hiring and domestic pay administration are generic corporate contacts that do not establish a domestic application when the alleged discrimination occurred entirely abroad.
- Exhibits outside the pleadings cannot be considered on a motion to dismiss, so domestic contacts supported only by such materials carry no weight.
- An FLSA claim accrues at each payday, and a suit filed more than three years after employment ended is untimely absent tolling allegations, even if it relates back.
- The court reserved ruling on leave to amend and required a five-page statement describing intended amendments by November 25, 2026.
Why It Matters
This order reinforces the consensus that Section 1981 does not reach conduct outside the United States, even for American companies employing workers on overseas sites. By applying the RJR Nabisco framework and citing both Second Circuit authority and a prior decision involving the same plaintiff, the court provides a clear roadmap for extraterritoriality challenges in overseas employment cases.
The decision also illustrates the FLSA's statute-of-limitations pitfalls and the limits of relation-back doctrine. Even with the longer willful-violation period, a delay exceeding three years after employment ends dooms an FLSA claim absent specific tolling allegations.