## Facts

- Pico Korea, Ltd., a South Korean manufacturer of electronic components, operated as an indirect subsidiary of Pico Products, Inc., a New York corporation, through an intermediate U.S. parent.
- Most of Pico Korea’s production was sold to the U.S. affiliate, and the affiliate provided financing when Pico Korea faced cash-flow problems.
- In 1988, Pico Korea’s workers formed a labor union, and the union and Pico Korea executed a collective bargaining agreement (CBA) on November 15, 1988.
- In 1989, Pico Products decided to stop providing financial support to Pico Korea, leading to the shutdown of operations and termination of the workers’ employment.
- The union and its officers sued Pico Products and its CEO, alleging breach of the CBA and tortious interference with contractual rights.
- The district court rejected LMRA § 301 federal-question jurisdiction as to the Korean CBA, proceeded under diversity jurisdiction applying New York law, and entered judgment for defendants, finding no basis to disregard corporate separateness and no tortious interference.

## Issues

1. Whether LMRA § 301, 29 U.S.C. § 185, applies to a CBA between a foreign union and a foreign employer covering employment performed entirely abroad, such that federal jurisdiction and federal labor-law remedies are available.
2. Whether statutory language allowing § 301 suits “without regard to the citizenship of the parties” indicates congressional intent for extraterritorial application.
3. Whether, absent § 301, the plaintiffs could impose liability on the U.S. parent and its executive under state-law theories despite corporate separateness and asserted business justification.

## Decision

- The Second Circuit affirmed judgment for defendants.
- The court held that LMRA § 301 does not apply extraterritorially to a foreign CBA between foreign employees and their foreign employer, and thus does not confer federal-question jurisdiction.
- The court rejected the argument that “without regard to the citizenship of the parties” expands § 301’s geographic scope; it treated the phrase as jurisdictional, not a clear statement of extraterritorial reach.
- With § 301 unavailable, federal labor law could not be used to impose CBA liability on the U.S. parent based on ownership and commercial effects.
- The court left undisturbed the district court’s state-law rulings for defendants, including findings that corporate veil-piercing was not supported and that the funding decision was a justified business decision not amounting to tortious interference.

## Legal Principles

- Federal statutes are presumed not to apply extraterritorially absent a clear congressional statement.
- LMRA § 301 is territorially limited and does not extend to CBAs negotiated and performed abroad between foreign unions and foreign employers, even if the foreign employer is owned by a U.S. corporation and its operations affect U.S. commerce.
- The phrase “without regard to the citizenship of the parties” in § 301 addresses access to federal court for covered disputes and does not, by itself, authorize regulation of foreign labor relations.
- Comity concerns weigh against applying U.S. labor law to disputes centered in a foreign country and governed by that country’s labor regime.

## Conclusion

The Second Circuit held that LMRA § 301 does not provide federal jurisdiction or federal labor-law remedies for a Korean union’s claims arising from a Korean CBA performed in South Korea, notwithstanding indirect U.S. parent ownership and commerce effects, and it affirmed judgment for defendants on the remaining state-law theories.


Labor Union of Pico Korea, Ltd. v. Pico Prods., Inc., 968 F.2d 191 (2d Cir. 1992), cert. denied, 506 U.S. 985 (1992)