In 1988, the U. S. Supreme Court held in Department of the Navy v. Egan that the administrative agency responsible for adjudicating civil service disputes lacked jurisdiction to review employment grievances based on the executive branch’s security clearance decisions. In 1995, the U.S. Court of Appeals for the 9th Circuit expanded Egan to prohibit judicial review of Title VII related claims in Brazil v. Department of the Navy.
The “Egan/Brazil rule” was generally understood to preclude claims implicating security clearance issues. However, in Zeinali v. Raytheon Company, an opinion filed April 4, 2011, the 9th Circuit carved out an exception to the Egan/Brazil rule, holding that courts could review such claims if the claim did not challenge the merits of the security clearance decision but instead the process by which the employer relied on it.
Raytheon Company hired Hossein Zeinali (of Iranian descent) in November 2002 for a position requiring a security clearance. Zeinali’s initial request was denied, but Raytheon retained him through the appeal process. In September 2006, the Department of Defense notified Zeinali that his request had been denied. Raytheon terminated Zeinali shortly afterwards. Although there were several factors supporting the decision to terminate Zeinali, Raytheon primarily relied on the fact that Zeinali’s job required a security clearance and he had failed to obtain one.
Zeinali filed suit under state and federal law, alleging that his termination was based on his race and national origin. He did not contest the security clearance decision. Instead, he noted that two other similarly situated employees who were not Iranian had also failed to obtain a security clearance yet they were not terminated. Raytheon moved for summary judgment relying on Egan/Brazil. The district court granted summary judgment because it concluded that Zeinali’s claims were “premised on the denial of his security clearance,” and therefore barred.
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