Recent large settlements by Facebook ($14.25 million) and Apple ($25 million) with the U.S. Department of Justice’s Immigrant and Employee Rights Section (IER) sent a message to employers: the federal government can force companies to pay millions in fines even if they perfectly comply with regulatory-required recruitment steps in the Permanent Electronic Review Process (PERM) process.

At least, that was the message until earlier this month when SpaceX challenged the administrative court’s ability to legally review IER’s allegations.

The PERM process is a perplexing one for U.S. employers, who face a severe shortage of highly-skilled U.S. workers and must look to foreign talent.  Interestingly, while immigration law requires a Labor Certification that no eligible U.S. workers can fill the job, the U.S. Department of Labor (DOL) invented the exacting, precise recruitment process that has been in place for decades without any statutory requirement to do so.  In 1965, when the Labor Certification requirement was put in place, Sen. Edward Kennedy (D-MA) said, “It [is] not our intention, or that of the AFL-CIO, that all intending immigrants must undergo an employment analysis of great detail that could be time consuming and disruptive to the normal flow of immigration.”  According to Kennedy, the DOL could use statistical data available on employment and not require the individualized recruitment that the DOL eventually put in place.

And those individual recruitments, written decades ago before any modern forms of recruitment were even contemplated, were at the crux of the IER’s allegations against Facebook and Apple: There is not a hint that either company failed to comply with DOL’s PERM recruitment requirements.  But, because the company complied with the antiquated requirements they allegedly discriminated against potential U.S. applicants for the jobs.  In other words, they followed the law and they got fined massive amounts for… well, following the law. 

PERM recruitment rules are exacting, resulting in agonizing decisions over every word used to describe the position and minimum requirements for the position. The employer, which already knows the local labor market lacks the skillset, faces a costly PERM process that can easily take 18 or more months to complete before they can even file an application for a green card for their highly-skilled foreign workers. 

DOL’s process is clearly disruptive and time consuming, and in the eyes of IER, illegally discriminatory.  IER ultimately enforces violations of 8 USC §1324b (which states, ‘’[i]t is an unfair immigration-related employment practice… to discriminate against any individual (other than an unauthorized alien) … with respect to the hiring, or recruitment or referral for a fee, of the individual for employment or the discharging of the individual from employment”) before a court called the Office of the Chief Administrative Hearing Officer (OCAHO).

In response to an action brought by IER before OCAHO alleging Space X discriminated against refugees and asylees by following Byzantine-like International Traffic in Arms Regulations export control laws, SpaceX responded by filing a lawsuit in a U.S. District Court that challenged the legal authority of OCAHO to try and hear cases brought before it.  The court found that SpaceX was entitled to a preliminary injunction halting the OCAHO court action because §1324b violates the Appointment Clause of the U.S. Constitution, as OCAHO’s judges’ decisions are not subject to review by the Attorney General, among other allegations.

With the grant of this preliminary injunction, SpaceX effectively exploded IER’s ability to bring PERM-related employment discrimination cases against employers who find themselves in the same position as Facebook and Apple—following the precise PERM recruitment steps only to run afoul of the DOJ’s employment discrimination policies. 

The U.S. Supreme Court was scheduled to hear Securities and Exchange Commission v. Jarkesy, a different case that could have an impact on PERM recruitment employment discrimination allegations by IER on November 29, 2023.  This case could also have an impact on any appeal of the SpaceX outcome to the Fifth Circuit Court of Appeals and perhaps the U.S. Supreme Court.  We will be watching these cases carefully in the upcoming months.