On August 24, 2023, the U.S. Department of Justice (DOJ) filed a complaint against Space Exploration Technologies Corporation (SpaceX) for its alleged violations of the Immigration and Nationality Act’s (INA) prohibition on citizenship-based employment discrimination. In its complaint, the DOJ stated that SpaceX discriminated against refugees and asylees, who are protected U.S. persons under both the INA and U.S. export control regulations, by discouraging them from applying for positions, giving their applications unfair consideration, and refusing to hire them even if they were deemed qualified applicants.
U.S. export control regulations, including the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR), prohibit release of certain sensitive technologies to “foreign persons” (sometimes referred to as foreign nationals) without a license, even when those foreign persons are in the United States.1 The license requirements for foreign persons, referred to as deemed export controls, vary depending on the person’s country or countries of citizenship. However, no export license is required for anyone that is a “U.S. Person.”
Under the export regulations, any person who is a “protected individual”2 as defined in the INA is a U.S. Person, and therefore not a “Foreign Person.”3 Those protected individuals include i) U.S. citizens (including dual citizens), ii) lawful permanent residents (LPRs, also known as “green card” holders), and iii) any person who has been admitted as a refugee or granted asylum. As such, there is no distinction under the EAR or ITAR for deemed export purposes between U.S. citizens, green card holders, refugees, and asylees. As noted in the complaint, “export control laws and regulations do not prohibit or restrict employers from hiring asylees and refugees; those laws treat asylees and refugees just like U.S. citizens.”4
The DOJ alleges that SpaceX “routinely discouraged asylees and refugees from applying and refused to hire or consider them, because of their citizenship status.”5 According to the complaint, SpaceX stated on social media,6 in its job postings,7 during job fairs,8 and in its recruiting efforts, that it could only hire U.S. citizens and permanent residents because of export control regulations. The complaint also states that SpaceX employees “repeatedly rejected” asylee and refugee candidates who were otherwise qualified for the position based on an inaccurate claim that refugees and asylees are “not authorized to work/ITAR ineligible” or similar reasons.9
As a result, SpaceX allegedly hired no refugees and asylees between September 2018 and September 2020 and hired only one refugee or asylee between September 2018 to May 2022.10 The DOJ’s press release notes that this discriminatory hiring was not limited to technical roles that require advanced degrees and allegedly harmed candidates applying for a variety of positions, including welders, cooks, crane operators, baristas, dishwashers, information technology specialists, software engineers, business analysts, rocket engineers, and marketing professionals. Although addressing discrimination against asylees and refugees, this comment could impact companies that have open access to technology and thus require licensing for all employees regardless of role.
This complaint is in line with the DOJ’s recent focus on reminding employers that export control laws do not justify or authorize employment discrimination, as well as a long history of settlement agreements and advisory opinions on this topic.11 Earlier this year, the DOJ entered into an agreement with General Motors (GM) to settle allegations of citizenship-based employment discrimination, under which GM agreed to pay a civil fine of $365,000 and take corrective actions.12 The DOJ has brought similar cases against numerous other companies in recent years.13 When it published the GM settlement agreement, the DOJ also issued a new fact sheet to “help employers avoid citizenship status discrimination when complying with export control laws.”
In light of these recent DOJ actions, companies should review their practices for recruiting, onboarding, and managing U.S. and foreign persons to ensure that they are in compliance with both export controls and antidiscrimination laws. Companies also should review their technology control plans and other procedures addressing deemed exports to ensure that they properly categorize asylees and refugees and satisfy export control requirements without violating antidiscrimination laws. When posting positions, companies may want to carefully consider whether any export compliance language is warranted. If you do include export compliance requirements in your recruiting and hiring processes, it is important to ensure that your human resources team and other employees involved in those processes understand the potential discrimination risks and how to avoid those risks. The DOJ has also emphasized in its new fact sheet the importance of separating the I-9 process from any export compliance assessment. These considerations also apply when making other employment decisions, such as promotion, reassignment, or firing.
[1] See 15 C.F.R. § 734.14(a)(2) and 22 C.F.R. § 120.20(a)(2) (each defining “export” to include “releasing or otherwise transferring” technical data or technology “to a foreign person in the United States (a deemed export)”).
[2] See 8 U.S.C. § 1324b(a)(3).
[3] See 15 C.F.R. § 772 and 22 C.F.R. § 120.62 (each defining “U.S. Person” to include any person who “a protected individual as defined by 8 U.S.C. 1324b(a)(3)”). In contrast, under regulations governing the Committee on Foreign Investment in the United States (CFIUS), a lack of U.S. citizenship generally (with very narrow exceptions) makes an individual a “foreign person.” See 31 C.F.R. §§ 800.224, 800.253.
[4] Complaint, ¶ 25.
[5] Justice Department Sues SpaceX for Discriminating Against Asylees and Refugees in Hiring (Aug. 24, 2023) (available at https://www.justice.gov/opa/pr/justice-department-sues-spacex-discriminating-against-asylees-and-refugees-hiring).
[6] Complaint, ¶¶ 30-33.
[7] Id. ¶ 40.
[8] Id. ¶ 41.
[9] Id. ¶¶ 44-51.
[10] Id. ¶¶ 52-53.
[11] See, e.g., U.S. Justice Dep’t Civil Rights Division, Letter to Eric S. Bord, Partner, Morgan, Lewis & Bockius LLP (May 31, 2016) (available at https://www.justice.gov/crt/file/837281/download); U.S. Justice Dep’t Civil Rights Division, Letter to Nataliya Binshteyn, Greenberg Traurig, LLP (Sept. 6, 2013) (available at https://www.justice.gov/sites/default/files/crt/legacy/2013/09/11/171.pdf).
[12] See Justice Department Secures Agreement with General Motors and Announces a New Resource to Help Employers Avoid Immigration-Related Discrimination When Complying with Export Control Laws (April 18, 2023) (available at https://www.justice.gov/opa/pr/justice-department-secures-agreement-general-motors-and-announces-new-resource-help-employers).
[13] See, e.g., Justice Department Settles Discrimination Claim Against Aerojet Rocketdyne, Inc. (May 17, 2021) (available at https://www.justice.gov/opa/pr/justice-department-settles-discrimination-claim-against-aerojet-rocketdyne-inc); Justice Department Settles Immigration-Related Discrimination Claim Against Honda Aircraft Company LLC (Feb. 1, 2019) (available at https://www.justice.gov/opa/pr/justice-department-settles-immigration-related-discrimination-claim-against-honda-aircraft).
