DOJ Shouldn't Discourage Hiring Restrictions Meant to Protect US Tech, Lawmaker Says

The U.S. shouldn’t be targeting American companies that exclude foreign applicants for job openings if those policies are meant to protect American sensitive technologies, Sen. J.D. Vance, R-Ohio, said in a letter to DOJ. Vance’s letter came after DOJ in recent enforcement actions targeted both SpaceX and General Motors for using export control laws to justify restrictive hiring practices, highlighting the risks facing companies looking to fill positions that involve export-controlled items, Barnes & Thornburg said in a recent client alert.

DOJ sued SpaceX last month after it said the company used U.S. defense export control laws to discourage asylees and refugees from applying for jobs that SpaceX said could be given only to U.S. citizens and legal permanent residents (see 2308250041). The suit came about four months after the agency announced a $365,000 settlement with GM over claims the carmaker -- in an attempt to comply with U.S. export control laws -- discriminated against non-U.S. citizens in violation of the Immigration and Nationality Act (see 2304180078).

Vance said DOJ’s lawsuit against SpaceX has “questionable” legal merit and may be politically motivated. He noted that after SpaceX learned that DOJ didn’t share its “interpretation” of the International Traffic in Arms Regulations, the company changed its hiring practices and hired at least one asylee.

There “does not appear to be a moral or political case for choosing to proceed with a lawsuit under these circumstances,” Vance said, adding the company was likely trying to “satisfy what SpaceX perceived to be its legal obligations. If that belief was informed by advice of counsel, as it likely was, what value does the DOJ perceive in further extracting a pound of flesh from a company that was seeking in good faith to balance competing legal duties?”

Barnes & Thornburg stressed that refugees and asylees are authorized to view certain export-controlled items on “equal footing with U.S. citizens and permanent residents.” It also said DOJ is increasingly targeting companies that post job applications that discriminate against refugees. To avoid scrutiny, companies should avoid combining their export licensing assessment with the Form I-9 process, which is used to verify the identity and employment authorization of people hired for work in the U.S.

U.S. firms should also “make it clear,” including when discussing export control requirements with job candidates, that U.S. persons eligible for the job include more than U.S. citizens, and the companies shouldn’t use the International Traffic in Arms Regulations or the Export Administration Regulations as a reason to limit jobs to candidates with certain citizenship, immigration status or national origin.

“Do ensure that the people who handle hiring and onboarding processes receive training to prevent discrimination based on citizenship, immigration status, and national origin,” the firm said. Companies should also avoid conducting export licensing assessments for potential employees who won’t work with export-controlled items. However, firms should still perform export licensing assessments for all candidates whose work may involve export-controlled items, the law firm said, and those candidates should be informed “of the purpose of the assessment.”

Vance suggested the government’s own job postings contradict that export control guidance and its lawsuit against SpaceX. DOJ has open job applications that require proof of U.S. citizenship even though the jobs’ duties are “a far cry from any national security function,” he said, adding that a “simple internet search reveals a host of other federal government and contractor jobs that require applicants to prove American citizenship, as they should.”

It “makes sense that companies responsible for developing and maintaining new technologies with clear military applications should be citizens or permanent residents invested in the fortunes of the United States,” Vance said. “The DOJ should not discourage hiring practices that can shield sensitive intellectual property from theft by foreign actors.”

Vance also said DOJ’s lawsuit may be politically motivated, pointing to President Joe Biden’s criticisms of Twitter under the control of Elon Musk, who also owns SpaceX. The lawmaker asked DOJ to provide information on whether it has investigated other aerospace companies or government contractors for similar hiring practices and whether the agency believes that “favoring American citizens for jobs constitutes discrimination against noncitizens.” He also asked whether DOJ ever told SpaceX that it may be out of compliance with federal hiring laws and whether DOJ investigation was “initiated in response” to Musk’s acquisition of Twitter.

A DOJ spokesperson declined to comment.