When can an employer use the “national security exception” under U.S. anti-discrimination law to make a hiring decision based on the national origin of the candidate? An often overlooked area of compliance is how to comply with anti-discrimination law when the job will include access to export-controlled data.

You Don’t Have To Be A Defense Contractor To Be Subject To Export Controls

Even if you are not a defense contractor, don’t turn away just yet. Many companies outside the defense sector are required to obtain export licenses just to allow non-U.S. employees to work on certain projects with export-controlled technology. Companies in the aviation, automated driving, semiconductors, computing, and encryption sectors all may face these issues. Even if your company happens to have all U.S. employees, the company might require an export license to send certain information, such as specifications or technical drawings, abroad. And all companies are simultaneously required to comply with Title VII of the Civil Rights Act, which (among other things) prohibit discrimination on the basis of national origin.

There Are A Lot of Banana Peels In This Area

This compliance area is where many large, sophisticated, international companies (and even major law firms!) still miss the mark. The tension between complying with anti-discrimination law while properly screening job candidates and employees in order to not commit unauthorized exports is difficult to navigate. Add in limited resources, the need for quick hiring, and it can often be a recipe for compliance disasters.

Until recently, the Department of Justice (DOJ) has not provided much guidance on this area forcing companies to navigate the letter of the law with all its ambiguities. Moreover, when companies do get this wrong, the DOJ is quick to name, shame, and fine companies with a public article describing the companies’ practices as discriminatory and imposing a more than nominal fine.

New Guidance From DOJ

However, in April 2023, the DOJ published new guidance on this complex area in its publication entitled How to Avoid Immigration-Related Discrimination when Complying with U.S. Export Control Laws. While these best practices do not ensure compliance with the law, if your hiring department can follow these points, it is likely to reduce some of the risk inherent in hiring practices and export controls.

Timing Is Everything

The guidance emphasizes that DOJ is very concerned about companies that may intentionally or inadvertently screen out applicants that would otherwise qualify for the job position and could obtain the applicable export control license. In fact, DOJ expects that employers allow reasonable time to obtain an export license for a non-U.S. person if walling them off from controlled technology is feasible.

I-9 Versus Export Control Analysis

DOJ also does not want an employer to ask an individual to complete an I-9 until the job offer has been made. However, with export controls, an employer will need to determine whether the applicant requires an export control license, and if so, whether it is feasible to obtain that license. This is typically done before a job offer is made. An I-9 is solely about work authorization and has nothing to do with export control compliance.

DOJ Recommended Anti-Discrimination Practices When Complying with Export Controls

1. Job Advertisements: Don’t state in job advertisements or otherwise tell job applicants that export control regulations require applicants to have a specific citizenship, immigration status, or national origin.

2. Prematurely Limiting Applicants: Don’t use the ITAR or the EAR as a reason to limit jobs to candidates with certain citizenships, immigration statuses, or national origins (for example, don’t limit jobs to U.S. citizens because the job involves accessing export-controlled items).

3. U.S. Persons. When discussing export control requirements with job candidates and current employees, make clear that U.S. persons* include more than U.S. citizens. *U.S. persons includes U.S. citizens, U.S. nationals, lawful permanent residents, refugees, and asylees.

4. Only When Export Control Items (Including Technology) Involved: Only do an export compliance assessment for those workers whose positions require working with export-controlled items.

5. Explain The Need For Documentation: If you ask workers whose positions require working with export controlled items to provide documentation of their citizenship or immigration status, let them know you are doing so to determine if export authorization is required.

6. Separate From I-9 Process. Separate export compliance assessment from the Form I-9 process. Workers may decide to show the same documentation for each process, but separating the processes avoids a worker believing they are being asked to prove their citizenship or immigration status for the Form I-9 process.

7. I-9 Documents. Don’t require workers to present Form I-9 documents that prove their U.S. citizenship, specific immigration status, or show that they fall within the categories of workers who are U.S. persons for export control purposes. Instead, allow workers to choose valid documentation to present from the Lists of Acceptable Documents.

8. Notes on I-9. Don’t mark the Form I-9 with notes or other information related to export control requirements.

9. Separate Export Control Documents. If you copy documents as part of export compliance assessment, store them separately from Forms I-9 and any I-9 attachment. If an employer attaches or stores export compliance assessment documents with the Form I-9, it may appear that the employer asked workers for specific or more documentation, or limited their choice of documentation, during the Form I-9 process.

10. Training. Make sure that the people who handle hiring and onboarding processes receive training on discrimination based on citizenship, immigration status, and national origin.

11. Policies. Clearly explain in any applicable policies and trainings that the Form I-9 process is separate from export compliance assessment, and each has different procedures, purposes, and requirements.

As we have detailed in previous blog articles, there are many pitfalls to avoid in hiring when your company operates with export controlled goods, software, or technology. This is a slippery slope where it is important to obtain experienced counsel for training, prevention, and other compliance advice. DOJ is quick to name, shame, and fine companies that do not comply, and DOJ is known to hold companies strictly liable for these errors.