Discrimination Accusations by DOJ Rocket SpaceX to Spotlight…Yet again

SpaceX, Elon Musk’s venture that designs, manufactures, and launches rockets and spacecraft, faces a lawsuit filed by the Department of Justice alleging discriminatory hiring practices against refugees and asylees. 

The complaint alleges SpaceX, under the guise of export laws and regulations including the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR), used discriminatory hiring practices in violation of the Immigration and Nationality Act (INA), 8 U.S.C., Chapter 12.  The DOJ asserts that the ITAR and EAR do not contain employment or hiring restrictions, require employers to limit jobs based on citizenship or immigration status, or prohibit employers from hiring refugees or asylees.

The INA was enacted in 1952 and forms the bedrock of immigration law in the U.S.  Under the INA, it is an unfair immigration-related employment practice for a person or other entity to discriminate against any individual with respect to the hiring, or recruitment of referral for a fee, of the individual for employment or the discharging of the individual from employment (A) because of such individual’s national origin, or (B) in the case of a protected individual, because of such individual’s citizenship status. 8 U.S.C. § 1324b(a)(1).  A protected individual includes an individual admitted as a refugee or who has been granted asylum.

The hiring practices alleged to have been used by SpaceX include telling job candidates that SpaceX is only able to hire U.S. citizens or lawful permanent residents due to ITAR; posting job advertisements and announcements stating that SpaceX can only hire U.S. citizens and lawful permanent residents due to ITAR; and requiring job applicants to identify if they were a U.S. citizen, a lawful permanent resident, a refugee under 8 U.S.C. 1157, or asylee under 8 U.S.C. 1158, or other.  Their hiring practices led to otherwise qualified candidates being excluded from hire due to their citizenship status.  Indeed, the DOJ noted SpaceX hired only U.S. citizens until an investigation was launched.

While the outcome of the case is in flux, this is not the first discrimination-related lawsuit against one of Musk’s companies.  Tesla, the electric vehicle maker, has faced several lawsuits, including by the California Department of Fair Employment and Housing for discriminating against black workers. DFEH Sues Tesla, Inc. for Race Discrimination and Harassment, State of California Civil Rights Department.  A black employee at Tesla’s Fremont, California plant alleged he was harassed and faced daily racial epithets – he was awarded $137 million by a jury in 2021 – which was reduced to $3.2 million in April 2023.  Aside from discrimination cases, another six lawsuits were filed alleging sexual harassment at Tesla in 2021.

The DOJ has initiated several lawsuits against large employers, including CarMax, Walmart, and KPMG, alleging discriminatory job postings and hiring practices.  In times like these, it is important for companies to ensure their hiring practices comply with state and federal law.  Reach out to Kollman & Saucier to ensure your hiring practices, policies, and procedures comply with the ever-changing legal landscape.  

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