How to Avoid Immigration-Related Discrimination When Complying with U.S. Export Control Laws in Hiring and Employment Verification

U.S. employers may find it confusing that hiring for certain roles can involve what seem to be competing compliance obligations.

On one hand, the Immigration and Nationality Act makes it illegal for employers to make hiring or recruiting decisions based on an applicant’s citizenship, immigration status or national origin. Among other things, it also bars companies from treating workers differently based on these characteristics in verifying their eligibility to work.

On the other hand, U.S. export control laws and regulations restrict an employer’s ability to release certain technical information and source code without U.S. government authorization to some people who are not U.S. citizens, lawful permanent residents, refugees or asylees.

The Department of Justice recently provided guidance to help employers avoid discrimination in hiring and employment verification when complying with U.S. export controls, including the International Traffic in Arms Regulations and the Export Administration Regulations.

Here’s what companies should consider doing in light of the DOJ guidance – and some suggestions on how to do it.

Keep export compliance assessments separate from identity verification and employment authorization

Here are five things companies can do to keep export compliance separate from the I-9 process used to verify someone’s identity and authorization to work:

1. Perform an export compliance assessment only for workers who need access to export-controlled information or source code.
2. Tell workers who require access to export-controlled information or source code that you are verifying citizenship or immigration status to determine if export authorization is necessary.
3. Maintain separate workstreams for the Form I-9 process and export compliance assessment, even if workers need to show the same document for each workstream.
   • Make clear in company policies and trainings that export compliance assessment and I-9 process are separate.
   • Do not write notes related to a worker’s status for export-compliance purposes on documents received in the work verification process.
4. Store documents and other records from the export compliance assessment separately from I-9 forms and attachments.
5. Train employees who handle hiring and onboarding on discrimination based on citizenship, immigration status and national origin.

Comply with Discrimination Laws in Recruiting and Hiring for Roles Subject to Export Controls

Here is a framework for companies to use at each stage of hiring to comply with Title VII of the Civil Rights Act and other anti-discrimination laws while hiring top talent:

Before Recruiting

• Understand that U.S. export controls define “U.S. persons” as U.S. citizens, lawful permanent residents, refugees and asylees. Don’t assume someone is not a “U.S. person” just because they are not a U.S. citizen.
• Determine whether a position will involve access to export-controlled information or source code. (If it does, you may need an export license for certain non-U.S. persons.)
  • If an export license would be required:
    • Assess the nature and level of control at issue.
    • Try to determine if the U.S. government is likely to issue a license within the time constraints the company faces given its need to fill the position. Use good faith, thoughtful and non-discriminatory judgment in the assessment.
    • If a company concludes that it is unlikely to obtain an export license in a timely manner, document the relevant facts and unfeasibility before recruiting. This will support the position that the company had proper, nondiscriminatory reasons for not hiring a specific candidate.

Recruiting

If a company seeks an export license for a position:

• Do consider letting applicants know that the position involves access to information or source code that is restricted under U.S. export controls. Mention that any job offer would be contingent on the company obtaining an export license in a given timeframe based on a legitimate business need.
• Don’t limit applicants to U.S. citizens or lawful permanent residents.

If the company determines that it is unable to seek an export license for a position given time constraints or other legitimate business reasons:

• Do state the following on postings and applications: “This position involves access to technology that is subject to U.S. export controls. Any job offer made will be contingent upon the applicant’s capacity to serve in compliance with U.S. export controls.”
• Don’t tell candidates the company does not hire foreign nationals.

Under the recent DOJ guidance, employers can ask an applicant whether they are a U.S. person, but only to determine if the company will need to seek an export license.

• Do be cautious about making such inquiries – the mere appearance of selective or discriminatory hiring can generate complaints and scrutiny.
• Do be aware that certain state or local laws may pose additional limitations in making inquiries at the pre-offer stage. For example, in California, don’t ask applicants about their citizenship prior to a conditional offer of employment, unless clear and convincing evidence makes the questions necessary to comply with U.S. immigration law.  Otherwise, you risk violating regulations that prohibit questions about immigration status.
• Do consider waiting until after a conditional offer is made before conducting an export license screening. That should reduce the risk of a potential discrimination claim or the appearance of selective or discriminatory hiring. In addition, moving the pertinent questions to later in the recruitment process should reduce the potential for the assertion of class action discrimination claims since fewer individuals would be subject to an export control compliance assessment.
• Don’t use citizenship inquiries in a potentially discriminatory fashion by, for example, favoring candidates from certain countries, even though the licensing requirements for the countries are similar. And don’t base hiring decisions on assumptions, such as choosing not to hire someone because a license might be required at some point, as opposed to knowing a license will be required for the position into which the candidate would be hired.

Two more best practices in the recruiting stage:

• Don’t limit roles to candidates with a certain citizenship or immigration status.
• Don’t state in job advertisements or tell applicants that U.S. export controls require applicants to have a specific citizenship, immigration status or national origin.

Offer Stage

• Clearly communicate in the offer letter that employment is contingent on the company obtaining an export license within a specific timeframe, if applicable.
• If the offer is for a position the company has determined can’t await on an export license due to legitimate business needs, clearly communicate to the candidate that the offer is contingent on the company not needing an export license.  
• Once a company makes a conditional offer, it may ask about citizenship/nationality to determine if it needs to seek an export license.
• If a candidate’s answers indicate the company would need to seek an export license, and the company has determined that legitimate business needs would prevent it from obtaining a license in time to meet business needs, the company may rescind the offer.
• If the company rescinds the offer, the communication to the candidate should clearly convey that:
  • The position requires an export license.
  • The company is unable to obtain the export license prior to the necessary start date due to legitimate business needs.
  • The company has no other position the candidate could fill while the company seeks an export license.

While hiring within legal compliance frameworks can seem challenging, the Orrick team can help your company successfully navigate the entire process. Contact one of the authors to learn more.