Elon Musk’s Space X Test Limits of US Law - Who Can You Hire?

International trade law can dictate who your company can hire, advertise to hire, and terminate. Elon Musk’s SpaceX was recently sued by the US Department of Justice (DOJ) for alleged discrimination regarding non-US persons, refugees, and asylees.

SpaceX argued that it is illegal for it to hire individuals who are not lawful permanent residents (green card holders) or US citizens due to export compliance requirements found in the US International Traffic in Arms Regulations (ITAR) and the US Export Administration Regulations (EAR).

Musk tweeted (or X’d as it is now known), “US law requires at least a green card to be hired at SpaceX, as rockets are considered advanced weapons technology.” The DOJ says, NOPE, not correct. SpaceX was sued by the DOJ on August 23, 2024, to resolve this issue.

From an international law perspective, SpaceX argues that it is involved in company activity that precludes “visual access” to its technology to anyone who is not a US citizen or US permanent resident (green card holder) because under various US trade regulations such access would be considered a violation of the ITAR, the EAR or both.

Under US trade “deemed export” regulations, visual access to technology by a foreign national in the US is the same as exporting that technology to the home country of the foreign national. If SpaceX allows such access and the trade classification for the technology prohibits export of it to certain countries, then foreign nationals from those countries cannot be hired by SpaceX.

It’s as if you’re hiring a country, not a person, for deemed export purposes. If your technology cannot be exported from the US to that country, you cannot allow access to that controlled technology, e.g., hire a foreign national from that country.

ARE REFUGEES AND ASYLEES PROTECTED AS US CITIZENS

Asylees and refugees are migrants to the US who have fled their home countries due to a well-founded fear of persecution. Once they are granted asylee or refugee status by the US government, they have indefinite permission to live and work in the US. See 8 USC 1158 and following. Lawful permanent residents also have permission to live and work in the US, permanently. See 8 USC 1101 and following.

Various laws clearly indicate that US citizens and nationals, asylees, refugees, and certain lawful permanent residents, including those perceived to hold this status, are protected from discrimination in hiring based on citizenship status. An employer cannot advertise or hire in a way to deter applicants or to refuse to consider or reject them from employment based on their citizenship. 

THE ANALYSIS FROM AN INTERNATIONAL TRADE PERSPECTIVE

1. What is the export classification of the technology to be viewed by the foreign national considering the ITAR and EAR? If that classification allows export to the foreign national’s home country, then, subject to number 3 below, there is no export law violation to allow that person access to it in the US.
2. Treat US citizens, nationals, asylees, refugees, and most lawful permanent residents as protected from hiring discrimination based on citizenship status.
3. Be aware of all US export regulations that might prohibit the hiring of a person no matter what their status, particularly the US “prohibited” lists which name persons and entities that your company cannot hire or transact business.

CONCLUSION

Musk and SpaceX appear to have deep pockets providing the ability to fight complicated and protracted litigation against the US Government. Does your company? In most cases, the answer is “no”. So, determine your technology and product’s ECCN (the US export classification). Avoid deemed export issues and, considering this blog, for the most part, treat US citizens, asylees, refugees, and most permanent residents as protected from hiring discrimination.