The Department of Justice recently announced that it has sued SpaceX for violating the Immigration and Nationality Act (INA) by not advertising that positions can be filled by people who have “self-identified” themselves as asylees and refugees. Those with any knowledge of the aerospace industry might scratch their heads because the International Trafficking in Arms Regulations (ITAR) imposes harsh criminal penalties for even talking to foreigners about rockets, let alone hiring them.

Most aerospace companies hate ITAR and would gladly hire qualified foreign nationals if they could. I’ve helped clients navigate ITAR and requested many Technical Assistance Agreements (TAA) through the State Department to hire foreign workers. This is not a case of discrimination but the confluence of two federal laws that run in opposite directions with this one bizarre intersection.

That’s because those who have been granted asylee or refugee status are considered “U.S. persons” under INA and ITAR even though they are neither U.S. citizens nor permanent residents with green cards. Crazy as it might sound from a national security standpoint, that’s what the law says. ITAR doesn’t count as an exemption “required in order to comply with law, regulation, or executive order.” 

According to DOJ, ITAR’s prohibitions on hiring foreigners don’t apply to asylees and refugees. Moreover, the DOJ complaint states that SpaceX advertised for “U.S. citizens or lawful permanent residents” but omitted the language “or asylees or refugees.” What others might consider a “foot fault” is now officially a federal case.

Complicating the issue, an April 2023 guidance from the DOJ states as “best practice” that employers may not ask applicants to demonstrate their ability to be hired under ITAR during the hiring process. Indeed, the guidance suggests that companies should keep information concerning ITAR compliance in a separate file from the Form I-9 process by which all employers must determine whether an applicant is qualified to work in the United States.

This bifurcation of the hiring process puts aerospace companies in a pickle. Because of ITAR, most have adopted technology export control plans that restrict access to their facilities for any non-U.S. person — everyone has to demonstrate U.S. person status to set foot in the building. Given this, how can aerospace companies conduct in-person interviews if they can’t ask for proof that the applicant is a U.S. person?

But it gets worse. The complaint also claims SpaceX passed over applicants who “self-identified” as asylees or refugees. What does “self-identified” even mean in this context? Clearly, a company can’t comply with ITAR by merely accepting the undocumented status claim; a company has to ask for proof. And that’s where things get even weirder. 

According to informal guidance from the DOJ, proof of asylum status can take many forms, including an immigration hearing order, a Form I-94 with “the proper stamps and codes,” or other unnamed proof. Refugee status can be even more challenging to document, as it can be conferred in other countries and via documentation that is not even in English. The only good news in all this (at least under current policies) is that those who are awaiting their asylum hearings (currently backlogged at close to a million cases) are not considered to have been “granted” asylum.

In a properly functioning government, the DOJ and the State Department (which enforces ITAR) would design a workable process that doesn’t expose aerospace companies to hundreds of thousands of dollars in fines if they can’t thread the needle between these two laws. But SpaceX and DOJ appear to be hunkered down for serious litigation, and given that this will be tried in DOJ’s own Executive Office of Immigration Review Office of Chief Administrative Hearing Officer (OCAHO), the process itself may be the punishment, as often happens with administrative agencies.

It’s one thing to fine Hooters or janitorial companies for not hiring asylees or refugees. Still, given the complex interplay between INA and ITAR and the national security issues at stake, this case seems ripe for a settlement that includes more straightforward guidance to the aerospace industry, and recognition of the vital national security issues at stake. One can only hope.