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The US Department of Justice (DoJ) is investigating practices at SpaceX after a job applicant said he was discriminated against because of his citizenship status.
Elon Musk’s aerospace company has refused to comply with a subpoena asking for documentation related to its hiring procedures, saying authorities have given only “the flimsiest of justifications.”
Although the initial complaint was filed by a job applicant, officials have since expanded the case to look at SpaceX’s wider hiring practices.
Judge Michael Wilner is expected to hold a hearing on SpaceX’s attempts to block the subpoena on March 18.
CNBC first reported on the filings.
A complaint from a job applicant started the investigation
The Office of Immigrant and Employee Rights (IER), a division of the DoJ, began its investigations in June after receiving a complaint of citizenship status-based discrimination from job applicant Fabian Hutter the previous month.
Hutter was interviewed for the position of technology strategy associate at SpaceX’s internet project Starlink in March. His resume said he holds dual citizenship in Austria and Canada but is a lawful permanent US resident.
His complaint alleged that SpaceX asked Hutter about his citizenship status “and ultimately failed to hire him for the position because he is not a US citizen or lawful permanent resident,” per a court document filed by DoJ attorney Lisa Sandoval on January 28. Hutter told CNBC that he wasn’t asked technical questions during his interview, and the company didn’t look at these coding examples.
Under US International Traffic in Arms Regulations, non-US citizens can work for SpaceX if they have a green card, CNBC reported.
In a court filing, SpaceX called the case “facially nonsensical” and said the interviewer was “unimpressed” by Hutter’s responses.
SpaceX also said it knew about Hutter’s citizenship before offering him the interview because it was on his resume, and claimed he was among just seven people of more than 450 applicants who progressed to the technical interview stage in the hiring process. SpaceX ultimately decided not to hire anyone for the role, it added.
The DoJ launched its investigation in June
IER notified SpaceX on June 8 that it had opened an investigation, noting the scope of it wasn’t limited to the specific complaint filed by the job candidate. It told SpaceX it would explore whether the company engages in any broader pattern or practice of discrimination.
As part of its investigation, IER requested documentation from SpaceX related to its hiring processes. This included a spreadsheet with all available Form I-9 data collected by the company since June 1, 2019, and “copies of any supporting documentation, and all attachments.”
As part of a Form I-9, which is filled in when a new hire starts, the employee has to identify their citizenship status. The employer must certify that they viewed original documentation proving this.
This is “highly relevant” to the investigation, Sandoval wrote in the filing, “because [the Form I-9 documents] demonstrate, among other things, the extent to which SpaceX hires non-US citizens and may reveal whether or not it is engaging in a pattern of not hiring them due to their citizenship status.”
SpaceX refused to comply with a subpoena
After IER gave it multiple extensions beyond its initial deadline of June 22, SpaceX finally shared the information provided on the Form I-9 documents in August, but refused to produce any supporting documentation, such as copies of employees’ passports, driver’s licenses, or Social Security cards, which IER had requested, the DoJ’s filing says.
SpaceX said complying with this would be “unduly burdensome” and would involve submitting documents from more than 3,500 employees “from barista to rocket scientist.”
The DoJ’s Sandoval described the missing information as “critical,” saying it would also help IER identify other potential victims of citizenship status discrimination.
“Indeed, it is hard to imagine information more relevant to an unfair documentary practices investigation (which typically involves an employer asking new hires for more documents than necessary to complete the Form I-9 due to their citizenship status) than the Form I-9 supporting documentation of recent hires,” she added.
From when SpaceX provided the Form I-9 spreadsheet in August until early October, IER repeatedly contacted SpaceX asking for the supporting evidence, but the company refused to provide it, the filing says.
IER then obtained a subpoena from the Office of the Chief Administrative Hearing Officer (OCAHO), asking SpaceX to send the relevant documents by October 22.
In a meeting with IER just two days before the deadline, SpaceX still refused to send the documents, even after IER offered a further deadline extension, per the filing.
SpaceX then filed a petition on October 26, asking OCAHO to modify or revoke the subpoena, arguing that it exceeds the scope of IER’s authority, is insufficiently definite, and is not relevant to IER’s investigation, according to Sandoval’s filing. SpaceX also said that collecting the information would be “unduly burdensome” because the way it stores these documents means it would have to manually retrieve each one.
OCAHO denied the request in December, saying the investigation is within IER’s statutory authority and the subpoena is not too indefinite, as well as reasonably and directly relevant to IER’s investigation.
OCAHO also rejected SpaceX’s claim that the subpoena was too burdensome, saying the company failed to prove that complying with the subpoena would disrupt its normal business operations. “Any burden imposed by a subpoena on an employer due to its poor record keeping is of its own making,” Sandoval added.
OCAHO then ordered SpaceX to comply with the subpoena within 14 days and authorized IER to seek enforcement of the subpoena in the appropriate district court if SpaceX did not comply.
SpaceX has not complied, the DoJ’s filing alleges, and told IER that it “does not intend to produce any additional information in response to the administrative subpoena.”
In January, IER asked the US district court for the central district of California in Los Angeles to require SpaceX to comply with the subpoena within two weeks. Judge Michael Wilner is expected to hold a hearing on March 18.
SpaceX has asked the court to block the subpoena. In a filing submitted by SpaceX in late February, the company said it had already spent more than 1,000 hours complying with IER’s requests and submitted “thousands of pages” of documents.
It said that it had “no quarrel” with IER investigating Hutter’s allegations, but said it “draws the line at IER’s overreaching attempt to bootstrap that lone, frivolous charge into the wide-ranging (and expanding) pattern-or-practice investigations the agency is now pursuing.”
IER has failed to provide legitimate reasoning behind the wider investigated and has given only “the flimsiest of justifications,” it added.
“Neither the statutory and regulatory authority IER relies on, nor the Fourth Amendment to the US constitution, permits IER to rifle through SpaceX’s papers on a whim and absent reasonable justification,” it wrote in the filing.
“IER’s enforcement application is the very definition of government overreach,” SpaceX added.
Insider has contacted SpaceX and IER for comment.
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