Deemed Export-Related Employment Violations Becoming Easy Enforcement Targets, Lawyers Say

Companies involved in export controlled technology should be careful not to violate anti-discrimination regulations in their job postings, which have become “low-hanging fruit” for U.S. enforcement officials, trade lawyers said. The lawyers said many companies subject to deemed export regulations inadvertently advertise that only U.S. citizens can apply for their job posting, which could invite penalties from the Justice Department.

“A lot of employers get it wrong,” said Fragomen's Patrick Shen, a trade lawyer and former Department of Justice official, speaking during a June 15 webinar hosted by KPMG. “It has really become low-hanging fruit for the civil rights enforcement officials to just go on the job sites and just pick them off one by one and charge employers with discrimination.”

Many companies mistakenly believe that deemed export regulations under the Export Administration Regulations and the International Traffic in Arms Regulations -- which restrict exports to certain foreign nationals, even if they are within the U.S. -- mean that they must limit their job searches to U.S. citizens. Shen said he sees that mistake in almost “every case” involving discrimination violations related to export controlled goods (see 2105190017).

“Because of the misunderstanding, the job ad will say ‘U.S. citizens only,’” Shen said. “That, of course, is discriminatory.” He said that language leaves out other protected groups of people who are eligible to work and exempted from deemed export regulations, including asylees and refugees.

KPMG's Steven Brotherton said he sees the mistake frequently on job sites. “If you go right now to Monster.com, you can put in ‘ITAR and U.S. citizen’ and you'll probably come up with a whole lot of job postings that have potentially discriminatory limitations,” Brotherton said during the webinar. He said companies must craft their job advertisements in a “way that is not excluding a particular person.”

Companies should make sure they are frequently screening their job postings, especially if they are “automatically populated,” to make sure they aren’t violating anti-discrimination laws, KPMG's Jenna Leigh Glass said. “How often are you actually reviewing to make sure that the language on that job [posting] is not inadvertently discriminating based on citizenship status or national origin?” she said.

Companies can also take steps to help expedite their deemed export license applications after they make a hire. The application should include a “really detailed description” of the employee’s role and their connection to the controlled technology, KPMG's Sydney Palmer said. If the application isn’t detailed, it may face delays, she said.

“Something we're seeing that can slow down applications is when there's not that clear connection, there can be follow-up questions that have to be addressed,” Palmer said during the webinar. “So making sure that the letter of explanation that goes with the license application lays all those pieces out as clearly as possible is something to help get an approval faster.”

Brotherton said he has seen some deemed export license applications take months, and that companies should submit an application well in advance of when they need an employee to start. “They may take two months to process, but in some cases it could take much, much longer,” he said. “It just depends on the current political environment or other national security concerns related to the technology.”