SpaceX Tells Texas Court DOJ Admin Review of Hiring Practices 'Unconstitutional'

DOJ's administrative proceedings against SpaceX looking into whether the space exploration firm's hiring practices violated federal export control laws are unconstitutional, SpaceX said in a Sept. 15 complaint in the U.S. District Court for the Southern District of Texas (Space Exploration Technologies v. Carol Bell, S.D. Tex. # 23-00137).

The rocket maker said the administrative law judge presiding over the proceeding was "unconstitutionally appointed," is "unconstitutionally insulated from Presidential authority," is "unconstitutionally purporting to adjudicate SpaceX's rights" in a place other than a federal court, and is "unconstitutionally denying SpaceX its Seventh Amendment right to a jury trial."

The U.S. alleged that SpaceX engaged in illegal hiring practices by claiming it could only hire U.S. citizens and legal permanent residents because of export control laws (see 2308250041). DOJ said these laws impose no such restriction, adding that the company's hiring and recruiting practices amounted to discrimination.

The government filed a complaint with the agency's Office of the Chief Administrative Hearing Officer seeking an order requiring SpaceX to "cease and desist from" the alleged practices, pay a penalty for each individual discriminated against, provide "fair compensation to each application" that was "screened out or rejected," as well as other remedial measures. SpaceX said the whole administrative affair is constitutional, adding that the administrative law judge "was appointed in violation of the Appointments Clause" since the judge exercises "the powers of a principal officer," the complaint said. This judge is also insulated from presidential supervision by "two levels of for-cuase removal protection," the brief said.

The judge can only be removed by the attorney general for "good cause" as determined by the Merit Systems Protection Board "after opportunity for hearing before the Board." Members of this board can be removed by the president only for "inefficiency, neglect of duty, or malfeasance in office." SpaceX said this set-up violates Article II of the Constitution which gives the president the "entire" power to carry out federal law.

The proceeding also violates Article III of the Constitution since the government's suit seeks civil penalties under federal law, meaning the claims must be settled in an Article III court. The complaint said "there is no way for this Court to cure these flagrant constitutional problems without rewriting the relevant statutory provisions to give them 'an effect altogether different from that sought by the measure[s] viewed as a whole.'"