By Johanna Reeves, Esq.
(This is the second of a two-part series.)
In Part One of this series (see “Legally Armed,” Small Arms Review, Vol. 23, No. 4 (April 2019)), we walked through the U.S. anti-discrimination laws that prohibit employment discrimination on the basis of national origin or disability and identified where these laws intersect with controls on technology transfer and firearm possession restrictions that apply to the manufacture of firearms and other munitions. In this article we discuss how to reconcile the seemingly conflicting requirements of anti-discrimination laws and the technology controls of the Arms Export Control Act, Title 22, U.S. Code, Chapter 39 (AECA), its implementing regulations of the International Traffic in Arms Regulations, Title 22 Code of Federal Regulations, Parts 120-130 (ITAR) and the restrictions on transfers to and possession by certain persons under the Gun Control Act of 1968, Title 18 U.S. Code, Chapter 44 (GCA).
As we touched on previously, the laws and regulations governing the manufacture, possession and transfer of firearms and other defense articles protect our national security and public safety and are no less important than those that protect us from discrimination in certain areas of our life. Navigating the overlap among these laws can be challenging but is a must for any company seeking to maintain a robust compliance program. As with violations of anti-discrimination laws, violations of technology control and firearm possession requirements are serious. Penalties for violations can come with hefty fines, potential prison sentences and debarment from federal contracting.
I. Protecting Controlled Technology
For firearm and ammunition manufacturers, questions often arise as to how to protect against unauthorized export of controlled technology, including manufacturing know how. In navigating the intersecting U.S. export laws and anti-discrimination laws, the questions could include:
- As a manufacturer of firearms, can I require all my employees to be U.S. citizens because we work with controlled technology or technical data?
- Can I have a blanket corporate policy not to assign non-U.S. citizens to certain job functions?
- If an employee was born in an embargoed country and I am not able to obtain authorization to share technical data with that employee, do I have to offer accommodations to that employee because he or she is not able to perform his or her job?
Because of the breadth of U.S. export controls over technology, especially ITAR restrictions on disclosing “technical data” to “foreign persons,” it is not uncommon for businesses to conclude that a prudent policy is to restrict employment to U.S. citizens. However, such blanket policy may violate the federal laws on discrimination.
At the time of this writing, firearms and associated parts, components, attachments and accessories are controlled for export as “defense articles” under the AECA. Consequently, this article focuses on its implementation regulations, the ITAR. Readers may recall that last May 2018, the Departments of State and Commerce published proposed rules to transition certain firearms, ammunition, parts, components, accessories and attachments away from the ITAR controls and over to the Commerce export controls known as the Export Administration Regulations, 15 C.F.R. §730 et seq. (EAR). See also the two-part “Legally Armed” columns reviewing the proposed transition rules in Small Arms Review, Vol. 22, Nos. 8 and 9 (October and November 2018). However, as we entered 2019, the agencies had not yet published these rules as final. Rest assured, when the agencies do publish the final transition rules, we will explore the impact on technology transfers.
The ITAR places restrictions on the transfer of controlled technical data to non-U.S. persons. A license or other authorization (e.g., ITAR exemption or agreement) is required prior to transferring ITAR-controlled technical data to a non-U.S. person. Under the ITAR, a person’s nationality takes into account where the individual was born and all countries in which he/she has or had citizenship or permanent resident status. In order for an employer to know this information and be able to make a licensing determination, it must inquire as to that individual’s country of birth and country(ies) of citizenship. Requesting this information from an applicant or current employee, or shaping a job posting around this requirement, if done improperly, can violate U.S. anti-discrimination laws. Before we delve further into this intersection, it is important that we cover some basic ITAR definitions that will help guide our discussion.
It is important to note that the EAR also places restrictions on the transfer of technology to non-U.S. persons. Even though this article focuses on the ITAR requirements, please be aware that the anti-discrimination considerations discussed are equally applicable to the technology transfer controls under the EAR.
A. Defense Article
The ITAR defines the term “defense article” (22 C.F.R. §120.6) as any item or technical data designated on the U.S. Munitions List (USML). This term includes technical data recorded or stored in any physical form, models, mockups or other items that reveal technical data directly relating to items designated in the USML. Defense articles also include forgings, castings and other unfinished products, such as extrusions and machined bodies, that have reached a stage in manufacturing where they are clearly identifiable by mechanical properties, material composition, geometry or function as defense articles. The term does not, however, include basic marketing information on function or purpose or general system descriptions of USML items.
USML Category I controls firearms, close assault weapons, combat shotguns, silencers, as well as components, parts, accessories and attachments for these items. Guns over .50 caliber are controlled in USML Category II, as well as components, parts, accessories and attachments for these items. Ammunition for those firearms controlled in USML Categories I and II is classified under USML Category III. Components, parts, accessories and attachments for ammunition are also controlled in USML Category III.
B. Technical Data
The ITAR defines “technical data” in §120.10 as “information, other than software as defined in §120.10(a)(4), which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions or documentation.” The definition also includes classified information relating to defense articles and defense services on the USML and 600-series items controlled by the Commerce Control List; information covered by an invention secrecy order; and software directly related to defense articles. There is a technical data control paragraph in all USML categories.
As important as it is to know what constitutes technical data, it is equally important to understand what is not considered technical data. The definition does not include “information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities, or information in the public domain as defined in §120.11 or telemetry data as defined in note 3 to Category XV(f). It also does not include basic marketing information on function or purpose or general system descriptions of defense articles.”
The term “export” is defined in 22 C.F.R. §120.17, in relevant part, as an actual shipment or transmission out of the United States, including the sending or taking of a defense article out of the United States in any manner or releasing or otherwise transferring technical data to a foreign person in the United States (a “deemed export”). Any release in the United States of technical data to a foreign person is deemed to be an export to all countries in which the foreign person has held or holds citizenship or holds permanent residency. The ITAR defines “foreign person” to mean any natural person who is not a lawful permanent resident of the United States or who is not a protected individual (as defined in the Immigration Reform and Control Act, discussed in Part One of this series), as well as a foreign corporation, business association, partnership, trust, society or any other entity or group that is not incorporated or organized to do business in the United States and any international organization, foreign government and any agency or subdivision of a foreign government. It is important to note that the EAR makes it clear that the term “foreign person” is synonymous with the term “foreign national” as used in the EAR.
As you likely have already surmised, the “deemed export” concept is where companies find the direct intersection of anti-discrimination laws and U.S. export controls. How can a company walk the line between requesting relevant information on an employee’s (or potential employee’s) nationality without violating anti-discrimination laws that prohibit discrimination based on nationality?
D. Navigating the Intersection with Anti-Discrimination Laws
The U.S. Government has provided some guidance for industry with respect to the intersection between the various laws controlling technology transfer, firearm possession and anti-discrimination laws. First, with respect to technology transfer, the licensing requirements of the ITAR are not prohibitions against hiring non-U.S. persons. In fact, nowhere in the regulation is there a prohibition against the hiring of non-U.S. persons to perform license-required tasks. The only requirement is that the employer seek the proper authorization before the person is allowed access to the controlled technical data.
An employer may consider citizenship status if it is required in order to comply with a law, regulation or executive order, or the terms of a Federal, State or local government contract (8 U.S.C. §1324b(a)(2)(C)). However, this must be done in a non-discriminatory way. The U.S. Department of Justice (DOJ) has published letters it has issued to companies seeking guidance on how to comply with anti-discrimination laws when verifying an employee’s citizenship status under U.S. export control laws. In DOJ’s February 25, 2013 letter, it advises that “if the information is sought for compliance with export licensing requirements, and not for employment eligibility verification or any discriminatory purposes, inquiring about an applicant’s citizenship or country of origin for this purpose would not appear to violate the [Immigration and Nationality Act] anti-discrimination provision as long as such inquiries are made uniformly and without the intent to discriminate on the basis of national origin or citizenship status.” The full text of this letter is available at: justice.gov/sites/default/files/crt/legacy/2013/02/28/163.pdf. Additional DOJ letters addressing anti-discrimination laws and U.S. export controls are available at: justice.gov/crt/file/837281/download (March 31, 2016 letter), and justice.gov/sites/default/files/crt/legacy/2011/06/07/134.pdf (October 6, 2010 letter).
However, DOJ advises that “to the extent an employer screens out all applicants from particular countries or rescinds job offers for certain applicants based on the assumption that the employer would need to obtain an export license for those individuals at some point during the employment relationship, the applicants may allege national origin discrimination in a charge filed with [the appropriate agency].” This guidance applies equally to current employees. Having to obtain an export license to employ an individual cannot be used as the sole reason for refusing to hire or promote non-U.S. persons.
II. Gun Control Act Restrictions on Transfer and Possession
Another potentially tricky area of compliance is the GCA prohibition on certain categories of persons to ship, transport, receive or possess firearms or ammunition. One type of prohibited person is an individual who is an unlawful user of or addicted to any controlled substance (as defined in section 102 of the Controlled Substances Act, codified at 21 U.S.C. §802). To add a layer of complexity to this, many states have passed laws legalizing marijuana use in some form. So it is not uncommon for a business licensed under the GCA to ask:
- Can I screen potential employees against the prohibited persons provisions of the GCA without violating the Americans with Disabilities Act?
From a federal law perspective, the use or possession of marijuana remains unlawful regardless of whether it has been legalized or decriminalized for medicinal or recreational purposes in the state where you reside. This means that any person who currently uses or is addicted to marijuana, regardless of whether it is legal in your state, is “an unlawful user of or addicted to a controlled substance and is prohibited by federal law from possessing firearms or ammunition.” ATF issued an open letter in 2011 directly addressing the use of marijuana for medical purposes and federal firearms laws (available at: atf.gov/file/60211/download).
As with the question of an individual’s nationality, the question becomes how may a company inquire about an individual’s current drug use without violating the anti-discrimination laws surrounding addiction disabilities?
With respect to GCA prohibitions on the transfer of firearms to a person who is an unlawful user of or addicted to any controlled substance, the EEOC provides guidance on its website (eeoc.gov) to assist employers on making a determination as to current drug use. Remember, past drug addiction and recovery may be considered a disability—the ADA does not allow questions about disabilities before making a conditional job offer. However, because current drug users are not protected under the ADA, an employer may ask about current illegal use of drugs. Indeed, the EEOC advises, “questions may involve illegal drugs (cocaine, crack, heroin) and the illegal use of prescription drugs. An employer also may require an applicant to take a drug test. (If the drug test is positive, the employer may validate the test results by asking about lawful drug use or other possible explanations for the positive result, other than the illegal use of drugs.)”
It can be challenging to navigate the thorny intersection of anti-discrimination prohibitions with technology transfer controls and GCA transfer and possession restrictions. As we have seen, employers must be aware of the potential for anti-discrimination claims when verifying citizenship status for purpose of export controls. Contrary to what some believe, the ITAR does not contain outright prohibitions related to employment of non-U.S. persons. Inquiries related to citizenship status must be made uniformly (i.e., of all employees or potential hires) and be solely for the purpose of determining whether an export license is required. These inquiries should be separate and distinct from those made to determine employment eligibility generally. On the GCA side, questions surrounding current illegal drug use are permissible, but those related to past use or recovery are not.
To avoid running afoul of federal non-discrimination laws, it is important that businesses recognize the intersection of these laws with export controls over technology and GCA restrictions. Companies should put in place comprehensive processes and procedures, including training, to guide the various functions within a company when making hiring, firing and advancement decisions.
The author extends her appreciation to the generous contributions of Katherine Heubert, Esq., at Reeves & Dola, LLP.
***The information contained in this article is for general informational and educational purposes only and is not intended to be construed or used as legal advice or as legal opinion. You should not rely or act on any information contained in this article without first seeking the advice of an attorney. Receipt of this article does not establish an attorney-client relationship.
About the Author
Johanna Reeves is the founding partner of the law firm Reeves & Dola, LLP in Washington, DC (reevesdola.com). For more than 15 years she has dedicated her practice to advising and representing U.S. companies on compliance matters arising under the federal firearms laws and U.S. export controls. Since 2011, Johanna has served as Executive Director for the Firearms and Ammunition Import/Export Roundtable (F.A.I.R.) Trade Group (fairtradegroup.org). She has also served as a member of the Defense Trade Advisory Group (DTAG) since 2016. Johanna can be reached at firstname.lastname@example.org or 202-715-9941.
|This article first appeared in Small Arms Review V23N5 (May 2019)|