September 22, 2023

SpaceX headquarters in Los Angeles, California.

AaronP / Bauer-Griffin | GC images | Getty Images

A US judge ruled Wednesday that Elon Musk’s SpaceX must comply with a Justice Department subpoena for the company’s hiring records, opening the door for a federal investigation into the company.

“The Defendant SpaceX is ORDERED to fully comply with the subpoena within 21 days,” wrote US Judge Dolly Gee in the order.

Gee’s court has been considering the case for the past two months after SpaceX appealed in April against another federal judge’s recommendation that the company should be compelled to comply with the subpoena.

The court’s recommendation in March said there were “multiple” investigations against the company and rejected SpaceX’s argument that the subpoena was a “government handover.” Gee’s court accepted these findings and this recommendation.

SpaceX did not immediately respond to CNBC’s request for comment.

The DOJ probe

The DOJ’s Immigration and Labor Rights Department opened an investigation last year after Fabian Hutter, a SpaceX job applicant, complained to the government about the company discriminating against him. In an interview with CNBC earlier this year, Hutter said he believed SpaceX decided not to hire him after answering a question about his citizenship status for a position as a technical strategy assistant in March 2020.

Hutter has dual citizenship in Austria and Canada, but is a lawful permanent resident of the United States according to court records filed in the US District Court for the Central District of California.

However, as well as investigating the complaint, the DOJ unit has said that it “may be able to investigate whether” [SpaceX] engages in a pattern or practice of discrimination “prohibited by federal law.

In October, investigators issued a subpoena requesting SpaceX to provide information and documents related to its hiring and employment eligibility review processes, which SpaceX has not fully complied with.

Settings guidelines available

SpaceX attorneys argued in court that the DOJ’s investigation was presumptuous given the original complaint.

“No matter how generously ‘relevance’ is interpreted in the context of administrative subpoenas, neither the legal and regulatory agency on which the IER relies nor the fourth amendment to the US Constitution allows the IER to do the on a whim and without adequate justification Search SpaceX papers, ”SpaceX said.

“And even if IER could somehow belatedly justify its current investigation, IER’s subpoena is overly broad. IER’s request for an order to comply with the subpoena should be denied, ”added the company.

The company is allowed to hire non-citizens who have a green card under the US International Traffic in Arms Regulations (ITAR). These rules state that only Americans or non-citizens with a US green card have physical or digital access to items on the US ammunition list, which consists of defense-related equipment, software, and other materials.

SpaceX found that it currently employs “hundreds of non-US citizens” among its nearly 10,000 employees. Additionally, the company didn’t hire Hutter or anyone else for the position, saying it had cut the role.

– CNBC’s Dan Mangan contributed to this report.

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