Policy Guidance on the use of the national security exception contained in sec. 703(g) of Title VII of the Civil Rights Act of 1964

1. SUBJECT: Policy Guidance on the use of the national security exception contained in § 703(g) of Title VII of the Civil Rights Act of 1964, as amended.

2. PURPOSE: This policy guidance reflects the Commission's position on charges where the employer or other entity covered by Title VII raises the national security exception contained in § 703(g) as a defense to a charge of discrimination.

3. EFFECTIVE DATE: Upon receipt.

4. EXPIRATION DATE: As an exception to EEOC Order 205.001, Appendix V, Attachment 4, § a(5), this Notice will remain in effect until rescinded or superseded.

5. ORIGINATOR: Coordination Division, Office of Legal Counsel.

6. INSTRUCTIONS: File behind p. 8 of Section 622 of Volume II of the Compliance Manual, after §§622.4, National Security Exception.

7. SUBJECT MATTER:

I. Introduction

Section 703(g) provides that:

Notwithstanding any other provisions of this title, it shall not be an unlawful employment practice for an employer to fail or refuse to hire and employ any individual for any position, for an employer to discharge any individual from any position, or for an employment agency to fail or refuse to refer any individual for employment in any position, if--

(1) the occupancy of such position, or access to the premises in or upon which any part of the duties of such position is performed or is to be performed, is subject to any requirement imposed in the interest of the national security of the United States under any security program in effect pursuant to or administered under any statute of the United States or any Executive Order of the President; and

(2) such individual has not fulfilled or has ceased to fulfill that requirement.

Section 703(g) is an affirmative defense to a charge of discrimination. As such, respondents must raise it and prove that the challenged employment decision was made because of national security requirements imposed by statute or Executive Order. The scope of the national security exception is also discussed in § 622.4 of Volume II of the Compliance Manual. The Commission's position is that so long as the two conditions in § 703(g) are met, "it is not an unlawful employment practice to deny employment opportunities to any individual who does not fulfill the national security requirements..." of the position being applied for.¹ Thus, analysis of this exception should focus on the position in question and the individual applicant's circumstances to ensure that the job (s)he applied for is in fact subject to national security requirements imposed by statute or Executive Order and that the charging party in fact cannot meet the necessary national security requirements.

Charges alleging national origin discrimination where there is a citizenship requirement that is imposed by statute or Executive Order in the interest of national security are CDP. See § 622.4(b) of the Compliance Manual. This policy guidance provides guidance on how to process a charge when the employer raises a national security requirement other than citizenship as a defense to a charge.

Background

The Federal government, in the interest of national security, may require that entities performing or engaging in business with the government, assign only persons with security clearances to work on government projects. However, "no one has a 'right' to a security clearance."² Security clearances are granted at the discretion of the designated agency official. The general standard is that a clearance may be granted only when it is "clearly consistent with the interests of the national security."³ Agencies may evaluate an individual's request for a security clearance on the basis of past or present conduct⁴ or on concerns unrelated to conduct such as having relatives residing in a foreign countrycontrolled by a government whose interests or policies are hostile to or inconsistent with those of the United States.⁵

Review of the denial or revocation of security clearances is limited. The Supreme Court recently stated that nonexpert bodies cannot second guess the discretionary decisions of agency heads in determining who is qualified to receive security clearance.⁶ The Commission is therefore precluded from reviewing the substance of security clearance decisions. The Commission is also precluded from reviewing the validity of the security requirement itself. However, the legislative history of § 703(g) makes clear that the Commission is not precluded from determining whether the grant, denial or revocation of security clearances is conducted in a nondiscriminatory manner.

II. Legislative History

The legislative history of § 703(g) indicates that this provision was only intended to except from Title VII liability situations where employers refuse to hire or discharge persons who are unable to obtain a required security clearance.⁷

However, section 703(g) only made express what was required even without the section, i.e., that "employers would not, and could not, ignore valid national security regulations if they are engaged in governmental work involving the application of these regulations."⁸ However, the national security requirements must be applied equally without regard to race, sex, color, religion or national origin. Employers cannot, merely by invoking national security, exempt themselves from coverage of the nondiscrimination provisions of the act.⁹ Senator Humphrey stated:

An employer could not deny employment to a qualified Negro on the ground that he does not have security clearance and employ a white person without clearance.... Nor could an employer prefer one employee or applicant over another by seeking security clearance for him while refusing to request clearance for another, if such preference is based on discriminatory considerations.¹⁰

III. Court Decisions

Only one court has decided a case where the § 703(g) national security exception was raised. In Molerio v. F.B.I., 749 F.2d 815 (D.C. Cir. 1984), the court upheld the FBI's refusal to hire Molerio as a special agent after completing a background investigation required for a "top secret" security clearance. The FBI determined that Molerio could not get the necessary security clearance because he had relatives in Cuba and the agency generally attached special weight to the fact that an applicant "had relatives residing in any foreign country controlled by a government whose interests or policies are hostile to or inconsistent with those of the United States."¹¹ The FBI asserted that Molerio was not qualified for the job because he could not obtain the necessary security clearance validly required pursuant to an Executive Order. Molerio asserted that the FBI's policy regarding his relatives was discriminatory and had a disparate impact on applicants of Cuban ancestry.

The court held that the FBI's security policy has no greater impact on Cubans than it does on persons from other communist countries. It also held that § 703(g) "specifically acknowledges the general validity of national security clearance requirements," and "the mere fact that such requirements impose special disabilities on the basis of connection with particular foreign countries is not alone evidence of discrimination."¹²

IV. Commission Precedent

In an unpublished decision, the Commission found that a private employer that performs work for the military acted in good faith and did not violate Title VII when it failed to promote a naturalized United States citizen from Yugoslavia. The employer did not promote the employee even though he was the most qualified applicant for the promotion, because it would take six months to a year for the employee to receive the necessary security clearance for the job since he still supported family residing in Yugoslavia. The Commission held that it is not a violation of Title VII for an employer to fail to promote an employee because he has relatives in a communist country where it would take six months to a year before the employee could get the required security clearance and the employer had to fill the position immediately. Critical to the Commission's decision were the facts that no one from within the company was promoted to the position, the employer ultimately hired persons who already had the required security clearance and there was no evidence that applicants of other nationalities received more favorable treatment in securing the position.¹³

EXAMPLES

Example 1 - CP applies to work for X company. X company has a contract with a federal agency. The agency's regulations, pursuant to an Executive Order, require that all of X's employees working on the government contract have a top secret security clearance. CP does not have a top secret security clearance. The investigation indicates that he has applied for one in the past and been denied such a clearance for legitimate nondiscriminatory reasons. X does not hire CP. X is entitled to the § 703(g) exception because it was prohibited from employing anyone who did not have or could not get a top secret security clearance.

Example 2 - CP applies to work with Y company which does primarily government contract work. Y's government contracts require that personnel assigned to work on the projects have security clearances. In addition, Y requires that its employees and their families reside in the United States for security clearance reasons although this is not required in the government contract nor by statute or Executive Order. CP has family living in Mexico. Y refuses to hire CP because he has family that resides in a foreign country. Y is not entitled to the § 703(g) national security exception because its decision not to hire the CP was not made because of national security requirements imposed by statute or Executive Order. The charge should be investigated to determine whether the failure to hire the CP was for a discriminatory reason. For example, such a policy would discriminate against Hispanics if it were applied only to applicants who had family residing in Mexico.

Example 3 - Z company loses a senior scientist two months before the deadline on a large defense contract with the federal government. In order to meet the contract deadline, Z must hire a replacement scientist immediately. Statutes dictate that persons working on defense contracts of this nature have a security clearance. CP, a woman, is selected as the most qualified scientist for the position. Z's security specialist looks over CP's security clearance forms and discovers that CP has relatives living in a communist country. The security specialist knows, from past experience, that this will result in a lengthy security clearance process of greater duration than the contract. Z does not hire CP but hires another qualified scientist, who is male, and who already has the required security clearance. Z's employment actions in this situation were based on legitimate nondiscriminatory reasons and thus do not violate Title VII.

Example 4 - ACME Military Manufacturing has contracts with the federal government requiring that all ACME employees working on government contracts have a security clearance. ACME turns down CP, a male, for a job working on the government contract because he does not have a security clearance. However, ACME hires a woman to work on the same government contract who also does not have a security clearance. CP files a discrimination claim against ACME. ACME invokes the national security exception. ACME is not entitled to the national security exception in defending this charge. It is apparent that the CP's lack of a security clearance is not the real reason for ACME's failure to hire him since it hired a female who also lacked the required security clearance. The investigator should investigate to determine whether the employer has a legitimate nondiscriminatory reason for its actions.

VI. Charge Processing

Section 703(g) only excepts employers from Title VII liability for adverse employment actions taken pursuant to national security requirements imposed by statute or Executive Order. As noted above, § 703(g) provides an affirmative defense to a charge of discrimination. As such it must be raised by the employer. In addition, the employer must prove that it is entitled to rely on § 703(g), and that its actions were taken pursuant to § 703(g). Employers cannot use § 703(g) to circumvent the requirements of Title VII by selectively applying national security requirements to individuals who are members of a protected class or to positions that are not subject to national security requirements.

Charges alleging national origin discrimination where there is a citizenship requirement that is imposed by statute or Executive Order in the interest of national security are CDP. The directions for investigating such charges described in § 622.4(b) in Volume II of the Compliance Manual should be followed. In those instances where an employer raises other national security requirements as a defense to a charge, such as failing to obtain a security clearance, the investigation should determine if the adverse employment action was taken pursuant to national security requirements that are required by statute of the United States or Executive Order of the President.

In addition, the investigation should also determine whether the requirement claimed to be imposed in the interest of national security is required for the position in question. To determine whether the position at issue is subject to national security requirements, the statute or Executive Order which the employer cites as the legal authority for the excluding requirements should be reviewed. Next, the jobs which are subject to the national security provisions should be identified. The investigator should then determine whether the job in question falls within those cited in the national security requirements. For instance, a design engineering position may be subject to national security criteria where the employer is designing a new weapons system for the Defense Department. However, a position in the personnel office may not be subject to national security requirements as that job is not directly related to the fulfillment of the defense contract. Therefore, with respect to that position, § 703(g) will not protect the employer from Title VII liability. Finally, the investigator should determine whether the charging party has failed or has ceased to meet the requirement imposed by statute or Executive Order.

If the investigator determines that the exception was raised pursuant to a statute or Executive Order and that the charging party has failed or has ceased to meet the requirement imposed by the statute or Executive Order, the employer is entitled to rely on the exception. However, if the investigator determines that these two requirements have not been met, the investigator should determine whether the employer's actions were discriminatory.

                                                         Date:5/1/89					
Approved:     /s/     
                                                         Clarence Thomas
                                                         Chairman

Footnotes

¹ 29 C.F.R. § 1606.3.

² Department of Navy v. Egan, ___ U.S. ___, 108 S.Ct. 818, 824 (1988).

³ Executive Order No. 10450. See also 3 C.F.R. 936, 938 (1949-1953 Comp.); 10 C.F.R. § 710.10(a) (Department of Energy); 32 C.F.R. § 156.3(a) (Department of Defense).

⁴ Egan, 108 S.Ct. at 824.

⁵ Ibid; Molerio v. F.B.I., 749 F.2d 815, 823 (D.C. Cir. 1984).

⁶ The Court stated that:

For reasons... too obvious to call for enlarged discussion the protection of classified information must be committed to the broad discretion of the agency responsible, and this must include broad discretion to determine who may have access to it. Certainly, it is not reasonably possible for an outside nonexpert body to review the substance of such a judgment and to decide whether the agency should have been able to make the necessary affirmative prediction with confidence. Nor can such a body determine what constitutes an acceptable margin of error in assessing the potential risk. The Court accordingly has acknowledged that with respect to employees in sensitive positions there is a reasonable basis for the view that an agency head who must bear the responsibility for the protection of classified information committed to his custody should have the final say in deciding whether to repose his trust in an employee who has access to such information. (citations omitted).

Egan, 108 S. Ct. at 825.

⁷ 110 Cong. Rec. 12723 (1964) (statement of Sen. Humphrey).

⁸ Id. at 14239.

⁹ Ibid.

¹⁰ Ibid.

¹¹ 749 F.2d at 823. Thus, employers that exclude individuals from employment opportunities who have relatives residing in countries whose interests or policies are not hostile to or inconsistent with those of the United States, simply because it may take a long time for the individual to obtain a security clearance, may not be entitled to claim the exception contained in § 703(g).

¹² Ibid.

¹³ EEOC Decision 71-806 (unpublished).