Foreign High - Tech Workers Pose Legal Challenges

Guest Opinion Stephan E. Becker and Nancy A. Fischer

Foreign High - Tech Workers Pose Legal Challenges

From Virginia's Dulles corridor to California's Silicon Valley, the "Help Wanted" signs are plentiful. Many companies in the United States are increasingly looking overseas to meet their needs for highly skilled workers. Often they hire foreign nationals to fill positions that require sophisticated technical backgrounds.

Although most high-tech executives understand the need to comply with immigration laws, many do not realize there are also export regulations when hiring foreigners. The Export Administration Regulations may require them to get an export license for some hires.

Specifically, where the foreign national does not have permanent resident status - a green card - the export control laws deem the exposure of technology to that person within the United States as an export to his or her home country, regardless of whether he or she will ever transfer the data abroad. If an export license is required, it must be obtained before exposing the employee to the technology.

Violations of the Export Administration Regulations are punished severely, so determining whether an export license is needed is essential. It depends on the type of technology involved and the home country of the prospective employee. Also, export control requirements for hiring foreign nationals do not create exemptions against discrimination. Thus, a company generally may not refuse to consider a foreign national for employment on the basis that it does not wish to bother seeking an export license.

On the other hand, if a license cannot be obtained, and the prospective employee would therefore not be able to perform the tasks for which he or she was being hired, the company usually would be under no further obligation.

In general, if the Export Administration Regulations require a company to obtain a license to export the specific technology, the company needs a license to expose the foreign national to that technology, even if the person has agreed to sign a confidentiality agreement protecting the company's trade secrets.

Whether the export of certain technology to a particular country requires an export license depends on the technology and the country of destination. The Commerce Department may require a license for a foreign national to work on software or technology for the development or production of equipment related to certain types of products.

If the technology or software is publicly available, an export license is generally not required. "Publicly available" means the technology is published, is in a library or is open to the public; available on the public record, such as in a patent; or taught in university courses.

Technology can also qualify as publicly available if access is available at no more than the cost of reproduction or distribution. Other license exceptions may be applicable.

Countries under U.S. embargo are of greatest concern, including Cuba, Libya, Iran, Iraq, Syria, Sudan and North Korea. It would be extremely difficult to obtain an export license for foreign nationals from those countries.

There also are certain restrictions on countries such as the former members of the Soviet Bloc, the People's Republic of China, India, Pakistan, Taiwan and Vietnam, as well as the Middle East countries. Applications to employ nationals of these countries are reviewed by the government on a case-by-case basis; not all of them are subject to the same restrictions.

If an export license is needed, an application must be submitted to the Commerce Department, accompanied by a letter of explanation with detailed biographical information on the person. The letter also must identify the job responsibilities the person would have and the Export Control Classification Number of the technology in question.

Once the application is submitted, it will be circulated to an interagency committee for review. The committee includes the departments of State, Energy and Defense and the Arms Control and Disarmament Agency. It may request more information regarding the application, or reject it on national security grounds.

The review process has been much smoother lately, and the approval rate has risen since the committee agreed on a standard list of conditions.

Whether applications will be approved depends in part on the technology level and whether the foreign national has a background that suggests ties to a foreign government or previous work experience with certain types of entities, particularly military.

Care should be taken to ensure the individual's background information is complete. If there are gaps, they should be explained in the letter accompanying the application.

If a foreign national export license is approved, Commerce will normally make the license contingent on 14 conditions, including restrictions on the type of technology to which the person may be exposed.

Companies should either update or adopt internal compliance procedures to ensure prospective employees are properly screened for export control compliance. Such procedures may involve alerting the human resources department to this issue or appointing an export control compliance manager to ensure the procedures are followed.

Stephan E. Becker and Nancy A. Fischer are attorneys in the Washington, D.C.-based law firm of Shaw Pittman Potts & Trowbridge. The firm's home page is www.shawpittman.com.


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