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A U.S. judge ruled on Wednesday that Elon Musk's SpaceX must comply with a Department of Justice subpoena for the company's hiring records, opening the door to a federal probe into the company.
"Respondent SpaceX is ORDERED to comply in full with the subpoena within 21 days," U.S. judge Dolly Gee wrote in the order.
Gee's court reviewed the case over the past two months, following SpaceX's objection in April to the recommendation by another federal judge that the company should be forced to comply with the subpoena.
The court's recommendation in March stated there are "several" investigations into the company, and rejected SpaceX's argument that the subpoena constituted "government overreach." Gee's court accepted those findings and that recommendation.
SpaceX did not immediately respond to CNBC's request for comment.
The DOJ's Immigrant and Employee Rights Section launched a probe last year, after Fabian Hutter, a SpaceX job applicant, complained to the government that the company discriminated against him. In an interview with CNBC earlier this year, Hutter said he believes SpaceX decided not to hire him after he answered a question about his citizenship status in March 2020 for a technical strategy associate position.
Hutter holds dual citizenship in Austria and Canada but is a lawful permanent U.S. resident, according to court records filed in U.S. District Court for the Central District of California.
However, the DOJ unit is not only investigating the complaint, but also has said it "may explore whether [SpaceX] engages in any pattern or practice of discrimination" barred by federal law.
Investigators in October issued a subpoena demanding that SpaceX provide information and documents related to its hiring and employment eligibility verification processes, to which SpaceX has not fully complied.
SpaceX's lawyers argued in court that the DOJ's probe is overbearing given the original complaint.
"No matter how generously 'relevance' is construed in the context of administrative subpoenas, neither the statutory and regulatory authority IER relies on, nor the Fourth Amendment to the U.S. Constitution, permits IER to rifle through SpaceX's papers on a whim and absent reasonable justification," SpaceX said.
"And even if IER could somehow belatedly justify its current investigations, IER's subpoena is excessively overbroad. IER's application for an order to comply with the subpoena should be denied," the company added.
The company is allowed to hire noncitizens who have a green card under U.S. International Traffic in Arms Regulations, or ITAR. Those rules say that only Americans or noncitizens with a U.S. green card can have physical or digital access to items on the U.S. Munitions List, which consists of defense-related equipment, software and other material.
SpaceX noted that it currently employs "hundreds of non-U.S. citizens" among its nearly 10,000 employees. Additionally, the company did not hire Hutter or anyone else for the position and said it eliminated the role.
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