That's what I thought too. I would imagine if something like this were the case, it would be more likely done out of clearance concerns or even a genuine fear of infiltration, than for customer facing optics.
If it's about hiring non-citizens, then I think there's a legitimate procedural issue around employees needing clearance levels, but I'd find it hard to believe that there would be a lawsuit over racial biases if it's driven by clearance requirements making non-citizens ineligible.
Who would be more likely to be compromised by last year's OPM database hack by the Chinese (supposedly) which contained info on most of the cleared government and contract workers in the US?
* A guy of European ancestry from Anywhere, USA who has no family, friends, or relations to China, and never stepped foot there.
* A naturalized US citizen from China whose friends, family, and associates still live there, and who often travels back for visits.
Even if the naturalized American - Chinese citizen was not corrupted himself, countries like China would not be above threatening his relatives still there.
There are plenty of people of Chinese ancestry (or Asian ancestry in general) who have no family (within a few generations), friends, or relations to China, and never stepped foot there.
If the objection is to naturalized US citizens from China who have still have ties to China (I am one of those people), fair enough, but then there are three problems:
1. You should be filtering for foreign connections in general, not for ethnicity. That test already happens in the process of getting security clearance.
2. You can leverage people in plenty of other ways that do not involve threatening friends or relatives. Both the US and China have teams in government agencies that do that for a living.
3. Oh man this is a huge can of worms when it comes to civil rights, equality, and constitutional issues in general.
That makes for a not-very-accurate filter that is ethically suspect that is also not hard to bypass for the seemingly valuable intel underneath. Seems like bad ROI.
Perhaps I really am naive as you say, but on the second order of analysis it seems to me like an ineffective policy if it were actually a policy.
Section 703(g) exceptions are somewhat tricky from a HR perspective because they can edge into territory that would normally be an EEO violation (I mean, obviously, since it's an exception to the rule) and there's very little precedent on them. AFAIK, there's only one court case around about it, where a guy was not hired for a cleared position on account of having family in Cuba. [1] The decision not to hire him, based on the reasonable belief that he would not be clearable, was considered acceptable. "Example 3" on that page also gets into another common scenario, which is declining to hire someone based on the belief that their clearance process would be long, and the company has an immediate need. (IMO, this is the most common scenario. Someone with a lot of family in China or Russia might well be clearable, but their clearance might be likely to take too long for them to be a viable candidate, particularly at a company that doesn't have non-cleared work for them to do in the meantime.)
[1]: https://www.eeoc.gov/policy/docs/national_security_exemption...
The U.S. government decides who gets clearances. Contracting companies submit prospective employees for contractor positions based off of their qualifications. This is done by a worksheet considering the essential skills for the position and points for education, previous experience, etc. Contracting companies have no business pre-screening based off of anything more than U.S. citizenship.
Chinese espionage actions have not been about coersion; they've been about incentives and appeals to heritage. The only notable Chinese-linked espionage cases in recent history have been first-generation immigrants, with nationalism and loyalty appeals, not threats against family members.
I haven't seen any denials of clearances in the Industrial Security Clearance Decisions [1] based off of simple national origin claims.
The odd thing is that there are fairly straightforward ways to write position descriptions such that the "qualified applicant" pool is as small and well-defined as you want it to be. This is practically a subspecialty within HR. That they are getting sued would seem to imply that they didn't do any of the normal procedural stuff that most companies have their HR departments doing to head off such accusations, meritorious or not.
I used to run an import/export business......Pakistan guys would try to connect online to score a business visitors visa. Some were upfront, others had no problem wasting 5 hours of your time with a fake business deal in hopes you'll sponsor a visitor visa at the end.