In court and at the negotiation table, US Justice Department prosecutors and defence lawyers from big firms often take differing views of the law. Less common is the case in which a different view of the law makes the firm, and not the client, the focus of a government investigation.

Clifford Chance (CC) found itself in that position over its apparent misunderstanding of data-access regulations concerning the export of defence and military equipment. On Wednesday (29 August), the firm agreed to pay a $132,000 civil penalty, along with lost wages to three unidentified individuals, to resolve a Justice Department investigation into the firm's refusal last year to allow dual citizens and non-US citizens to work on a document review project.

According to the Justice Department, CC unlawfully shut out dual citizens, along with non-citizens authorized to work in the US, based on the firm's misreading of regulations that limit access to certain sensitive information. The settlement papers did not reveal the identity of the client.

CC, according to the settlement document, restricted its staffing to US citizens in a "good faith" effort to comply with the data access rules set by the International Traffic in Arms Regulations (ITAR).

But the Justice Department said the regulations also allow US nationals, lawful permanent residents, asylees and refugees to access certain sensitive information covered by those national security rules.

A CC spokesperson said the firm was "pleased to reach a settlement on this matter." The spokesperson declined to identify the client for the document review project.

Justice officials said ITAR regulations do not limit sensitive information to only US citizens. Indeed, the regulations also give access to US nationals, lawful permanent residents, asylees, and refugees, the department said. The department cautioned that employers that limit their hiring to US citizens without a proper legal basis run the risk of violating the Immigration and Nationality Act's anti-discrimination provisions.

"Employers subject to the ITAR must be careful not to engage in unlawful discrimination against US workers," John Gore, acting assistant attorney in charge of the Justice Department's Civil Rights Division, said in a statement. "The Department of Justice is committed to ensuring that employers do not unlawfully exclude US citizens and work authorised non-US citizens from employment opportunities."

CC general counsel James Paul signed the agreement for the firm, which did not admit guilt.

Under the settlement, CC will be subject to DOJ monitoring and reporting requirements for two years. The firm must also train employees on the anti-discrimination provision of the Immigration and Nationality Act and inform clients who request citizenship-based hiring restrictions of the law's requirements.