Zeinali v. Raytheon Co.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

HOSSEIN ZEINALI,  No. 09-56283

Plaintiff-Appellant,

D.C. No.

v.

 3:07-cv-01852-

RAYTHEON COMPANY; DOES 1 MMA

THROUGH 25, INCLUSIVE,

OPINION

Defendant-Appellee.



Appeal from the United States District Court

for the Southern District of California

Michael M. Anello, District Judge, Presiding

Argued and Submitted

November 4, 2010—Pasadena, California

Filed April 4, 2011

Before: Johnnie B. Rawlinson and Milan D. Smith, Jr.,

Circuit Judges, and Robert Clive Jones, District Judge.*

Opinion by Judge Milan D. Smith, Jr.

*The Honorable Robert Clive Jones, United States District Judge for the

District of Nevada, sitting by designation.

4449

ZEINALI v. RAYTHEON COMPANY 4453

COUNSEL

Ray Keramati, EMLS, P.C., San Diego, California, for the

plaintiff-appellant.

John S. Adler (argued), Henry D. Lederman, and Lara K.

Strauss, Littler Mendelson, P.C., San Diego, California, for

the defendant-appellee.

OPINION

M. SMITH, Circuit Judge:

Plaintiff-Appellant Hossein Zeinali, who is of Iranian

descent, was employed by Defendant-Appellee Raytheon

Company for approximately four years. He alleges, inter alia,

that Raytheon violated the California Fair Employment and

Housing Act (FEHA), Cal. Gov. Code § 12940 et seq., by ter-

minating him on the basis of his race and national origin after

he was denied a security clearance by the Department of

Defense.1 Raytheon contends that (1) per Department of the

Navy v. Egan, 484 U.S. 518 (1988), federal courts lack juris-

diction to decide discrimination cases involving security

clearance decisions, and (2) Zeinali has not introduced any

evidence to satisfy his burdens under McDonnell Douglas

Corp. v. Green, 411 U.S. 792, 802-04 (1973), and Guz v.

Bechtel National, Inc., 8 P.3d 1089, 1113-14 (Cal. 2000).

We hold that we have jurisdiction to adjudicate Zeinali’s

discriminatory termination claim, as he does not dispute the

merits of the executive branch’s decision to deny his security

clearance application. Rather, he disputes the bona fides of

Raytheon’s professed security clearance requirement, and he

introduces evidence showing that Raytheon retained similarly

1

Zeinali’s other causes of action and claims of error are addressed in a

memorandum disposition filed contemporaneously with this opinion.

4454 ZEINALI v. RAYTHEON COMPANY

situated non-Iranian engineers who lacked security clear-

ances. We reverse the district court and hold that Zeinali’s

discrimination claim may proceed.

BACKGROUND

Raytheon hired Zeinali in November 2002 in the position

of “Senior Multi Disciplined Engineer.” Raytheon informed

Zeinali that this position required him to obtain a “Secret”-

level security clearance, and informed Zeinali that his contin-

ued employment was contingent on obtaining such clearance.

Although Zeinali’s initial request for an interim clearance was

rejected, Raytheon retained him while a final clearance deci-

sion was pending.

In November 2004, Zeinali transferred to a different engi-

neering position, “Senior Systems Engineer,” which, accord-

ing to Raytheon, also required a “Secret” clearance. Because

he still lacked the clearance, Zeinali performed the role of

cost account manager, which was “a financial oversight and

record-keeping job” that did not require him to use classified

information.

Following the November 2004 transfer, Zeinali received

positive feedback regarding his job performance. In 2006, one

of his supervisors gave him an “individual achievement

award[ ],” and another supervisor, Richard Zohn, testified that

Zeinali’s performance improved that year. Nevertheless, Zei-

nali was transferred again in the fall of 2006, both because of

his displeasure at not receiving a promotion and because of a

dispute in which a program manager failed to inform him

about a temporary budget change.

On September 26, 2006, the Department of Defense

informed Zeinali’s attorney that Zeinali’s request for a secur-

ity clearance had been denied by the Defense Office of Hear-

ings and Appeals. The cover letter noted that Zeinali could

not re-apply for at least one year. After Raytheon learned of

ZEINALI v. RAYTHEON COMPANY 4455

the denial, it conducted internal discussions regarding Zei-

nali’s future with the company. Ultimately, the engineering

department’s manager, David Robinette, recommended that

Zeinali be terminated. Raytheon fired Zeinali on November 7,

2006.

Robinette explained in his deposition that there were “mul-

tiple factors” motivating the decision to terminate Zeinali.

Zeinali’s “inability to obtain [a] security clearance was a

prime factor,” and was compounded by “the work forecast,”

which showed a lack of “long lived, . . . unclassified assign-

ments,” as well as “Zeinali’s work performance and feedback

. . . on [his] most recent work performance levels.” Ulti-

mately, though, Raytheon decided to terminate Zeinali

because he did not obtain a clearance. Robinette stated that if

Zeinali had received a clearance, he would not have been

fired in spite of the declining work forecast, or his unfavor-

able job performance.

Zeinali generally agrees with this outline of events, but

points to evidence that at least two non-Iranian engineers

were retained while Zeinali was fired. Based on this evidence,

he contends that he has satisfied his burdens under McDonnell

Douglas and Guz.

The district court granted Raytheon’s motion for summary

judgment, concluding that it lacked subject matter jurisdiction

“because [Zeinali’s] claims are premised on the denial of his

security clearance,” and, in the alternative, that Zeinali’s dis-

crimination claim failed on the merits because he was unqual-

ified for his position due to his lack of a security clearance.

JURISDICTION AND STANDARD OF REVIEW

The district court’s order granting Raytheon’s motion for

summary judgment is a final appealable order under 28

U.S.C. § 1291. We review the district court’s grant of sum-

mary judgment de novo, drawing all reasonable inferences in

4456 ZEINALI v. RAYTHEON COMPANY

Zeinali’s favor. Cmty. House, Inc. v. City of Boise, Idaho, 623

F.3d 945, 959 (9th Cir. 2010).

DISCUSSION

A. Security Clearances and Judicial Review

[1] As a preliminary matter, Raytheon contends that we

lack jurisdiction over Zeinali’s discrimination claim because

of our decision in Brazil v. U.S. Department of the Navy, 66

F.3d 193, 196 (9th Cir. 1995), which held that federal courts

may not “review . . . security clearance decisions made by the

Executive or his delegee . . . in the context of a Title VII dis-

crimination action.” For the reasons that follow, we disagree

with Raytheon’s expansive reading of Brazil.

[2] The rule stated in Brazil was drawn from the Supreme

Court’s holding in Department of the Navy v. Egan, 484 U.S.

518 (1988), that employment decisions based on the executive

branch’s security clearance decisions are not reviewable by

the administrative agency that adjudicates civil service dis-

putes. The plaintiff in Egan was a civilian employee involved

in maintaining a nuclear submarine, a job which required him

to possess a security clearance. Id. at 520. After his security

clearance request was denied, he was removed from his posi-

tion. Id. at 521-22. He appealed this employment decision to

the Merit Systems Protection Board, an administrative agency

which reviews whether government agencies have adequate

cause to terminate employees. Id. at 522, 530-31 (citing 5

U.S.C. §§ 7513, 7701). The dispute, as ultimately presented to

the Supreme Court, was whether the Board had the authority

to “examine the merits of the security-clearance denial . . . .”

Id. at 526.

The Court held that “the grant of security clearance to a

particular employee, a sensitive and inherently discretionary

judgment call, is committed by law to the appropriate agency

of the Executive Branch.” Id. at 527. “[T]he President[,] as

ZEINALI v. RAYTHEON COMPANY 4457

head of the Executive Branch and as Commander in Chief,”

has “authority to classify and control access to information

bearing on national security and to determine whether an indi-

vidual is sufficiently trustworthy to occupy a position in the

Executive Branch that will give that person access to such

information . . . .” Id. The executive’s decision to grant or

deny a security clearance requires the type of “[p]redictive

judgment” that “must be made by those with the necessary

expertise in protecting classified information.” Id. at 529.

Thus, “[f]or reasons too obvious to call for enlarged discus-

sion, the protection of classified information must be commit-

ted to the broad discretion of the agency responsible, and this

must include broad discretion to determine who may have

access to it.” Id. (alteration, citation, and internal quotation

marks omitted). Accordingly, the Court concluded that the

Merit Systems Protection Board, as an “outside nonexpert

body,” could not “review the substance of such a judgment

. . . .” Id.

We first examined Egan at length in Dorfmont v. Brown,

913 F.2d 1399 (9th Cir. 1990), where the Department of

Defense had revoked the plaintiff’s security clearance on the

grounds that she was a national security risk. Id. at 1400. The

plaintiff, who worked for a private contractor, filed suit

against the United States, the Secretary of Defense, and the

Director of the Department of Defense Legal Services

Agency, “seeking an injunction against the revocation of her

security clearance,” on the ground that the Department of

Defense’s decision violated her constitutional “rights to pro-

cedural and substantive due process.” Id. We explained that

although Egan’s holding was confined to the Merit Systems

Protection Board, “[t]he logic of that decision precludes judi-

cial review as well.” Id. at 1401 (emphasis added). “When it

comes to security matters, a federal court is ‘an outside non-

expert body.’ We have no more business reviewing the merits

of a decision to grant or revoke a security clearance than does

the [Merit Systems Protection Board].” Id. (quoting Egan,

484 U.S. at 529). We noted that “[a]lthough Dorfmont fash-

4458 ZEINALI v. RAYTHEON COMPANY

ions her claims as due process challenges,” her arguments

were in fact “attacks on the merits of the decision to lift her

security clearance.” Id. Accordingly, we held that “the district

court has no authority to review” these challenges to the mer-

its of the security clearance decision. Id. at 1402.2

Following Dorfmont, we issued the decision at the heart of

Raytheon’s current defense. In Brazil, we held that a plaintiff

is barred from bringing a Title VII employment discrimina-

tion claim to challenge an allegedly discriminatory security

clearance decision. Plaintiff Brazil, who was a civilian

employee stationed on a nuclear-equipped naval ship, was

required to hold a security clearance as a condition of his

employment. 66 F.3d at 195 & n.1. Based on Brazil’s “disci-

plinary and interpersonal problems,” the ship’s captain recom-

mended that the Navy revoke Brazil’s security clearance. Id.

at 195. Brazil then instituted Title VII proceedings, alleging

that the captain had discriminated against him on the basis of

race by recommending that his clearance be revoked. Id. We

held that Brazil was barred under Egan from challenging the

Navy’s security clearance decision. Id. at 196-97.3

We began our analysis by noting that “Egan prohibited . . .

outside administrative board review of security clearance

decisions,” and “Dorfmont extended [Egan’s] bar to judicial

review.” Id. at 196. Thus, “[a]lthough Brazil’s circumstances

may be compelling, he asks the court to do exactly what Egan

and Dorfmont forbid”—namely, for “the court to perform

2

The plaintiff also raised two arguments that did not implicate the mer-

its of the security clearance decision, and we held that she failed to state

a colorable claim that her constitutional due process rights had been

harmed. Id. at 1403.

3

We also held that Brazil was barred from bringing a constitutional

challenge under Bivens v. Six Unknown Named Agents of Fed. Bureau of

Narcotics, 403 U.S. 388 (1971), because “Title VII ‘provides the exclusive

judicial remedy for claims of discrimination in federal employment.’ ”

Brazil, 66 F.3d at 197 (quoting Brown v. Gen. Servs. Admin., 425 U.S.

820, 835 (1976)).

ZEINALI v. RAYTHEON COMPANY 4459

some review of the merits of the security clearance decision.”

Id. Brazil contended, however, that the “Title VII analysis

does not involve a review of the merits because it does not

require the court to determine whether the Navy’s reasons for

revoking his clearance were valid; it merely requires a deter-

mination of whether the proffered reasons were the actual rea-

sons.” Id. at 197. We disagreed because “[t]he more valid a

reason appears upon evaluation, the less likely a court will be

to find that reason pretextual; the converse is also true.” Id.

Thus, under the second step of the McDonnell Douglas

burden-shifting framework, “[i]t is impossible for the court

to” determine “whether the Navy’s proffered reasons were

legitimate without evaluating their merits.” Id. We also

explained that, even if the second step were satisfied, “it is

very likely to be impossible for [the court] to proceed to step

three and determine whether the given reasons were mere pre-

text without considering their merits.” Id. Ultimately, we con-

cluded that “the merit of such decisions simply cannot be

wholly divorced from a determination of whether they are

legitimate or pretextual.” Id.

In the fifteen years following our decision in Brazil, we

have not discussed the Egan-Dorfmont-Brazil line of cases in

a precedential opinion. Raytheon asks us to read these cases

broadly, arguing that the logic of “Egan bars discrimination

and wrongful termination claims where, as here, the denial of

a security clearance plays a central role,” and that under Egan

and its progeny, if “the denial of a security clearance is central

to the defense, the court lacks jurisdiction and the claims must

be dismissed.” Zeinali counters by arguing that “courts do

have jurisdiction to consider questions that do not involve the

merits of the security clearance decision itself, such as

whether in fact clearance was denied, . . . whether transfer to

a nonsensitive position may be feasible[,] . . . [and] ‘whether

the security clearance was a requirement for the job and thus

its denial was an appropriate cause for dismissal.’ ” (Alter-

4460 ZEINALI v. RAYTHEON COMPANY

ations and citation omitted, quoting Jamil v. Sec’y, Dep’t of

Def., 910 F.2d 1203, 1206 (4th Cir. 1990).4)

[3] We conclude that Zeinali has the better argument. The

core holdings of Egan, Dorfmont, and Brazil are that federal

courts may not review the merits of the executive’s decision

to grant or deny a security clearance. See, e.g., Brazil, 66 F.3d

at 196-97. In each of those three cases, the plaintiff (1)

brought suit against the government agency responsible for

the security clearance determination, and (2) directly chal-

lenged the agency’s decision to deny or revoke a security

clearance. None of these cases held that federal courts lack

jurisdiction over employment discrimination claims like the

ones in this lawsuit, which are brought against a private

employer who was not responsible for the executive’s security

clearance decision.

[4] The fundamental logic of Brazil is that in an employ-

ment discrimination claim against the agency that made the

security clearance decision, the second and third steps of the

McDonnell Douglas framework necessarily require an inquiry

into the defendant’s proffered reasons for the adverse employ-

ment decision. Id. at 197. Raytheon’s proposed approach is

particularly inappropriate in cases brought against private

employers, because such defendants are rarely responsible for

(or even substantially involved in) the government’s security

clearance decisions. But if the plaintiff sues a defendant for

allegedly discriminatory conduct that is merely connected to

the government’s security clearance decision, the concerns of

Egan are not necessarily implicated. We are therefore per-

suaded by the reasoning of the Third Circuit that federal

4

We note that the case quoted by Zeinali is not particularly helpful to

his cause, as that decision merely “reserv[ed] [the] ‘question of whether

Egan precludes courts from reviewing security clearance decisions’ for

Title VII discrimination.” Guillot v. Garrett, 970 F.2d 1320, 1324 n.9 (4th

Cir. 1992) (quoting Jamil, 910 F.2d at 1207). A subsequent case from that

circuit answered this question in the negative. Becerra v. Dalton, 94 F.3d

145, 149 (4th Cir. 1996).

ZEINALI v. RAYTHEON COMPANY 4461

courts have jurisdiction to decide claims that “do[ ] not neces-

sarily require consideration of the merits of a security clear-

ance decision,” as long as they remain vigilant not to

“question the motivation behind the decision to deny [the

plaintiff’s] security clearance.” Makky v. Chertoff, 541 F.3d

205, 213 (3d Cir. 2008).5

We have found no case in which a court has ever adopted

a bright-line rule as broad as the one suggested by Raytheon.

Raytheon’s approach would essentially immunize government

contractors from any liability in cases involving employees

whose security clearances are revoked or denied. Tellingly,

out of the numerous circuit court cases refusing to exercise

jurisdiction over security clearance-related claims,6 only two

5

Our sister circuits have adopted a similar approach and have held that

various types of security clearance-related claims are justiciable. The Fed-

eral Circuit (which reviews the decisions of the Merit Systems Protection

Board, and accordingly has issued a number of opinions on this issue) has

consistently read Egan as holding that “the Board may determine”—and

a court may review—“whether a security clearance was denied, whether

the security clearance was a requirement of the appellant’s position, and

whether the procedures set forth in [the applicable statute] were followed

. . . .” Romero v. Dep’t of Def., 527 F.3d 1324, 1328 (Fed. Cir. 2008)

(quoting Hesse v. Dep’t of State, 217 F.3d 1372, 1376 (Fed. Cir. 2000)).

This approach is supported by the text of Egan itself, which noted that the

parties agreed that the Board could review “the fact of denial, . . . the posi-

tion’s requirement of security clearance, and . . . the satisfactory provision

of the requisite procedural protections[.]” Egan, 484 U.S. at 526. Simi-

larly, other circuits have exercised jurisdiction over security clearance-

related claims premised on a mixed-motive theory of discrimination,

Makky, 541 F.3d at 213, a defendant agency’s failure to follow its own

regulations, Duane v. U.S. Dep’t of Def., 275 F.3d 988, 993 (10th Cir.

2002); Stehney v. Perry, 101 F.3d 925, 934-35 (3d Cir. 1996); Jamil, 910

F.2d at 1208, and constitutional challenges to the defendant agency’s

actions, Stehney, 101 F.3d at 936-37; see also Ryan v. Reno, 168 F.3d 520,

524 (D.C. Cir. 1999) (stating without holding that constitutional chal-

lenges are permissible); Dorfmont, 913 F.2d at 1402 (same).

6

E.g., El-Ganayni v. U.S. Dep’t of Energy, 591 F.3d 176, 186 (3d Cir.

2010); Hill v. White, 321 F.3d 1334, 1335-36 (11th Cir. 2003) (per

curiam); Ryan, 168 F.3d at 524; Becerra, 94 F.3d at 149; Perez v. F.B.I.,

71 F.3d 513, 514-15 (5th Cir. 1995) (per curiam).

4462 ZEINALI v. RAYTHEON COMPANY

published decisions involved private employers, and only one

of these cases even discussed Egan.7 In that case, Beattie v.

Boeing Co., 43 F.3d 559 (10th Cir. 1994), the plaintiff

brought a Bivens action alleging that his employer Boeing

caused him reputational harm, lost promotional opportunities,

and mental distress from on-the-job harassment, all of which

he suffered after Boeing refused to grant him access to the

secure worksite where Air Force One was being assembled.

Id. at 562. The court noted that Boeing’s contract with the

government “provided that the planes be constructed in a

secured area into which only persons with access clearance

could enter.” Id. at 560. The contracts also provided that only

the Air Force could grant “unescorted access” clearances, but

allowed Boeing to issue “escorted access” clearances. Id. The

contracts also required Boeing to use specific criteria to deter-

mine whether an employee could receive such clearances. Id.

The court held that, because the contract mandated the secur-

ity clearance requirements that allegedly caused the plaintiff’s

injury, Egan applied to bar the plaintiff’s claims. Id. at

565-66. The court acknowledged that its conclusion was

somewhat unusual because the case involved a private

7

The other published case involving a private employer, Blankenship v.

Martin Marietta Energy Sys. Inc., 83 F.3d 153 (6th Cir. 1996), is dis-

cussed infra, along with a similar unpublished case, Strong v. Orkand

Corp., 83 F. App’x 751 (6th Cir. 2003), which may be cited under Sixth

Circuit rules, see 6th Cir. R. 28(f) (“Citation of unpublished opinions is

permitted”). In both cases, the court exercised jurisdiction over the plain-

tiff’s employment discrimination claims.

We have also found a number of cases (all decided after Egan) in which

district courts exercised jurisdiction over employment discrimination

claims involving plaintiffs who were terminated on account of their fed-

eral security clearance status. See, e.g., Fields v. Aramark Facility Servs.,

Inc., 240 F. Supp. 2d 453, 453-54 (D. Md. 2003); Pascouau v. Martin

Marietta Corp., 994 F. Supp. 1276, 1282 (D. Colo. 1998); McCoy v. Pa.

Power & Light Co., 933 F. Supp. 438, 443-44 (M.D. Pa. 1996); McDaniel

v. AlliedSignal, Inc., 896 F. Supp. 1482, 1491 (W.D. Mo. 1995); Walker

v. Corr. Med. Sys., 886 F. Supp. 515, 519, 523 (W.D. Pa. 1995);

Karalewitz v. UE & C-Catalytic, 811 F. Supp. 311, 313, 318 (E.D. Mich.

1993).

ZEINALI v. RAYTHEON COMPANY 4463

employer, but held that the result was warranted under the

particular facts at issue:

To be sure, the case before us involves a private

party rather than a government agency. However,

Boeing’s limited authority to grant or deny escorted

access clearance derived solely from its contract

with the Air Force. Boeing’s authority was thus dele-

gated to it by the Air Force, and hence by the Execu-

tive Branch. We see no compelling reason to treat

the security clearance decision by Boeing differently

than the similar decision made by the Air Force.

Both decisions represent the exercise of authority

delegated by the Executive Branch and are entitled

to appropriate deference by the federal courts. There-

fore, we conclude that we may not review Boeing’s

action or that of the Air Force in denying [the plain-

tiff] access to the Air Force One area.

Id. at 566 (footnote and citations omitted).

[5] Beattie is, in many ways, the exception that proves the

rule that private employers can rarely avail themselves of

Egan’s jurisdictional bar. In employment discrimination suits

against private employers, courts can generally avoid examin-

ing the merits of the government’s security clearance deci-

sion. Raytheon’s broad reading of Egan and Brazil is

inappropriate in such cases.

[6] Here, Zeinali does not contend that the Department of

Defense (or any other agent of the executive branch) improp-

erly denied his application for a security clearance. Rather,

Zeinali contends that Raytheon’s security clearance require-

ment was not a bona fide job requirement,8 and that Raytheon

used the government’s security clearance decision as a pretext

8

Again, we note that the parties in Egan agreed that a job “position’s

requirement of security clearance” was reviewable. Egan, 484 U.S. at 526.

4464 ZEINALI v. RAYTHEON COMPANY

for terminating Zeinali in a discriminatory fashion. In order to

review Zeinali’s contentions in a full and fair manner, we

need not examine the merits of the government’s decision

regarding Zeinali’s security clearance. Rather, we need only

examine the employment decisions made by Raytheon. Egan

does not strip the courts of jurisdiction to make such determi-

nations.

[7] Accordingly, we hold that Egan does not bar our

review in this case. Because we need not inquire into the mer-

its or the motivations “behind the decision to deny [the plain-

tiff’s] security clearance,” Makky, 541 F.3d at 213, the district

court had jurisdiction under 28 U.S.C. § 1332(a)(1), and we

have jurisdiction under 28 U.S.C. § 1291.

B. The Employment Discrimination Claim

[8] As the parties’ central point of contention involved the

federal courts’ exercise of jurisdiction, we will explain only

briefly why Raytheon is not entitled to summary judgment.

Zeinali’s basic contention is that he has satisfied his summary

judgment burden by introducing evidence that Raytheon ter-

minated him while retaining at least two similarly situated

non-Iranian engineers who lacked security clearances. The

record and case law support Zeinali’s position.

[9] “ ‘[W]hen entertaining motions for summary judgment

in employment discrimination cases arising under state law,

federal courts sitting in diversity must apply the McDonnell

Douglas burden-shifting scheme as a federal procedural

rule.’ ” Dawson v. Entek Int’l, 630 F.3d 928, 934 (9th Cir.

2011) (quoting Snead v. Metro. Prop. & Cas. Ins. Co., 237

F.3d 1080, 1094 (9th Cir. 2001)). In order to defeat a defen-

dant’s motion for summary judgment on a discrimination

claim:

[T]he employee must first establish a prima facie

case of discrimination. If he does, the employer must

ZEINALI v. RAYTHEON COMPANY 4465

articulate a legitimate, nondiscriminatory reason for

the challenged action. Finally, if the employer satis-

fies this burden, the employee must show that the

reason is pretextual either directly by persuading the

court that a discriminatory reason more likely moti-

vated the employer or indirectly by showing that the

employer’s proffered explanation is unworthy of cre-

dence.

Id. at 934-35 (quoting Davis v. Team Elec. Co., 520 F.3d

1080, 1089 (9th Cir. 2008)). Under California law, a prima

facie case of discrimination requires the plaintiff to “provide

evidence that (1) he was a member of a protected class, (2) he

was qualified for the position he sought or was performing

competently in the position he held, (3) he suffered an adverse

employment action, such as termination, demotion, or denial

of an available job, and (4) some other circumstance suggests

discriminatory motive.” Guz, 8 P.3d at 1113. In light of the

similarities between FEHA and Title VII, courts routinely rely

on both California and federal case law. Id.; see also Brooks

v. City of San Mateo, 229 F.3d 917, 923 n.3 (9th Cir. 2000).

[10] There is no dispute that Zeinali was a member of a

protected class based on his national origin (Iranian), and that

he suffered an adverse employment action by being termi-

nated. The parties contest whether Zeinali was qualified for

his position and whether the circumstances of Raytheon’s ter-

mination suggest a discriminatory motive. In this regard, Zei-

nali has satisfied his burden by identifying evidence that

Raytheon’s security clearance requirement was not a bona

fide job requirement, and that Raytheon’s reliance on the

security clearance requirement was pretextual.

We note as a preliminary matter that it is undisputed that

Raytheon has consistently said that Zeinali’s positions

required a security clearance. Raytheon’s job listings, offer

letter, post-hiring conduct, internal documentation, and depo-

sition testimony, all suggest that Raytheon required its engi-

4466 ZEINALI v. RAYTHEON COMPANY

neers to hold security clearances. Were this the only evidence

presented to us, we would likely agree with Raytheon’s asser-

tion that a plaintiff such as Zeinali cannot succeed on a dis-

criminatory termination claim if he fails to meet basic job

qualifications. The language of FEHA explicitly permits

employers to take adverse employment actions “based upon

a bona fide occupational qualification.” Cal. Gov. Code

§ 12940. Thus, we suspect that the California courts would

agree with the Third Circuit’s observation that a surgeon can-

not prevail on a discriminatory termination claim if he “never

went to medical school.” Makky, 541 F.3d at 215. Applying

this common sense rule, the Third Circuit held that a Trans-

portation Security Administration agent had not made a prima

facie mixed-motive case (which, strictly speaking, was not

governed by the McDonnell Douglas burden-shifting analysis,

but is persuasive nonetheless) where his security clearance

had been suspended and he did “not dispute that his position

required him to have access to National Security Informa-

tion.” Id. at 216. Similarly, in a disability discrimination case,

the Sixth Circuit affirmed summary judgment for a nuclear

plant owner because it was undisputed “that without security

clearance, a person could not satisfy the requirements of any

job in the plant,” and the defendant had “never retained an

employee after the [Department of Energy] revoked the secur-

ity clearance.” Blankenship v. Martin Marietta Energy Sys.

Inc., 83 F.3d 153, 156 (6th Cir. 1996).

Despite these general rules, Zeinali introduces evidence

that raises a triable dispute regarding whether a security clear-

ance was in fact a “bona fide occupational qualification” for

Raytheon engineers. Cal. Gov. Code § 12940. In his deposi-

tion, Zeinali stated that two other individuals in professional

or engineering positions in San Diego lacked security clear-

ances. Raytheon’s designated agents testified that a software

engineer had his security clearance revoked for national

security reasons and an engineering section manager had his

clearance revoked for financial reasons. Neither of these

employees were Iranian or Middle Eastern, and they contin-

ZEINALI v. RAYTHEON COMPANY 4467

ued to work for at least four years between the revocation of

their clearances and the time of the Raytheon deposition.

[11] In light of the fact that Raytheon retained multiple

non-Iranian engineers after their security clearances were

revoked, Zeinali has raised triable disputes regarding (1)

whether security clearances were a bona fide requirement for

Raytheon engineers, and (2) whether Raytheon’s central pur-

ported reason for terminating him (his lack of a security clear-

ance) was pretextual. The Supreme Court’s McDonnell

Douglas opinion contains a salient observation about pretext:

“Especially relevant to such a showing [of pretext] would be

evidence that white employees involved in acts against [the

employer] of comparable seriousness to the [plaintiff’s dis-

ruptive protesting activities] were nevertheless retained or

rehired. [An employer] may justifiably refuse to rehire one

who was engaged in unlawful, disruptive acts against it, but

only if this criterion is applied alike to members of all races.”

McDonnell Douglas, 411 U.S. at 804. Analogously, in the

present case, Raytheon would certainly be justified in firing

employees who lack security clearances, “but only if this cri-

terion is applied alike to members of all races.” Id.; see also

Godwin v. Hunt Wesson, Inc., 150 F.3d 1217, 1220 (9th Cir.

1998) (holding that pretext is shown if other employees with

similar qualifications are treated more favorably).

Raytheon contends that the other engineers who lacked

clearances are not similarly situated to Zeinali because their

clearances were revoked, whereas Zeinali’s clearance was

denied. We have explained that “individuals seeking relief

must demonstrate, at the least, that they are similarly situated

to those employees in all material respects.” Moran v. Selig,

447 F.3d 748, 755 (9th Cir. 2006). Raytheon presents no evi-

dence or analogous legal authority to explain how a clearance

“revocation” is materially different from a clearance “denial.”

To sustain the purported distinction between security clear-

ance “revocations” and “denials,” Raytheon relies on David-

4468 ZEINALI v. RAYTHEON COMPANY

son v. Lockheed Martin, an unpublished case from the Eastern

District of Tennessee. See Davidson v. Lockheed Martin

Energy Sys., Inc., No. 3:06-CV-45, 2007 WL 1231686 (E.D.

Tenn. Apr. 26, 2007). The plaintiff in Davidson had been a

private security guard at a nuclear facility, but was fired after

the Department of Energy terminated her security clearance.

Id. at *1-2. She argued that certain “white employees were

treated more favorably” because they were retained after they

lost their security clearances. Id. at *7. The court concluded,

however, that these white employees were not similarly situ-

ated to the plaintiff because their clearances had been sus-

pended whereas the plaintiff’s clearance had been terminated.

Id. at *7-8. The court explained:

there is an important difference between the termina-

tion of a clearance and the suspension of a clearance.

If an individual’s clearance is suspended, [the com-

pany] continues to employ the individual but assigns

the individual to a position not requiring a clearance

pending [the Department of Energy’s] decision

whether to reinstate or to terminate the individual’s

clearance. If the individual’s suspended clearance is

later reinstated, the individual’s employment is con-

tinued. But if the individual’s clearance is termi-

nated, the individual’s employment is terminated.

Id. at *3. The court held that the plaintiff’s discrimination

claim failed as a matter of law because the plaintiff was

treated similarly to the two other employees whose clearances

had been terminated, and was not similarly situated to the

employees who had been retained while their clearances were

suspended. Id. at *7-8.9

9

Another case cited by Raytheon, Strong v. Orkand Corp., is similar.

There, the plaintiff failed to show that he had been treated in a disparate

manner, as the defendant took an “identical action . . . against [the plain-

tiff] for his inability to obtain security clearance” as it did against the

plaintiff’s similarly situated co-worker. 83 F. App’x at 753.

ZEINALI v. RAYTHEON COMPANY 4469

[12] Unlike the defendant in Davidson, Raytheon has not

identified any legal or factual distinction between Zeinali’s

clearance denial and the two non-Iranian engineers’ clearance

revocations. Absent any evidence from Raytheon establishing

that the two non-Iranian engineers’ clearance revocations

were materially different from Zeinali’s clearance denial,

Raytheon’s reliance on Davidson is unavailing. Zeinali has

introduced sufficient evidence from which a reasonable fact-

finder could conclude that Raytheon applied its security clear-

ance policy in a discriminatory manner.

CONCLUSION

We conclude that, even after Egan, federal courts have

jurisdiction over employment discrimination claims in which

the plaintiff does not dispute the merits of the government’s

security clearance decision. Here, the record shows that two

non-Iranian engineers were able to retain their positions for

over four years after having their clearances revoked. Ray-

theon’s failure to apply its purported security clearance

requirement in an evenhanded manner gives rise to an infer-

ence that its requirement is pretext for discrimination.

Accordingly, the judgment of the district court is

REVERSED and REMANDED.