*546 OPINION
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 terminating 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,
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 situated non-Iranian engineers who lacked security clearances. 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 continued 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 decision was pending.
In November 2004, Zeinali transferred to a different engineering position, “Senior Systems Engineer,” which, according 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, Zeinali 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 security clearance had been denied by the Defense Office of Hearings and Appeals. The cover letter noted that Zeinali could not re-apply for at least one year. After Raytheon learned of the denial, it conducted internal discussions regarding Zeinali’s future with the company. Ultimately, the engineering department’s manager, David Robinette, recommended that Zeinali be terminated. *547 Raytheon fired Zeinali on November 7, 2006.
Robinette explained in his deposition that there were “multiple 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 assignments,” as well as “Zeinali’s work performance and feedback ... on [his] most recent work performance levels.” Ultimately, 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 unfavorable 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 discrimination claim failed on the merits because he was unqualified 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 summary judgment de novo, drawing all reasonable inferences in Zeinali’s favor.
Cmty. House, Inc. v. City of Boise, Idaho,
DISCUSSION
A. Security Clearances and Judicial Review
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,
The rule stated in
Brazil
was drawn from the Supreme Court’s holding in
Department of the Navy v. Egan,
*548
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,
We first examined
Egan
at length in
Dorfmont v. Brown,
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 discrimination 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.
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, “[although Brazil’s circumstances may be compelling, he asks the court to do exactly what Egan and Dorfmont forbid” — namely, for “the court to perform 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 determination of whether the proffered reasons were the actual reasons.” 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 pretext without considering their merits.” Id. Ultimately, we concluded 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-Dorfmontr-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.’ ” (Alterations and citation omitted, quoting
Jamil v. Sec’y, Dep’t of Def.,
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
*550
security clearance.
See, e.g., Brazil,
The fundamental logic of
Brazil
is that in an employment 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 employment 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 persuaded by the reasoning of the Third Circuit that federal courts have jurisdiction to decide claims that “do[] not necessarily require consideration of the merits of a security clearance decision,” as long as they remain vigilant not to “question the motivation behind the decision to deny [the plaintiffs] security clearance.”
Makky v. Chertoff,
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 published decisions involved private employers, and only one of
*551
these cases even discussed Egan,
7
In that case,
Beattie v. Boeing Co.,
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 delegated to it by the Air Force, and hence by the Executive 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. Therefore, we conclude that we may not review Boeing’s action or that of the Air Force in denying [the plaintiff] access to the Air Force One area.
Id. at 566 (footnote and citations omitted).
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 examining the merits of the government’s security clearance decision. Raytheon’s broad reading of Egan and Brazil is inappropriate in such cases.
Here, Zeinali does not contend that the Department of Defense (or any other agent of the executive branch) improperly denied his application for a security clearance. Rather, Zeinali contends that Ray *552 theon’s security clearance requirement was not a bona fide job requirement, 8 and that Raytheon used the government’s security clearance decision as a pretext 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 determinations.
Accordingly, we hold that
Egan
does not bar our review in this case. Because we need not inquire into the merits or the motivations “behind the decision to deny [the plaintiffs] security clearance,”
Makky,
B. The Employment Discrimination Claim
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 terminated him while retaining at least two similarly situated non-Iranian engineers who lacked security clearances. The record and case law support Zeinali’s position.
“ ‘[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,
[T]he employee must first establish a prima facie case of discrimination. If he does, the employer must articulate a legitimate, nondiscriminatory reason for the challenged action. Finally, if the employer satisfies this burden, the employee must show that the reason is pretextual either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer’s proffered explanation is unworthy of credence.
Id.
at 934-35 (quoting
Davis v. Team Elec. Co.,
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 terminated. The parties contest whether Zeinali was qualified for his posi *553 tion and whether the circumstances of Raytheon’s termination suggest a discriminatory motive. In this regard, Zeinali 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 deposition testimony, all suggest that Raytheon required its engineers to hold security clearances. Were this the only evidence presented to us, we would likely agree with Raytheon’s assertion that a plaintiff such as Zeinali cannot succeed on a discriminatory 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 cannot prevail on a discriminatory termination claim if he “never went to medical school.”
Makky,
Despite these general rules, Zeinali introduces evidence that raises a triable dispute regarding whether a security clearance was in fact a “bona fide occupational qualification” for Raytheon engineers. Cal. Gov.Code § 12940. In his deposition, Zeinali stated that two other individuals in professional or engineering positions in San Diego lacked security clearances. 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 continued to work for at least four years between the revocation of their clearances and the time of the Raytheon deposition.
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 purported reason for terminating him (his lack of a security clearance) 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 [plaintiffs disruptive protesting activities] were nevertheless retained or rehired. [An employer] may
*554
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,
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,
To sustain the purported distinction between security clearance “revocations” and “denials,” Raytheon relies on
Davidson 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,
there is an important difference between the termination of a clearance and the suspension of a clearance. If an individual’s clearance is suspended, [the company] 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 continued. But if the individual’s clearance is terminated, the individual’s employment is terminated.
Id. at *3. The court held that the plaintiffs 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
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 *555 introduced sufficient evidence from which a reasonable factfinder could conclude that Raytheon applied its security clearance 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. Raytheon’s failure to apply its purported security clearance requirement in an evenhanded manner gives rise to an inference that its requirement is pretext for discrimination. Accordingly, the judgment of the district court is
REVERSED and REMANDED.
Notes
. Zeinali’s other causes of action and claims of error are addressed in a memorandum disposition filed contemporaneously with this opinion.
. The plaintiff also raised two arguments that did not implicate the merits 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.
. We also held that Brazil was barred from bringing a constitutional challenge under
Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics,
. 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,
. Our sister circuits have adopted a similar approach and have held that various types of security clearance-related claims are justiciable. The Federal 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.,
.
E.g., El-Ganayni v. U.S. Dep’t of Energy,
. The other published case involving a private employer,
Blankenship v. Martin Marietta Energy Sys. Inc.,
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 federal security clearance status.
See, e.g., Fields v. Aramark Facility Servs., Inc.,
. Again, we note that the parties in
Egan
agreed that a job “position’s requirement of security clearance” was reviewable.
Egan,
. 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 plaintiff] for his inability to obtain security clearance” as it did against the plaintiff’s similarly situated co-worker. 83 Fed Appx. at 753.
