Employment Law Report

NASA v Nelson: Do Employees Have Informational Privacy?

by Courtney Ross Samford

NASA’s workforce includes tens of thousands of employees.  Historically, most of those employees have been civil servants who were required to undergo a background check as a condition of employment.  However, as part of the 9/11 Commission’s recommendations to the President in 2004, it was suggested that all federal employees, including contract employees, submit to the same type of background check. The Department of Commerce implemented the proposal, and all long-term contract employees were required to complete a standard background check by October of 2007.  Frustrated by the intrusion, a group of contract employees from the Jet Propulsion Laboratory (JPL) in Pasadena, California refused to comply with the new mandate and brought suit.  The basis of their claim was that mandatory screening, referred to as the National Agency Check with Inquires (NACI) process, violated their constitutional right to informational privacy.

On January 19, 2011, U.S. Supreme Court published its decision in their case, NASA v. Nelson, 2011 WL 148254 (2011), upholding NASA’s mandatory background check process.  Without deciding whether the NACI process actually violates an individual’s constitutional right to informational privacy recognized in Whalen v. Roe, 429 U.S. 589 (1977) and Nixon v. Administrator of General Services, 433 U.S. 425 (1977), the Court held that the background checks at issue were reasonable.  Justice Alito explained that “the Government’s interests as employer and proprietor in managing its internal operations, combined with the protection provided by the Privacy Act of 1974, 5 U.S.C. § 552a, satisfy any ‘interest in avoiding disclosure’ that may ‘arguably ha[ve] its roots in the Constitution.” Id. at *4 (quoting Whalen, 429 U.S. at 599, 605).

This decision will likely have significant implications for private, as well as governmental, employers.  First, as the Court mentioned in a footnote, more than 88% of U.S. companies perform background checks on their employees.  These employers should assess their current background check policies to ensure that they are reasonable and tailored to fit their individual needs.  For example, the Court recognized that inquiry into an employee’s prior illegal drug use is reasonable because all employers are entitled to have a reliable, efficient, and effective workforce.  See id. at *10.  Given this relatively low threshold, it appears that most, if not all employers, would be able to establish an interest in creating and maintaining a similar workforce.  Troubling, though, is how an employer making such an inquiry would avoid violating the ADA, which expressly protects employees with a history of substance abuse.

Second, Justice Scalia noted in his concurrence that the Nelson decision “will dramatically increase the number of lawsuits claiming violations of the right to informational privacy.”  Id. at 20.  In fact, Justice Scalia even characterized the decision as “a generous gift to the plaintiff’s bar” because of all the litigation it will produce. Id. Consequently, employers should be cognizant of this possibility and fully prepared to defend their use of background checks should it be challenged.

Finally, employers must be diligent in protecting personal and intimate information that can sometimes be revealed through a background check.  As part of its decision to uphold the NACI process, the Court emphasized the “substantial protections against disclosure to the public” afforded by the Privacy Act of 1974. Id. at *12. Among other requirements, the Privacy Act requires written consent before the Government may reveal any private information obtained in a background check and imposes criminal liability for the willful disclosure of such information.  Therefore, employers should use the Nelson case as a reminder to treat the personal information of  employees with the upmost care and protection to prevent future liability.

Courtney Ross Samford
Courtney Samford is a member of the Firm’s Litigation and Dispute Resolution Service Team. She concentrates her practice in commercial litigation, labor & employment and higher education. Read More