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Corporate Counsel Section Website › Newsletters › The Business Lawyer, February 2011 › Supreme Court Issues Significant Ruling on Employee Background Checks

Supreme Court Issues Significant Ruling on Employee Background Checks

Article Date: Wednesday, February 16, 2011

Written By: Andrew Murphy

On Jan. 19, 2011, the United States Supreme Court issued an opinion that provides new insights on employers' rights to conduct background checks on their employees. The case, National Aeronautics & Space Administration v. Nelson, involved a challenge by a group of civilian employees who work at NASA's Jet Propulsion Laboratory (which is famous for its work on many of the nation's highest profile space missions, including the Mars Rovers) to questions that NASA asked during employee background checks. Specifically, the employees objected to a question on a form that each employee was required to complete that asked whether the employee had "used, possessed, supplied or manufactured illegal drugs" in the past year, and, if so, whether they had received any "treatment or counseling." The employees also objected to certain open-ended questions on a form NASA sent to references the employees had designated during the application process that asked, among other things, whether the reference had "any reason to question" the employee's honesty or possessed any "adverse information" about the employee's "general behavior or conduct."

Because these questions were asked by the federal government and not a private employer, the employees were uniquely positioned to argue that the questions violated their rights to privacy under the United States Constitution. (As a general matter, private employers do not have to comply with the Constitution and are instead regulated by statutes, such as Title VII and the Americans with Disabilities Act.) But the court brushed the employees' constitutional argument aside and instead decided the case in a way that implicitly recognized the rights of all employers to conduct employee background checks.

The court found that the government, "[l]ike any employer," is entitled to hire employees who are "reliable, law-abiding persons" and that questions "about illegal-drug use are a useful way of figuring out which persons have these characteristics."

With regard to whether NASA had gone too far in asking broad, open-ended questions to employees' designated references, the court concluded that such questions are "an appropriate tool for separating strong candidates from weak ones." Indeed, the court found that requiring employers to ask more narrowly tailored questions would be a "truly daunting task" because of the difficulty in coming up with a "laundry list" of questions that would capture all of the "reasons why a person might not be suitable for a particular job."

At a time when prospective employees are increasingly sensitive about disclosing their backgrounds, the Supreme Court's ruling represents a victory for employers who need such information to make informed hiring decisions. Notably, however, the opinion does not provide any additional protections to employers who disclose information about past employees in response to a reference request, so employers should continue to use caution when disclosing any such information. And employers, of course, still need to ensure that information about an employee's background is kept confidential and shared only with those persons who need it. But provided such protections are in place, the Supreme Court's opinion represents a broad affirmation of employers' rights to obtain information about the persons they hire.

The Supreme Court is expected to issue a series of additional rulings in high-profile employment law cases in the months ahead.

Andrew Murphy is an attorney with Baker and Daniels, LLP. Andrew concentrates his practice on representing companies in both employment and general litigation. He can be reached at (574) 239-1964 or andrew.murphy@bakerd.com.

This article previously appeared at www.bakerdaniels.com and is reprinted here with permission.
Views and opinions expressed in articles published herein are the authors' only and are not to be attributed to this newsletter, the section, or the NCBA unless expressly stated. Authors are responsible for the accuracy of all citations and quotations.