Supreme Court approves background checks for contractors

By Robert Brodsky

January 20, 2011

The federal government can perform background checks on contract employees -- even those not involved in classified activities -- to determine their emotional stability and history with illegal drugs, the Supreme Court ruled on Wednesday.

In a unanimous decision, the high court held that NASA background checks of contractors at a California laboratory were tailored to the government's interests in managing its workforce and therefore did not violate the scientists' privacy.

As part of the 2004 Homeland Security Presidential Directive 12 -- which requires a standard identification card for all government employees and contractors -- NASA required scientists, engineers and administrative support staff to submit to background investigations. To receive an ID, workers were subject to scrutiny of their finances, personal life and health. Those who did not agree to the investigations faced termination.

But, 28 California Institute of Technology scientists, under contract with NASA at the Jet Propulsion Lab in Pasadena, Calif., found the inquiries intrusive and in 2007 they filed a lawsuit claiming NASA had violated their right to informational privacy.

Many of the contractors had worked at the lab, which produces satellites, rockets, spacecraft and telescopes, for decades without ever being subject to a background check because they did not deal with classified materials or have a security clearance.

The scientists challenged two specific NASA forms. The first asked whether they had used, possessed, supplied or manufactured illegal drugs. Applicants who answered "yes" were then asked to provide details on the types of substances, the nature of the activity and whether they received counseling or treatment.

A second form sought references to vouch for the contractors' financial integrity, previous violations of the law, mental or emotional stability, and "general behavior or conduct." NASA would then be authorized to collect information directly from schools, employers and landlords.

In 2008, the U.S. Court of Appeals for the 9th Circuit issued a preliminary injunction to halt the background checks. But on Wednesday the Supreme Court reversed the lower court's ruling and said the investigations could continue. Justice Samuel Alito wrote in the decision that the government has an interest in managing its internal operations and employing a competent, reliable workforce to carry out its business. The contractors' privacy, he said, was protected by federal nondisclosure laws.

"We reject the argument that the government, when it requests job-related personal information in an employment background check, has a constitutional burden to demonstrate that its questions are 'necessary,' " Alito wrote. "Government could not function" if every employment decision became a "constitutional matter," he said.

The ruling did not directly address whether the Constitution explicitly provides individuals with a right to informational privacy.

The ruling allows the background checks to continue, but does not mandate them. NASA has said it will work with the Justice Department to determine how to proceed.

"NASA is still reviewing the decision; however, we are pleased that the Supreme Court has upheld, without dissent, the constitutionality of the challenged background checks," spokesman Michael Braukus said in a statement.

Since the appeals court injunction remains in place, there will be no immediate impact on the status of any Jet Propulsion Lab employee's badge as a result of the decision, Braukus said. "NASA will coordinate closely with the Department of Justice to ensure further actions remain consistent with the decision and other pertinent laws and regulations," he said.

Robert Nelson, a lead plaintiff in the case and a senior research scientist at the Jet Propulsion Lab, said he was disappointed with the decision and suggested that the Justice Department had offered "prejudicial arguments which were false and untrue" to the Supreme Court.

Nelson is taking a wait-and-see approach with the background checks before deciding his next step. But, he suggested that some of his NASA colleagues "could go to work someplace else" based on the court decision.

Megan Winter, an attorney with the labor and employment law firm of Fisher & Phillips, said the ruling could have implications for all federal, state and local government contractors.

"Going forward, the government has wide range and latitude to ask a lot of personal questions," Winter said.

But she added the decision was unlikely to have an immediate effect, noting in most instances, contracts probably would be amended when they came up for renewal to mandate the enhanced background checks.

By Robert Brodsky

January 20, 2011