NASA v. Nelson (09-530)

Oral argument: Oct. 5, 2010

Appealed from: United States Court of Appeals for the Ninth Circuit (June 20, 2008)

INFORMATIONAL PRIVACY, EMPLOYMENT BACKGROUND CHECK, NASA

Twenty-eight federal contractors working at the Jet Propulsion Laboratory at the California Institute of Technology sued the National Aeronautics and Space Administration, alleging that NASA’s requirement that employees undergo a National Agency Check with Inquiries investigation violated their right to informational privacy. The contractors specifically alleged that the information sought was overly broad and unrelated to their abilities as employees. The government claimed that the information requested was relevant to the government’s security concerns and that safeguards helped ensure that the information collected was not susceptible to public disclosure. The Ninth Circuit issued a preliminary injunction, finding that the government’s inquiries were not sufficiently tailored to a legitimate government interest. The Supreme Court’s decision will reflect its view on the correct balance between the interest of the government, as an employer, in preventing security risks, and the interest of individuals in protecting personal information.

Questions presented

1. Whether the government violates a federal contract employee's constitutional right to informational privacy when it asks in the course of a background investigation whether the employee has received counseling or treatment for illegal drug use that has occurred within the past year, and the employee's response is used only for employment purposes and is protected under the Privacy Act, 5 U.S.C. 552a.

2. Whether the government violates a federal contract employee's constitutional right to informational privacy when it asks the employee's designated references for any adverse information that may have a bearing on the employee's suitability for employment at a federal facility, the reference's response is used only for employment purposes, and the information obtained is protected under the Privacy Act, 5 U.S.C. 552a.

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Issue

Does the federal government violate a contract employee’s right to informational privacy by requiring the employee to disclose history of illegal drug use and any drug-related counseling received in the previous year or by asking references to supply any adverse information that they may have about the employee when the responses to these questions are used only for employment purposes?

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Facts

The National Aeronautics and Space Administration (“NASA”) owns the Jet Propulsion Laboratory (“JPL”), a space exploration and research facility. See Brief for Petitioners, National Aeronautics and Space Administration, et al. at 2–3. The California Institute of Technology (“Caltech”) operates JPL pursuant to a contract with NASA. See Nelson v. NASA, 530 F.3d 865, 870 (9th Cir. 2008). Caltech directly employs all JPL staff, including the Respondents in this case, who are low-risk contract employees that do not work with classified material. See id. Like other federal agencies, NASA has always required its civil servant employees to undergo a National Agency Check with Inquiries (“NACI”) investigation. See id. at 871. However, before 2007, NASA did not require low-risk contract employees of JPL to undergo NACI investigations. See id. As part of a revision to its security policies, on January 29, 2007, over Caltech’s objections, NASA unilaterally modified its contract with Caltech to require that all contract employees of JPL undergo a NACI investigation. See id. at 871–72. Caltech implemented the change, and adopted a policy, not mandated by NASA, that considered the failure of a JPL employee to successfully complete a NACI investigation as a voluntary resignation of employment with Caltech. See id. at 872.

NACI is a required background check for all United States civil service employees. See Nelson v. NASA, 530 F.3d at 870. The applicant must submit Standard Form 85 (“SF-85”) which requires employment, residential, military, and educational histories, references, and disclosure of illegal drug use, manufacture, sales, or possession within the past year, the nature of that drug contact, and whether the applicant obtained treatment or counseling. See id. at 870–71. Each employer, landlord, or reference listed receives Form 42, which requests an explanation of any adverse information the recipient may know about the applicant, including financial integrity, alcohol or drug abuse, employment, mental or emotional stability, conduct and behavior, activities, or “other matters.” See id. at 871. NASA and the Office of Personnel Management collect this information to determine whether the applicant is suitable for employment. See id. at 871.

On August 30, 2007, Robert M. Nelson and other JPL low-risk contract employees filed suit in the United States District Court for the Central District of California, alleging that the mandatory NACI investigations violate their constitutional right to informational privacy, that the NACI investigations constitute an unreasonable search under the Fourth Amendment, and that NASA did not have the authority under the Administrative Procedure Act (“APA”) to require low-risk contract employees undergo a NACI investigation. See Nelson v. NASA, 530 F.3d at 872. The JPL staff moved for a preliminary injunction against the new regulation on the grounds that failure to comply would result in losing their jobs. See id. The district court denied the motion and rejected the Plaintiffs’ Fourth Amendment and APA claims. See id. The district court further determined that while NACI investigations implicated their constitutional right to informational privacy, it was narrowly tailored to a legitimate governmental security interest. See id.

On appeal, the United States Court of Appeals for the Ninth Circuit agreed with the district court with respect to the Fourth Amendment and APA claims, but reversed on the informational privacy claim, holding that the plaintiffs had raised a serious legal claim, and granted their preliminary injunction. See Nelson v. NASA, 530 F.3d at 883. The Supreme Court granted certiorari on March 8, 2010. See NASA v. Nelson, 130 S.Ct. 1755 (2010).

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Discussion

The Supreme Court's decision in this case could potentially alter the way in which public entities as well as private companies conduct background checks on employees. The Court's opinion will also clarify the scope of the constitutional right to informational privacy.

Privacy Interests

Respondents, including lead plaintiff Robert M. Nelson (collectively "Nelson"), argue that implementing mandatory NACI investigations for low-risk contract employees will violate the contract employees’ constitutional right to informational privacy because Form 42's open-ended questions could elicit wide-ranging information about private medical, psychological, financial, or sexual matters which do not involve security or identity verification. See Brief for Respondents, Robert M. Nelson, et al. at 10, 12. NASA argues that the collection of such information for purposes of making employment decisions is routine and necessary to the government when acting as an employer. See Brief for Petitioners, National Aeronautics and Space Administration, et al. at 26. Furthermore, NASA argues, the all of the information that would be collected under the new procedures is protected under the Privacy Act. See id. at 28.

The Union of Concerned Scientists ("UCS") argues that requiring low-risk contract employees at JPL to undergo an intrusive NACI investigation may dissuade talented scientists from seeking employment at JPL and other federally funded research organizations at all. See Brief of Amicus Curiae Union of Concerned Scientists (“UCS”) in Support of Respondents at 20. The American Astronomical Society (“AAS”) argues further that driving researchers in astronomy away from employment with NASA and its centers with unnecessary intrusions into their privacy will ultimately threaten the leadership of the U.S. in the fields of astronomy and space exploration. See Brief of Amicus Curiae American Astronomical Society in Support of Respondents at 10–11.

The Consumer Data Industry Association (“CDIA”) argues that the type of background information collection that NACI accomplishes is routinely used in a variety of employment settings, and that such information collection is necessary to employers when screening potential employees and making employment decisions. See Brief of Amicus Curiae Consumer Data Industry (“CDIA”), et. al., in Support of Petitioners at 4–5. CDIA argues that making all governmental employment decisions subject to constitutional right to informational privacy would increase disruptive litigation and would hamper the efficient operation of federal, state and local governments. See id. at 12–13.

Security Concerns

NASA argues that ensuring the security of their information and facilities is important and that requiring contractors to pass the NACI will improve the security of their facilities. See Brief for Petitioners at 11. NASA points out that all non-contract civil service employees must complete a NACI investigation and NASA asserts that JPL staff have jobs substantially similar to those of non-contract employees at NASA. See id. at 35. In particular, NASA emphasizes the importance of having contract employees at JPL undergo NACI because of the nature of JPL’s work and the scope of its funding; JPL is one of the premier robotics and space research facilities, is staffed solely by contract employees, and its taxpayer-funded budget exceeds $1.5 billion annually. See id. at 3536. CDIA contends that the use of open-ended questioning and background screening such as NACI, as opposed to narrowly targeted questions, are the most efficient way for employers to uncover relevant information that is necessary to make informed and secure employment decisions. See Brief of CDIA at 5–6.

Nelson argues that NASA’s security interests in screening JPL employees using NACI investigations is overblown, and that the JPL is more like an educational facility than a sensitive federal facility requiring strict security measures. See Brief for Respondents at 2. Nelson argues that their work does not pose a security risk because it is in the public domain, is not classified, and does not relate to national security. See id. UCS agrees and emphasizes that JPL is not directly controlled by NASA or the federal government, and was set up to be an independent research facility that benefited from government funding. See Brief of UCS at 19–20. UCS argues that by allowing NASA to require JPL employees to undergo NACI investigations, the independence of all federally funded research facilities like JPL will be compromised. See id.

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Analysis

Background

NASA relies on two Supreme Court cases in arguing that the Constitution does not prohibit it from requiring that contract employees of JPL undergo NACI background checks. See Brief for Petitioners, NASA, et al. at 20–21. In the first case, Whalen v. Roe, which involved the government’s collection of information about prescription drug users, the Court differentiated between information gathered for government use and information shared with the public. See Whalen v. Roe, 429 U.S. 589 (1977). The second case, Nixon v. Administrator of General Services, involved the attempted review of President Nixon’s official papers and private matters as a means to archive the business-related papers. Nixon v. Adm’r of Gen. Servs, 433 U.S. 425 (1977). NASA interprets these two cases as standing for the Court’s allowance of mandatory reporting of private information, even where it affects constitutional rights. See Brief for Petitioners at 25. NASA argues that the courts, in considering the constitutionality of governmental information gathering, must consider the safeguards implemented to prevent disclosure and whether an individual has already shared the information with the public. See id. at 25–26.

On the other hand, Nelson contends that Whalen and Nixon stand for the proposition that individuals have the right to prevent public disclosure of private matters. See Brief for Respondents, Nelson, et al. at 16. Although the Supreme Court has not commented on the breadth of informational privacy, the circuit courts agree that the right applies to medical information. See id. at 17–18. Therefore, Nelson argues that cases involving medical information invoke heightened scrutiny and require courts to balance the interest of the individual in withholding the information against the interest of the government in obtaining the information. See id. at 18.

The Relevance of Form SF-85’s Drug Treatment Question

The Ninth Circuit held that it was acceptable for NASA to ask whether an individual has used illegal substances. See Brief for Petitioners at 39. But the court found that inquiries into whether an individual has sought treatment for the use of illegal drugs invoke a constitutionally protected right to informational privacy and that the government failed to justify its interest in obtaining such information. See id. Nelson agrees, stating that the right to informational privacy clearly protects medical treatment information. See Brief for Respondents at 20–21. Nelson claims that medical history in general is a private matter and that treatment information is especially sensitive because it applies a stigma to individuals, who may avoid counseling if they fear disclosure of the information. See id. at 21. Nelson warns that this concern is especially apparent in employment settings, where treatment disclosure may make it more difficult for an individual to find a job. See id. at 22.

NASA contends that the Ninth Circuit applied an overly broad definition of informational privacy by failing to first examine whether the asserted right was fundamental and thus entitled to constitutional protection. See Brief for Petitioners at 48–49. NASA contends that the courts have not previously recognized drug treatment as a core concern that invokes a right to informational privacy under the Due Process Clause, such as marriage or procreation. See id. at 39–40.

NASA argues that it has a legitimate interest in knowing whether an individual is dealing with continuing substance abuse because it may affect an individual’s ability to fulfill his or her work responsibilities. See Brief for Petitioners at 40. But Nelson argues that the government does not explain how this information helps determine employability. See Brief for Respondents at 26. Rather, Nelson claims that this concern is best addressed by asking simply whether the applicant is currently using drugs, an inquiry the Ninth Circuit has already found to be constitutional. See id.

The government also argues that knowledge of an applicant’s treatment history may prevent discrimination, because the Rehabilitation Act of 1973 states that past abusers who have undergone treatment may be considered disabled. See Brief for Petitioners at 43. Nelson argues that the government has not explained how this information prevents discrimination and that such inquiries seem to only increase the likelihood that an applicant will face discrimination by potential employers. See Brief for Respondents at 27. Additionally, Nelson argues that employers are not permitted to seek treatment information unless the employer has objective evidence that leads it to reasonably believe that the employee will be unable to perform at work or that the disability creates a direct threat. See id.

The Scope of Form 42

NASA disagrees with the Ninth Circuit’s finding that the use of Form 42 is unconstitutional on the grounds that it asks broad questions that are not tailored to the government’s informational needs. See Brief for Petitioners at 44. NASA claims that the questions confirm information already provided by the individual and seek only to verify and assess an individual’s assertions and character. See id. at 44–45. NASA argues that employers have a long tradition of using background checks to verify applications. See id. at 34–35. NASA contends that government checks like this one are especially important because JPL is a premier research facility, funded by American taxpayers and staffed entirely with contractors. See id. at 35–36. The government claims that it must acquire background information on such employees because the contractors have significant access to NASA facilities and are responsible for advanced and critical tasks. See id. at 36–37.

NASA argues that the explicit scope and rationale of these forms discounts Nelson’s contention that the government may collect information unrelated to employment capabilities. See id. at 32. Additionally, NASA points out that the Privacy Act prohibits the collection of information unrelated to employment, and only allows governmental agencies to collect information that is “necessary and relevant” to the government’s purpose. See id. at 45. NASA also claims that the fact that the applicant has already disclosed the information to others weakens any alleged privacy claims. See id. at 47.

Nelson contends that NASA seeks information beyond that which is necessary to determine employability. See Brief for Respondents at 29–30. NASA uses a suitability matrix to make employment decisions, and this matrix, according to Nelson, enables NASA to look into highly sensitive matters, including private sexual matters, and to gather information from any source, not just the applicants and listed references. See id. If NASA sincerely wished to ensure the narrow scope of its inquiries, Nelson claims that the government should be required to explicitly guarantee that it will not use the matrix. See id. at 33. Nelson argues that the broad scope of the inquiries is especially difficult to justify in this case because he is already a JPL employee. See id. at 34–35. Caltech already performed the standard background and reference checks prior to offering him a job. See id. at 52. Finally, Nelson contends that the fact that he previously disclosed certain information to others does not weaken his privacy claims. See id. at 53. On the contrary, claims Nelson, in Nixon, the Court held that informational privacy rights likewise apply to communications with third parties. See id. at 55.

Public Disclosure v. Internal Use

NASA contends that the privacy interest in withholding the information is weakened by the fact that the government intends to use the information for its own purposes, and not for public dissemination. See Brief for Petitioners at 48–49. Moreover, NASA claims that safeguards ensure that the government’s collection of information will not result in public disclosure. See id. at 50–51. First, NASA has explicitly stated that all the background information it gathers is protected by the Privacy Act. See id. at 27. The Act allows federal agencies to collect only necessary information and prohibits disclosure of this information to anyone outside of the agency without consent or a statutory exception. See id. at 28. If privacy is breached, individuals are afforded civil remedies and agency employees may be held criminally liable. See id. Moreover, the Commerce Department and the Office of Management and Budget provide additional protections, including technological standards, oversight positions, and sanctions against violators. See id. at 29–30.

Nelson contends that the protections provided by Whalen and Nixon apply to the government’s collection of private information, and are not limited to material intended for public dissemination. See Brief for Respondents at 36. Nelson claims that lack of public dissemination does not eliminate an individual’s privacy interest, but simply provides another factor to consider when balancing the interests of the government and the individual. See id. at 38. Additionally, Nelson contends that the Privacy Act does not provide sufficient safeguards because it includes exceptions whereby employers may release information in any way that is related to the original reasons for collection. See id. at 43. Additionally, NASA can provide the information to any potential source from whom it seeks background information. See id. at 44. Nelson argues that while the Act may allow damages for improper disclosure, it provides no mechanism whereby an individual may petition the government to keep the information private. See id.

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Conclusion

This case will determine whether requiring low-risk contract employees of a federally funded research facility to undergo National Agency Check with Inquiries investigations violates the employees’ informational privacy rights. The outcome of this case will have a significant impact on the way the federal government hires contract employees, and may have implications for state and local governments, as well as the private sector.

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Authors

Prepared by: Melissa Koven and Sarah Pruett

Edited by: Eric Johnson

Additional Sources

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