Earlier this week, the United States Supreme Court in NASA v. Nelson (pdf) upheld the National Aeronautics and Space Administration’s (NASA) right to conduct reasonable background checks on the employees of government contractors. While the case focused on the scope of background checks conducted by the federal government, the Court’s ruling provides some useful guidance for private employers as well.

The case arises from NASA’s decision to unilaterally amend its contract with the California Institute of Technology (“Caltech”) — which operates the Jet Propulsion Laboratory (JPL) for NASA — to require that all JPL employees working at JPL undergo broad background checks. In addition to requesting relatively basic background information, the background check asks whether the employee has “used, possessed, supplied, or manufactured illegal drugs” in the last year. If the answer is “yes,” the employee must provide information about “any treatment or counseling received,” which, according to NASA, would be used only as a mitigating factor.

As part of the background check, the government also sends form questionnaires to the employee’s former employers, schools, landlords, and references. The form questionnaire asks whether the reference has “any reason to question” the employee’s “honesty or trustworthiness.” It further seeks “adverse information” about the employee’s “violations of the law,” “financial integrity,” “abuse of alcohol and/or drugs,” “mental or emotional stability,” and “general behavior or conduct.” The questionnaire then provides the reference the ability to provide “additional information” — derogatory or favorable — that may bear on “suitability for government employment or security clearance.”

The Supreme Court reversed the Ninth Circuit’s ruling that these questions violated JPL employees’ constitutional right to privacy. The Court assumed, without deciding, that the Constitution recognizes a “privacy ‘interest in avoiding disclosure of personal matters.’’ The Court, nonetheless, found no privacy violation. The Court reasoned that inquiries into drug treatment or counseling were a reasonable follow-up to questions about illegal drug use and noted that these same questions were part of a standard background check used by millions of private employers: “Like any employer, the government is entitled to have its projects staffed by reliable, law-abiding persons who will ‘efficiently and effectively’ discharge their duties. . . . Questions about illegal drug use are a useful way of figuring out which persons have these characteristics.” Similarly, open-ended inquiries about job suitability are, the Court found, a reasonable and effective tool for identifying strong candidates, a tool which is commonly used in the private sector: “The reasonableness of such open-ended questions is illustrated by their pervasiveness in the public and private sectors. In addition, the use of open-ended questions in employment checks appears to be equally commonplace in the private sector.”

The case is noteworthy for private employers because it recognizes the strong interest of all employers in conducting “[r]easonable investigations of applicants and employees” to meet their interests in “the security of [their] facilities and in employing a competent, reliable workforce.” More broadly, the Court's analysis in Nelson, like its analysis in last term's decision in the Quon text-messaging case, assumed that the employees in question had a reasonable expectation of privacy but nonetheless found no privacy violation because the government employer had a legitimate justification for its search and conducted the search in a reasonable manner. This analysis highlights the fact that private employers similarly can avoid liability on privacy-based claims, even when they intrude upon an employee's privacy interests, if the intrusion is for a legitimate purpose and done in a reasonable manner.

For further reading about this development, please see U.S. Supreme Court Holds that Constitutional Privacy Rights Do Not Restrict the Government's Discretion to Background Check Federal Contractors by Rod Fliegel and William Simmons.