What the Supreme Court Background Screenings Ruling Means for Your Company

Background check

Most employers understand that they must meet many federal requirements when moving forward with a background check. The Fair Credit Reporting Act (FCRA) requires that employers follow a very specific process before legally obtaining information from a background check. A myriad of federal and state court cases can further complicate this matter for employers, though.

The NASA v. Nelson Ruling

One such case involves a 2011 ruling by the US Supreme Court, which challenged the collection of certain background information by the US government as part of the process when credentialing federal contractors. In NASA v. Nelson, the Supreme Court ruled unanimously that the federal government may conduct wide-ranging background checks of workers employed by government contractors.

In this case, 28 contract employees of the National Aeronautics Space Administration’s (NASA) Jet Propulsion Laboratory (operated by Cal Tech) were previously not subject to the government background checks when they initiated employment with the government. However, subsequent recommendations by the 9/11 Commission in 2004 ordered the adoption of uniform standards for both federal employees and contract employees. As a result of these recommendations, NASA amended its contract with Cal Tech to meet the new requirements. The Jet Propulsion Laboratory announced that employees who did not complete the government-mandated background checks would be subject to termination by Cal Tech.

The plaintiffs filed suit for a preliminary injunction by asserting that the background checks violated the constitutional right to information privacy. The district court denied the preliminary injunction, but the Ninth Circuit Court of Appeals reversed the decision. The appellate court held that portions of the background check were likely unconstitutional because they furthered no legitimate governmental interest.

At this point, the case went to the Supreme Court, which reversed the Ninth Circuit Court’s decision based on the assumption that although there is a constitutional right to informational privacy, the President has authority to gauge the employee’s fitness for governmental employment. They also held that background checks had become mandatory for civil service in 1953, demonstrating a history of interest in conducting basic background checks to ensure a competent and reliable workforce. The Supreme Court concluded that the questions in the background check were reasonable and all information collected for the background checks would be subject to non-disclosure due to the Privacy Act provisions.

What Does This Ruling Mean for Your Company

The Supreme Court’s decision on this case serves as a reminder to all employers that the federal government has broad and sweeping rights related to extensive background inquiries related to contract employment. Further, this decision means that federal government contractors are provided with a level of assurance that conducting background checks on their applicants and employees will not result in a violation of Constitutional rights.

The effects of this decision demonstrate that there is strong support for public employers to ask hiring questions as long as they are related to the job duties and assignments, even if those questions are asked to narrowly satisfy a specific government interest.

The Court also emphasized that even though public employers have a lot of leeway in asking hiring questions, they are still limited by other laws from asking private questions, such as those related to drug use and treatment. These laws protect recovering and recovered drug addicts from discrimination. In short, the Court has determined through this ruling that public employers should continue to implement hiring and background check processes only to determine if the applicant can perform the job’s essential duties and would be a competent employee.

To do this properly, employers should also be knowledgeable on other federal and state laws that regulate the collection and use of background information by private-sector employees, such as:

  • The Fair Credit Reporting Act imposes notice and consent obligations on employers when they attempt to retrieve background check information.
  • The Americans with Disabilities Act restricts the collection of medical information in the hiring process and regulates the sequencing of the background check relative to the timing of pre-employment medical exams.
  • State laws regulate the use of criminal records, especially those that have a defined look-back period. Employers would be restricted from using certain criminal history data if it is beyond the allowable look-back period.
  • State laws regulate the use of credit history information, such as those found in Washington, Oregon, Hawaii, and Illinois.

This complex web of state and federal laws (also complicated to subsequent court rulings) can quickly become confusing for many companies. To learn more about how the Supreme Court ruling may impact the processes used at your company, contact USA Fact today. Our experts have decades of experience in conducting background checks that are compliant on the state and federal levels.

USA Fact Global Screening Services provides comprehensive background and criminal checks for employers that comply with federal and local laws. By helping you eliminate high-risk applicants through tailored solutions, USAFact enables you to create a safe and productive work environment and a foundation for future success.