The U.S. Supreme Court handed down two important employment law decisions in January, embarking upon a year that includes a host of notable cases that onlookers anticipate could bring about significant changes and clarifications in labor and employment law.
National Aeronautics and Space Administration v. Nelson, No. 09-530, U.S. LEXIS 911 (Jan. 19, 2011).
In NASA v. Nelson, the Court unanimously ruled that NASA’s background check process did not violate its employees’ constitutional right to privacy. (Justices Scalia and Thomas wrote concurring opinions and Justice Kagan did not take part.) At issue was a questionnaire that asked whether employees had used, possessed, supplied, or manufactured illegal drugs in the last year, and, if so, what treatment or counseling the individual had received. Employees also had to permit the Government to gather personal information from schools, employers, and others, and to send a questionnaire to their references asking about the employees’ trustworthiness.
Reversing the Ninth Circuit, the Court held that the process was reasonable in light of the government interests at stake – namely, ensuring the security of its facilities and maintaining the competency of its workforce. The Court’s conclusion was bolstered by the fact that similar investigatory techniques have been widely used by private and public employers for decades. As such, any constitutional privacy right that existed was outweighed by the Government’s legitimate interest in maintaining its internal operations. In addition, the information acquired during NASA’s investigation was subject to significant protections from disclosure, further allaying concerns that personal information would be disseminated.
Thompson v. North American Stainless, LP, No. 09-291, U.S. LEXIS 913 (Jan. 24, 2011).
In another unanimous decision (Justices Ginsburg and Breyer concurring, and Justice Kagan abstaining), the Court held in Thompson v. North American Stainless, LP that the anti-discrimination provisions of Title VII of the Civil Rights Act of 1964 create a cause of action for third party retaliation claims. Here, plaintiff Eric Thompson was fired allegedly in retaliation for his fiancé’s filing of a sex discrimination charge against their mutual employer. The Sixth Circuit held that Title VII did not recognize a cause of action for retaliation brought by Mr. Thompson under Title VII because he had not undertaken any activity protected by the statute.
In reversing the Sixth Circuit, the Supreme Court reasoned that Title VII’s retaliation protections would be undermined if Thompson were precluded from suing, since it is “obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiancé would be fired.” Id. at 3. Therefore, the Court ruled that employers are prohibited from retaliating against certain third parties – those who are sufficiently related to the employee to fall within the “zone of interests” the statutory provisions set out to protect – in response to an employee’s protected activity. Accordingly, Mr. Thompson fell within the ambit of individuals protected by the statute and had standing to sue under Title VII.
The Court’s holding has indeed expanded the scope of retaliation claims under Title VII, but by refusing to identify a fixed class of relationships for which third-party reprisals are unlawful, the Court has created vast uncertainty regarding exactly which third parties are protected. In attempting to address this issue, the Court held that “[w]e expect that firing a close family member will almost always meet the [applicable] standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize.” Id. at 4. We will continue to monitor the lower courts to see how this ambiguity plays out.
Implications for Employers
While the holding in Nelson was narrowly limited to Government employers, the Court’s recognition of the prevalence of background checks in the public and private sectors is a reminder that such procedures are an acceptable practice for businesses looking to make informed hiring decisions and to avoid exposure to negligent hiring claims. Nevertheless, employers must carry out these processes in such a way that elicits pertinent information without infringing upon privacy rights. At a minimum, employers should make certain that they avoid asking questions about protected characteristics (e.g., age, marital status, etc.) or characteristics that do not relate to job duties, while keeping acquired information highly confidential and secure.
Thompson is a reminder to employers to exercise common sense when taking adverse actions against employees. Retaliation claims can fetch verdicts in the millions of dollars. With third-party retaliation claims now a reality, employers should consider consulting with counsel before terminating any employee with ties to another employee who has filed discrimination or harassment charges.