The Federalist Society takes no position on particular legal or public policy initiatives. All expressions of opinion are those of the author or authors.
Joseph P. McHugh, Reed Smith LLP
Jennifer B. Healey, Bryan Cave LLP
In the wake of the September 11 attacks, much attention has rightly been focused on taking the battle to the terrorists overseas. But terrorism being what it is, much attention also needs to be focused on the homefront. The elusive and multifaceted manner in which terrorists operate means that while we chase some of the terrorists abroad, others will be refining their tactics for hitting us at home. The Bush Administration promptly addressed this by creating the new cabinet-level office for Homeland Security. When thinking about ways to take the battle to the terrorists at home as well as abroad, the workplace must be viewed as a front line, given the amount of time Americans spend at work.
There are a number of relatively painless measures that the federal government can quickly take to make the American workplace a source of concrete assistance in the war. Indeed, while Congress and the Administration should rightly put certain labor and employment issues on the backburner while they focus on terrorism, others should be front and center as part of that focus. As each day goes by, the Bush Administration announces new initiatives intended to expand intelligence-gathering on potential terrorist threats. With the Bush Administration urging individuals to be vigilant participants, surely employers should be brought into the loop. This paper briefly notes a few steps to enlist employers in this effort:
- Preempt, or at least take steps to prompt revocation of, state laws governing employee privacy to remove any doubt among employers that they may monitor employee use of telephones, voicemail, email and personal computers;
- Relax Fair Credit Reporting Act requirements that discourage employers from doing background checks;
- Amend Title VII to create a rebuttable presumption in favor of employers who state legitimate security reasons for actions taken in screening applicants or discharging employees;
- Amend the Immigration Reform And Control Act to give employers broader discretion in the steps that they take to verify non-citizen employment and licensure records.
The war will be a multi-pronged effort requiring adjustments in ways that at first glance might seem far removed from combating terrorism. Before September 11, no one would have thought that legal immigrants taking flying lessons in Florida were really terrorists planning an attack. Because we can anticipate that the terrorists' tactics will grow ever more refined, we need to develop a sharper ability to predict those tactics.
Certain counter-terrorism measures that might have seemed excessive, unnecessary or unacceptable before September 11 may be far more appropriate today or at some point in the near future. Central to the calculus should be the impact of policy changes on individual liberty -- the core American value set in stark relief against the dark values held by terrorists. Much of the anticipated hostility to the above policy changes will flow from an overly solicitous view of employee and immigrant "rights" rather than the protection of liberty.
I. Workplace Privacy Issues.
Given the sheer percentage of adults who work and the amount of time spent at work, it seems like a fairly safe assumption that some leads in the war on terrorism could be obtained if employers could freely monitor their phones and computers. In the context of this type of war, no lead is too insignificant. Well before September 11, workplace privacy issues were emerging as a flashpoint between employers and employees. Presently, states can decide what, if anything, employers can do in terms of monitoring employees' use of telephones and computers. A fast, simple way to assist the war on terrorism would be to create a single federal standard that permits employers to engage in unfettered monitoring of their own phones and computers. At a minimum, steps could be taken to encourage states to revoke or refrain from implementing laws that restrict such monitoring.
No doubt, the trend absent September 11 would be to expand the concept of workplace privacy. A striking example is the French Supreme Court's pathbreaking decision in early October 2001 that employers may not read their employees' email or other personal computer files generated at work. See BNA Daily Labor Report, No. 193, October 9, 2001, p. A-8. But September 11 is good reason to halt any such trend here. Along those lines, Governor Gray Davis of California recently vetoed a third attempt by the California legislature to limit employer monitoring of emails. See BNA Human Resources Report, Vol. 19, No. 40, October 15, 2001, p. 1101. Governor Davis's rationale was that employers need to be able to monitor their phones and computers to protect themselves from legal liability. Creating a nationwide network of employer-monitored phones and computers to assist in the war on terrorism seems at least as valid a rationale.
Such a rationale is not sufficient to monitor residential phones and computers. There needs to be a zone of privacy. But liberty properly protected does not preclude a network of employer-owned phones and computers. Put the other way around, the pertinent question is whether it the interests of liberty are served or hindered by limiting such monitoring -- in the middle of a shadow war involving terrorists and terrorist sympathizers who could be located anywhere in the country holding any of a number of nondescript jobs.
Conservatives and liberals alike are rightly cautious about laws that permit government infringement of privacy. Even without the Supreme Court's decision in Griswold v. Connecticut, 381 U.S. 479 (1965), regarding what can be loosely referred to as "bedroom privacy," most Americans would agree that freedom from government intrusion into one's private affairs is a core component of liberty. The cost to our freedom from allowing government to widely monitor our home phones and computers far outweighs the benefit. But there is no such cost with employer monitoring. Indeed, the notion of workplace privacy might well be characterized as oxymoronic. The workplace is not a private place.
A nationwide policy that puts all on notice that their use of employer phones and computers may be monitored by their employer is an easy way to help the war on terrorism with no impact on liberty. Though federal preemption is never something to be lightly considered, the type of preemption suggested here serves not to expand but to contract government power, an important distinction. At a minimum, steps could be taken to encourage states to revoke (or decline to implement) laws that restrict employers from such monitoring.
II. Employer Use Of Background Checks.
Likewise, liberty is in no way curtailed but may be better protected if employers are given greater leeway in conducting background checks prior to and during their relationships with employees. As a first line of defense against terrorism in the workplace, employers should screen candidates and current employees for backgrounds that may pose a threat to workplace and national security. This is most starkly demonstrated by the events of September 11th which thrust to the forefront the poor state of our nation's airport security. Since then, we have learned that many individuals charged with keeping criminals off airplanes were once criminals themselves. The Bush administration has identified this as a serious problem--one that should be solved promptly.
Currently, the Fair Credit Reporting Act, 15 U.S.C. § 168(a-t) ("FCRA"), and EEOC policy impose burdens and restrictions on employers that discourage them from doing criminal record checks. Those disincentives should be removed.
"Consumer reports" include "any written, oral or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for . . . employment purposes." "Investigative Consumer Reports" are consumer reports that contain information obtained through personal interviews with "neighbors, friends, or associates."
Any report containing personal, private or confidential information obtained from someone providing such information in the regular course of his or her business will most likely be considered a consumer report. Driving record checks, criminal background checks, educational records checks, prior employment record checks, and credit history checks are all examples of consumer reports. If a background check report is obtained from a "consumer reporting agency," it is a consumer report and is governed by the FCRA. Under the current state of the law, employers must assume that any such report obtained from a third party in the business of providing such information, will be covered under the broad definition of "consumer report."
The FCRA states, "A person shall not use or obtain a consumer report for any purpose unless: (1) a consumer report is obtained for purposes for which the consumer report is authorized to be furnished under the FCRA; and (2) the purpose is certified . . . by a prospective user of the report through a general or specific certification." Consumer reports can be furnished only in limited circumstances relevant to employers:
- in response to court orders or grand jury subpoenas;
- under the written instructions of the consumer;
- for "employment purposes," i.e., evaluating an employee or potential employee for hiring, promotion, reassignment, or retention;
- for a "legitimate business need"; and
- in response to a request by child support enforcement agencies.
Thus, Consumer reports can be used to determine whether to hire or fire employees or for other "employment purposes." To fall within the "employment purposes" provisions, the consumer report must relate to a decision about a prospective or current employee. A consumer report may not be used with respect to former employees who are not being considered for rehire.
A "legitimate business need" is narrowly defined under the FCRA as those: (1) concerning business transactions initiated by a consumer; or (2) to review whether a consumer continues to meet the terms of an account. Courts have ruled that the following purposes are not legitimate business needs:
- determining whether a former employee would be able to satisfy a judgment in pending litigation against his or her former employer;
- determining whether an employee has been embezzling funds;
- to gather information to defend a lawsuit; and
- to obtain information on the prospective applicant's spouse that may affect the applicant's suitability for a job.
However, there are several notice and disclosure requirements that an employer must follow in order to comply with the FCRA. First, a consumer report cannot be procured for employment purposes unless a "clear and conspicuous disclaimer" is made to the prospective or current employee before the report is procured. That disclaimer must inform the employee that the consumer report may be obtained for employment purposes. This disclaimer must be made in a document that consists solely of the disclosure. In other words, putting the disclosure in an employee application will not suffice. Second, the employee must authorize, in writing, the report's procurement. Third, the employer must certify to the consumer reporting agency that the disclosure to the employee has been made, that consent has been received, and that the report will not be used for an illegal purpose.
If an employer has met the FCRA's requirements to obtain a consumer report for employment purposes and intends to use the information in the report as a basis to take adverse action against the prospective or current employee, it must provide: (1) notice to the employee about the action; (2) a copy of the report; and (3) a notice of the employee's rights under the FCRA. Once the employer takes an adverse action, the applicant or employee must also receive notice of the following: (1) the report was a basis for adverse action; (2) the name and address of the credit reporting agency; (3) notice that the consumer reporting agency did not make the decision concerning the employee; and (4) that the employee may dispute the accuracy or completeness of the report and obtain a free copy of it.
These heavy burdens imposed on employers by the FCRA were excessive before September 11 and are positively counterproductive in the post-September 11 workplace. Compounding this, the EEOC has taken the position that an employer's "policy or practice of excluding individuals from employment on the basis of their conviction records has an adverse impact on Blacks and Hispanics in light of statistics showing that they are convicted at a rate disproportionately greater than their representation in the population."
Employers ought to be able to conduct background checks on prospective and current employees without the onerous disclosure requirements that invite litigation and without some sort of presumption of discriminatory intent or effect.
One way on which these restrictions on employers might be eased would be to develop a list of jobs for which background checks are presumptively proper without complying with FCRA requirements and without inviting enforcement action by the EEOC. One tentative step has been taken in this area. On October 16, 2001, Senator Olympia Snowe (R-Maine) introduced a bill (S. 1557) requiring companies that transport hazardous materials to conduct background investigations of drivers and document the drivers' identities. Under the bill, employers would also have to review INS records. The downside to Senator Snow's approach is that she frames it in terms of additional requirements. A better approach would be to remove obstacles that discourage employers from doing such checks. In the present circumstances, one suspects that employers hardly need to be required to carefully screen applicants and employees. The upside to Senator Snow's approach is that such requirements may at least create a safe-harbor for certain employers who do such checks.
III. Develop Title VII's National Security Exemption.
Akin to making it less burdensome and dangerous for employers to probe applicants' and employees' backgrounds, amending a provision of Title VII would make it easier for employers to identify, reject and presumably report suspect applicants. Everyone recognizes that employers will face a difficult challenge for the indefinite future as Americans nationwide grapple with an impulse to engage in racial profiling (or, for that matter, national origin or religious profiling). Employers must be alert to discriminatory treatment of employees by co-workers and supervisors as well as discriminatory treatment of applicants by those making hiring decisions. Employers are likely to find themselves erring on the side of hiring suspicious applicants rather than risking exposure to a civil rights claim.
An existing provision of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, offers a potential safety valve that should be strengthened. Under 42 U.S.C. § 2000e-2(g), employers may discharge an employee or refuse to hire an applicant for a position if the job itself or access to the job site is subject to national security requirements under a security program implemented by statute or executive order and the applicant has not met or no longer meets those requirements. Congress can add teeth to this provision by amending it so that all employers are deemed participants in a national security program. Given the nature of this war on terrorism, such a view of the role of employers is well-founded.
Such an amendment would give employers a stronger defense that their decision was non-discriminatory without significantly undercutting the ability of employees and applicants to prevail on legitimate claims of discrimination. Well-developed and long-established case law, starting with McDonnell Douglas v. Green, 411 U.S. 792 (1973), sets out the shifting evidentiary burdens that parties to a discrimination suit must meet absent direct evidence of discrimination (which in this day and age almost never exists). Plaintiffs must first make a prima facie case. If they do, employers must then offer a non-discriminatory reason for the employment decision and, if employers meet that burden, plaintiffs must offer specific proof that the reason is a pretext for discrimination.
Though employers today could try to meet their burden by asserting that national security concerns prompted their decision, a court and jurors might well look askance at such a defense. Judges and jurors might easily recognize, for example, that an airport security company is motivated by national security concerns but reject that as to Merrill Lynch, even though we now know that terrorists are clever enough to play the market as part of their attacks. The amendment would strengthen such a defense by enabling employers to invoke a specific statutory provision as the non-discriminatory basis for their decision. The amendment would send a strong message that in the present environment, all employers impact national security. And the amendment would in no way prevent plaintiffs with legitimate claims from proving that the decision had nothing to do with national security.
Neither the interest of liberty nor defeating discrimination is served by making it more difficult for employers to legitimately reject an applicant for security reasons. The Declaration's statement that all men are created equal certainly reflects a core American value -- one that has attained particular force in recent years. The proposed amendment in no way undercuts that value. An employer who illegitimately invokes national security as a cover for discrimination can still be brought to book. The amendment simply reduces the element of fear as the law-abiding employer weighs security concerns against the risk of discrimination litigation.
IV. Ease Limits On Employer Analysis of Alien Employment Documentation.
Employers and employees alike have become very familiar with Form I-9 and the lists of documents that employees, to verify their eligibility to work, can and must provide under Section 274A of the Immigration and Nationality Act, 8 U.S.C. § 1324(a), enacted as part of the Immigration Reform and Control Act of 1986 ("IRCA"). Employers can face criminal and civil penalties if they fail to comply with the verification requirements.
But the very next provision of the IRCA, 8 U.S.C. § 1324b, makes it an "unfair immigration-related employment practice" for an employer to go too far in verifying eligibility. An employer who, with the purpose or intent to discriminate, requests more or different documents than required by the law or refuses to honor documents that to outward appearances seem genuine can be liable for damages plus attorneys fees. 8 U.S.C. §§ 1324b(a)(6) and (h). Although the intent requirement is helpful, the provision nevertheless creates a strong disincentive for employers to do more than the bare minimum in checking eligibility.
The tension in the statute is obvious. While placing employers in this uncomfortable position prior to September 11 might have been acceptable, an adjustment that would make it less risky for employers to probe further seems a reasonable step that would help in the war on terrorism. For example, Section 1324b(a)(6) could be rewritten so that the employer is expressly permitted to probe further and such further inquiry presumptively is not an unfair immigration-related practice, subject to rebuttal with clear and convincing evidence of discriminatory purpose or intent. Eliminating the attorney's fee provision would be another possible adjustment. Such changes would still recognize the need to prevent discrimination but would give greater weight to the purpose of Section 1324a -- identifying and preventing the employment of illegal aliens. Shifting the balance in this way seems a sensible adjustment at no cost to core American values.
The American workplace is on the front line in the war on terrorism. Given that reality, government should look for ways to better arm employers for the fight. The central inquiry should be whether any particular adjustment to labor and employment law will help in the fight without undermining liberty. What should not be a factor is how various interest groups might have viewed such a policy change prior to September 11. The government will be taking many actions now that it never would have considered prior to the attacks. Those in government must think beyond the boundaries that existed prior to September 11 while always staying focused on the core purpose of the war on terrorism, the preservation of liberty.
The proposals outlined in this paper would help employers gather intelligence for the war on terrorism without infringing on individual liberty. Those who might contend that allowing employers to take the steps outlined above would infringe liberty are distorting the meaning of liberty. People should be free to choose where and for whom they seek to work and they should be free from anything more than minimal governmental intrusion into their private lives. But our working lives are not our private lives and employers are not governments with the power to imprison. No liberty interests are infringed when employers monitor their own phones and computers and more carefully determine who they will hire or retain. The bottom line: much valuable intelligence can be gathered to preserve our free society without infringing our individual liberty.