Some of the traditional privacy issues of concern to employers are listed below along with a sample inspection policy at the end of this article.

A. Pre-Employment Privacy Issues

1. Arrest and conviction records

According to the Linowes privacy study, 85% of the companies surveyed do not
collect arrest records of personnel. Over half (54%) require information on
convictions. State law may require that the arrest information contained in a
job application be withheld from anyone interviewing the applicant, other
than those in the personnel department or in charge of employment. Some
states may require an employer advise an applicant in writing when rejected
because of a conviction record.

2. Psychological testing

Psychological testing should be job-related and narrowly tailored to serve
the employers purpose. In Soroka v. Dayton Hudson Corp., 235 Cal. App. 3d 654
(Cal. Ct. App. 1991), rev. granted, 822 P.2d 1327 (Cal. 1992), rev.
dismissed, 862 P.2d 148 (Cal. 1993), an applicant for a security officer's
position was asked more than 704 true-false questions, including 'I sometimes
have strange and peculiar thoughts, and I believe in the second coming of
Christ." The trial court refused to prohibit the employer from using this
test. However, the appellate court reversed the decision and barred the test.
The court found the questions were not job-related and held the test device
violated the state's constitutional right to privacy. In addition to privacy
rights, employers performing psychological testing also should consider the
protection afforded employees by the Americans with Disabilities Act.

3. Genetic testing

Several states such as Connecticut (effective10/1/98), Florida (only with
informed consent), Maine, New York, North Carolina, Wisconsin and Texas have
enacted laws prohibiting the use of genetic testing in the employment
process. In New Jersey, for example, the Genetic Privacy Act bars
discrimination by insurers or employers on the basis of a person's genetic
characteristics. Violators of its stringent privacy provisions in the
measure could face fines, jail terms, or both.

Other states, as well as the U.S. Congress, are considering such legislation
since scientific breakthroughs are making it easier to identify genes linked
to disease. Other laws, such as the Americans with Disabilities Act may
prohibit or limit such testing. Moreover, cases challenging genetic testing
are beginning to reach the appellate courts. For example, earlier this year
the U.S. Court of Appeals for the Ninety Circuit held, in Norman-Bloodsaw v.
Lawrence Berkeley Laboratory, 135 F.3d 1260 (9th Cir. 1998), the genetic
testing of employees of a facility jointly operated by federal and state
agencies violated the Fourth Amendment. The tests were conducted without
notice and consent and were "not an appropriate part of an occupational
medical examination," said such court. As such, they were "searches" in
violation of the employees' Fourth Amendment rights. Id. At 1268.

4. Credit checks

Employers use of credit reports in screening applicants for employment
triggers the Federal Fair Credit Reporting Act. As amended in 1997, the FCRA
provides specific notice and disclosure requirements before using a consumer
reporting agency to obtain information that may be used in the screening
process. If an employer denies employment based on a consumer report, it
must, among other things, give the applicant the name and address of the
agency which supplied the report. If an employer uses an investigative
consumer report, which involves obtaining information about the applicant
through personal interviews with others, the employer must meet more
stringent notice and disclosure requirements.

5. Use of Tobacco Products

According to a 1992 National Opinion Poll on Workplace Privacy, 93% of those
polled stated that an employer does not have the right to base an employment
decision on whether an employee smokes after work. Arizona, Connecticut, the District
of Columbia, Illinois, Indiana, Kentucky, Louisiana, Maine, Minnesota,
Mississippi, Missouri, Montana, New Hampshire, New Jersey, New Mexico, New
York, Oklahoma, Oregon, South Carolina, South Dakota, West Virginia and
Wyoming have enacted Legislation prohibiting employers from discriminating
against individuals who use tobacco products outside the workplace.

6. Medical information

Under the ADA, an employer may not ask about an applicant's physical mental
limitations prior to making the applicant a conditional offer of employment.
Employers may not limit, segregate, or classify a job applicant or employee
in a way what adversely affects the person's opportunities or status. The
ADA, the Federal Family and Medical Leave Act and several state statutes also
require employers to maintain medical files separate and apart from personnel
files and to limit their access only to individuals with a need-to-know.

7. Polygraph testing

The federal Employee Polygraph Protection Act of 1988, 29 U.S.C. § 2001
et. seq. prohibits most private employers from using lie-detector tests to
screen job applicants. With current employees, an employer must reasonably
suspect the employee was involved in a workplace theft or other incident
causing economic loss to the employer. Massachusetts and Rhode Island
restrict "paper and pencil honesty" tests. Penalties for violations can be
severe. For example, in Maryland, a former employee who was required to
undergo a polygraph examination in violation of a state statute was awarded
$1.3 million. Moniodis v. Cook, 494 A. 2d 212 (Md. Ct. Spec. App.1985), cert.
denied, 500 A.2d 649 (Md. 1985).

B. Privacy Issues During Employment

1. New hire reporting requirements

The Welfare Reform Act of 1996, H.R. 3734, signed into law on August 22, 1
996, requires states to establish and maintain a directory of information on
all newly hired employees to be used for tracking and enforcing child support
obligations. As such, each state must enact a statute requiring that all
employers (or anyone transacting business in the state) to report the name,
address, and social Security number of each new employee to the state labor
department.

Many states already had such requirement, and at least the following states
now have reporting requirements for new hires: Alabama, Alaska, Arizona,
Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii,
Illinois, Indiana, Maine, Massachusetts, Minnesota, Mississippi, Montana,
Nebraska, New Hampshire, New Mexico, North Carolina, North Dakota, New York,
Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota,
Tennessee, Texas, Utah, Virginia, Washington, and West Virginia.

2. Lockers and offices

An employee's expectation of privacy may extend to areas of personal use
within the workplace. For example, a Texas jury rewarded $108,000 to an
employee whose locker was searched without her consent. The employee had a
reasonable expectation that the locker and his contents would be free from
intrusion and interference because she used her own lock and was never
informed the locker was subject to search. K-Mart Corp. Store No.7991 v.
Trotti, 677 S.W.2d 632 (Tex Ct. App. 1984), writ. rev'd, 686 S.W.2d 593 (Tex.
1985).


3. Car searches

A federal court in Kansas held that an employer did not invade an
employee's privacy by attempting to search the employee's car in accordance
with a published policy of periodic end random searches of vehicles leaving
company property. Gretencord v. Ford Motor Co., 538 F. Supp. 331 (D. Kan
1982).

4. Mail

Where a company official opened an employee's mail, which was clearly marked
"personal," the court held that the employer invaded the employee's privacy
Vernars v. Young, 539 F.2d 966 (3d Cr. 1976).

5. Strip searches

Workplace strip searches create a serious threat to an employee's privacy. In
an Illinois case, a cafeteria cashier who was required to be strip-searched
when her cash register was $100 short was awarded $300,000 Taylor v.
Rush-Presbyterian St Luke's Medical Center, No. 83L-8714 (Cook Cty.Cir.Ct.
September 1987), rev'd and rem., 573 N.E2d 876 (1st Cir. 1989) (unpublished).
In a similar case, a female retail store employee was ordered to disrobe down
to her underwear in front of a female assistant manager and a customer who
had accused her of taking $20. The court held that a jury could find that
this was so degrading and humiliating as to constitute an invasion of
privacy. Bodewig v. K-Mart. Inc., 635 P.2d 657 (Or.Ct.App. 1981), petition
denied 644 P.2d 1128 (Or. 1982)

6. Undercover agents

Surveillance of employees may not be offensive, despite the intrusion. No
invasion of privacy was found where an investigator followed an employee to
obtain evidence of worker's compensation fraud. McLain v. Boise-Cascade
Corp., 533 P.2d 343 (Or. 1975). Overzealous surveillance, however, may be an
invasion of privacy. Nader v. General Motors Corp., 25 N.Y.2d 560, 255 N.E.2d
765 (1970).
According to the Linowes privacy study, 67% of the companies surveyed use
investigators to collect or verify information concerning personnel.

7. Medical files

Employers who use employees medical records must ensure their
confidentiality and limit access to them. Failure to do so could result in a
suit for invasion of privacy or for violating state or federal law, such as
the Americans with Disabilities Act or the Family and Medical Leave Act.
Federal law and some state laws require that medical records be kept in
confidential files, separate and apart from a personnel file.

C. Post-Employment Privacy Issues

1. Personnel files
Some states have statutes requiring an employer to provide a copy of
the personnel file to a current or former employee. Furthermore, employers
may be compelled to disclose personnel files during the discovery phase of an
employment related litigation. Employers may move for a protective order for
the personnel files or to limit their disclosure to specified individuals.
Courts recognize that an employee has a privacy interest in his or her
personnel file but balances this against a plaintiff's need for information
to establish a prima facie case. This issue arises generally in of
intentional disparate treatment discrimination, where the treatment of
similarly situated persons may reveal a pattern of discriminatory motive.
State of Januszewaski, 438 A.2d 679 (Conn, 1980), cert. denied, 453 U.S. 922,
101 S. Ct. 3159, 69 L. Ed. 2d 1005 (1981). Judicial in camera review of the
personnel file may be conducted to determine the relevance of the material
sought. Even if the material sought is found to be narrowly tailored and
relevant to the case, review may be limited to the plaintiff's attorney.
Rossini v. Ogilvy & Mather, Inc., 798 F.2d 590 (2d Cir. 1986).

2. References

A jury awarded $1 .3 million in exemplary damages and another $600,000 in
actual damages to an ex-employee for defamatory statements made by a company
representative to employees and prospective employers. Frank B Hall & Co. v.
Buck, 678 S.W.2d 612 (Tex. Ct. App. 1984, writ ref'd n.r.e.), cert. denied,
472 U.S. 1009, 105 S. Ct. 2704, 53 U.S.L.W. 3869 (1985). An employer who
erroneously accused plaintiff of drug abuse to seven company officials
libeled the plaintiff, employee was awarded $200,000. Houston Belt & Terminal
Ry Co. v. Wherry, 548 S.W. 2d 743 (Tex. Ct. App. 1976), cert. denied, 434
U.S. 962, 98 S.Ct. 497 (1977) Escorting an employee from the premises after
termination is not defamation. Gay v.William Hill Manor, Inc , 74 Md. App.
51, 536 A.2d 690 (Md. Ct. Spec. App, 1988).

CONCLUSION

Expansion of employee privacy rights in America's workplaces will continue. In fact, as technology allows an employer to monitor "what no employer has monitored before," the "right to be let alone" may become the personal oasis in a technological desert. Accordingly, employers should take immediate steps to protect themselves from potential privacy claims. Suggested preventive measures include:

• giving applicants and employees notice of intended monitoring and what forms it will take;
  
  
• ensuring that monitoring is directly related to the purposes and functions of the employee's job;
  
  
• using reasonable and unobtrusive means to monitor employees when necessary:
  
  
• using employee monitoring only where reasonable suspicion of inappropriate activity exists; and
  
  
• safeguarding the confidentiality of private information obtained about employees.

SAMPLE INSPECTION POLICY