The U.S. Supreme Court held unanimously in NASA v. Nelson, Case No. 09-530 (U.S. Jan. 17, 2011), that a government employer does not violate a constitutional right to informational privacy when it asks employees of contractors reasonable questions in an employment background investigation.

The plaintiffs in NASA v. Nelson are employees of contractors at the Jet Propulsion Laboratory in California. When hired, they were not subject to background checks. Subsequently, however, on recommendation by the 9/11 Commission, the President ordered uniform identification standards for all federal employees, including employees of federal contractors. The plaintiffs were asked to complete a standard background check questionnaire seeking basic citizenship and biographical information. The form also asked about the use of illegal drugs in the preceding year.

The plaintiffs, like all government employees, were required to certify their responses were true and sign a release authorizing the government to obtain personal information from third-party references such as former employers, schools, and landlords. Forms sent to those references asked, among other things, if there was any reason to question the employee's "honesty or trustworthiness," and if the reference had any adverse information concerning the employee's "violations of the law," "financial integrity," "abuse of alcohol and/or drugs," "mental or emotional stability," "general behavior or conduct," or "other matters."

The plaintiffs sued NASA, claiming that the background checks violated their constitutional right to informational privacy, and the Ninth Circuit Court of Appeals ultimately granted them injunctive relief. The Supreme Court reversed. The Court assumed, without deciding, that the Constitution protects a privacy right, but held that even if a privacy interest exists, it does not prevent the government from asking the questions challenged by the plaintiffs.

The Court reasoned that 1) the government issued its background checks in its role as employer, not as the state; 2) the government has a "much freer hand" when acting as an employer over its employees rather than as a sovereign over its citizens; and 3) the government's questions were reasonable and of the sort used by both private and public employers in their background investigations.

The Court also emphasized that information obtained in background checks is protected from unwarranted disclosures, as all responses to the government forms are subject to the Privacy Act.

Practically, the Supreme Court's narrow ruling not only means that the government may constitutionally continue to use background checks for employees of federal contractors, but that government employers will continue to face litigation until the existence or non-existence of a constitutional right to informational privacy is finally decided.