Skip to content

Legal Report October 2008



BACKGROUND SCREENING. Coverage of a case that appeared in the July edition of “Legal Report,” erroneously suggested that the subcontractor conducting a criminal background check on behalf of a screening company (CARCO Group, Inc.) sent unfiltered and unevaluated information directly to CARCO’s client (Prudential). This is incorrect. The article did not mean to imply that CARCO allowed raw, incomplete, and unevaluated field data to be sent to a client. We regret the error. CARCO advises that its consistent practice is to have field researchers return to CARCO all possible criminal record check information that could be associated with the subject in question; filtering and evaluation are then done centrally at CARCO by highly trained investigators who know the reporting limitations required by the Fair Credit Reporting Act (FCRA) and analogous state laws.

The importance of the case, as reported in July, is that the appellate court has ruled that a plaintiff need not provide an expert witness to determine whether a background check is reasonable when litigating a claim under the FCRA.

The case has been sent back to the lower court (the U.S. District Court for the District of Columbia), where CARCO has filed another motion for summary judgment. Wilson’s attorney has filed an opposition to the motion. (Wilson v. CARCO Group, Inc., U.S. Court of Appeals for the District of Columbia Circuit, No. 07-7053, 2008)

EMPLOYEE MONITORING. A federal appeals court has ruled that a police department violated the privacy rights of its officers when it obtained transcripts of text messages sent and received via a service purchased by the city. The court ruled that because officers had been told that their messages would not be read, the city had no right to access them without the permission of the officers.

In October 2001, the city of Ontario, California, contracted with Arch Wireless to provide a wireless text messaging service for police. The city did not write a specific text-messaging policy but instead referred to its existing policy, which stated that all city-owned computers and electronic devices were to be used for city business only. The use of such equipment for personal reasons was explicitly prohibited.

A year before they had access to the text-messaging service, police officers signed a form acknowledging that they had no expectation of privacy when they used the city’s computer systems. When the text-messaging system was provided to the officers, city officials noted that the messages were considered e-mail and were, therefore, public information and would be subject to auditing by the city.

Under the city’s contract with Arch Wireless, each text-messaging account was limited to 25,000 characters a month. After an account reached this limit, the city was required to pay additional charges. Lieutenant Steve Duke was in charge of the city’s contract and responsible for securing payment for those accounts that exceeded the character limit. If an employee used more than the allotted characters, Duke would ask the employee to write a check for the extra amount. Duke told the officers that they had to pay the overages, or the city would audit the accounts to ensure that all the correspondence was work related.

One of the officers, Jeff Quon, regularly exceeded the character limit for his account. Quon paid for the overages each time.

In a meeting held in August 2002, Duke announced that he was tired of “being a bill collector” in regards to the text-messaging accounts. The chief of police told Duke to audit the transcripts of the accounts to determine if the messages were work related. The chief noted that if all of the texts were used for city business, the police needed to consider increasing the amount of characters allowed per person.

The city obtained the transcripts from Arch Wireless and then began an audit. In the case of Quon, the city found that he had exceeded his monthly character allotment by an average of 15,000 characters. The chief turned the transcripts of Quon’s texts over to internal affairs, which launched its own investigation. Internal affairs found that Quon frequently sent personal messages to his wife and to his girlfriend. These messages were often sexually explicit.

Quon, his wife, and his girlfriend sued the city, claiming that it had violated their Fourth Amendment right to be free from unreasonable search and seizure. Quon argued that he had an expectation of privacy in sending and receiving the text messages. The city argued that its policy regarding employee use of city equipment made it clear that employees had no expectation of privacy when using city computer systems.

The city requested summary judgment—a hearing based on the facts of a case, without a trial. The U.S. District Court for the Central District of California granted the summary judgment. Quon appealed the decision.

The U.S. Court of Appeals for the Ninth Circuit overturned the district court’s decision. The appeals court found that the city’s formal policy was sound but that Quon had a reasonable expectation of privacy because of Duke’s informal policy. According to the court, after Duke made it clear that he would not audit the messages as long as the officers paid for the overages, Quon could reasonably expect that his personal text messages would remain private.

The court noted that had the city wanted to determine whether the officers needed a higher character allotment, there were other options for achieving this goal. For example, the city could have warned the officers that an audit would be held the next month and that they should send and receive only work related messages. The court also suggested that the city could have said that it would view transcripts of officers’ messages after the officers had a chance to redact any personal communication. (Quon v. Arch Wireless, U.S. Court of Appeals for the Ninth Circuit, No. 07-55282, 2008)

AGE DISCRIMINATION. A decision by the U.S. Supreme Court creates an additional burden of proof for companies defending against age discrimination cases. The Court determined in this case that a company being sued for age discrimination must not only prove that it did not discriminate but also that the steps it took in making the employment decision in question were reasonable.

The case concerned a federal government contract with Knolls Atomic Power Laboratory. Under the contract, the company was charged with servicing some of the government’s nuclear warships since the 1950s. Currently, Knolls designs prototype naval nuclear reactors and trains Navy personnel to operate them.

In 1996, Knolls was ordered to reduce its work force. After more than a hundred employees accepted buyouts, Knolls still had to eliminate more than 30 jobs.

To select those who would be laid off, Knolls asked managers to score their employees on three factors: performance, flexibility, and critical skills. Individuals were then awarded extra points for years of service. Those with the lowest scores were let go. (According to court documents, these factors were defined in a way that favored younger employees.)

Of the 31 people laid off, 30 were at least 40 years old. Twenty-eight of the terminated employees sued Knolls for violation of the Age Discrimination in Employment Act (ADEA). The employees claimed that Knolls targeted older employees for layoffs. Knolls claimed that the test was designed to determine which employees would best serve the company. Under this argument, claimed Knolls, the layoffs—and the process determining who should be laid off—were a “business necessity,” and the company was, therefore, protected from liability.

A jury found in favor of the employees and awarded them $6 million in compensation. Eventually, the U.S. Court of Appeals for the Second Circuit vacated the jury verdict and found in favor of Knolls. The employees appealed the decision to the U.S. Supreme Court.

The Court overturned the appellate court’s decision and determined that the case be retried. In its ruling, the Court rejected the use of the “business necessity” exemption to the ADEA as invalid. Instead, the Court ruled that, for companies to prove that their decisions are not based on age, they must rely on a test known as “reasonable factors other than age” often abbreviated as RFOA.

Under the RFOA exemption, the company must prove that its decisions were reasonable and made for sound, nondiscriminatory reasons. This shift is important, because now a company carries the burden of proof in showing both that it did not act in a discriminatory manner and also that its decision-making process was valid. (Meacham et al. v. Knolls Atomic Power Laboratory, U.S. Supreme Court, No. 06-1505, 2008)


BORDER SECURITY. A bill (H.R. 2490) requiring that the government study the use of biometric technology in border security applications has been approved by the House of Representatives. The measure is now pending before the Senate Commerce, Science, and Transportation Committee.

Under the bill, the Department of Homeland Security (DHS) would be required to establish a pilot program to study the deployment of mobile biometric systems for use in maritime environments. The systems would be used aboard DHS vessels to check the identities of illegal aliens attempting to enter the United States.

AIRPORT SCREENING. A bill (H.R. 5909) that would change the way that DHS tests airport security screeners has been approved by the House of Representatives and is now pending in the Senate Commerce, Science, and Transportation Committee.

Under the measure, DHS must ensure that airport screeners have no advance knowledge of covert airport security tests. Other government employees not directly being tested could be notified under the bill. If the airport is not notified that a test is taking place, a covert team would be required to accompany the tester to confirm that the exercise is a test and that no security threat is present.

AVIATION SECURITY. A bill (H.R. 5982) that would require the Transportation Security Administration (TSA) to study airport security systems has been approved by the House of Representatives and is now pending in the Senate Commerce, Science, and Transportation Committee.

Under the bill, the TSA would be required to establish a working group of stakeholders—airport representatives, government officials, and industry experts—to study the use of biometric systems in secure areas of airports. The group would assess best practices and industry standards with the goal of recommending systems that could work across all airports. The group would be required to provide a report on their findings to Congress within one year after the enactment of the provision.

ADA. A bill (H.R. 3195) that would amend the Americans with Disabilities Act (ADA) has been approved by the House of Representatives. The Senate has agreed to consider the matter. The bill is designed to define certain ADA provisions and broaden the scope of the law.

Under the bill, key provisions of the ADA would be clarified. For example, current law provides that a person is considered disabled if an impairment substantially limits a major life activity. H.R. 3195 would define a “major life activity” as caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.

The bill would also mandate that the “regarded as” provision would not apply to transitory impairments expected to last six months or less. (The “regarded as” provision provides that a person is considered disabled if their employer regards them as disabled even if they are not.)

H.R. 3195 also clearly states that a disabled person would continue to bear the burden of proving that he or she is a qualified person with a disability.



REAL ID. Louisiana Governor Bobby Jindal has signed a law (formerly H.B. 715) prohibiting the state from complying with the federal REAL ID Act of 2007, which requires that states issue drivers’ licenses that meet certain standards to qualify as federally accepted ID cards.

FIREARMS. Lawmakers in Louisiana have approved and the governor has signed a bill (S.B. 51) that makes it illegal for employers to prohibit employees from storing firearms in their cars on company property. The law allows employees to keep lawfully registered firearms in their cars in any designated parking area.

This column should not be construed as legal or legislative advice.