CONCLUSIONS

Different kinds of information have varying degrees of sensitivity. Respondents recognized that companies cannot make intelligent hiring decisions in a vacuum and that information about applicants must be sought from many sources. A majority of respondents agreed that employers should have the right to contact previous employers and should have the right to make inquiries in the community about a job applicant's personal habits. Employers, however, should not have the right to inquire into an applicant's financial situation, according to 62 percent of the respondents. Respondents strongly endorsed the idea that applicants should be told what information will be sought and who will be contacted during the inquiry.

Both The Business Roundtable and the Privacy Protection Study Commission strongly believe that senior

management should review the information collec practices utilized by employees, subcontractors, independent agents. Ninety-nine percent of all manag felt the same way. Management should not turn a bi eye while employees or their agents go out into community and gather information about an applica Many believe that failure to scrutinize such procedu carefully can lead to the collection of erroneous incomplete information and can even damage an i dividual's reputation in the community.

In this author's opinion, virtually no corporation' senior management is truly aware of all personal in formation collection practices regarding employee: or job applicants, and this failing is the weakest area of employee fair Information practices. However, it is fair to state that many major corporations are rapidly moving to plug this gap in their information practices

5

As indicated in Chapter 2, slightly less than half of the respondents (45 percent) believed that employees wanted to inspect their employment records. In actual practice, 69 percent permit inspection; and when the respondents were asked whether employees should be permitted to inspect their personal records, 89 percent supported the right of inspection.

Some states offer both public and private sector employees the right to inspect their records. However, few state laws detail the means by which an employee may point out errors or cause corrections to be made. Ninety-six percent of the respondents felt that employees should have access to formal procedures for correcting errors. And where such procedures failed to resolve the disputed item to an employee's satisfaction, 95 percent of the respondents stated that employees should be permitted to file their side of the story in their records. Only one out of ten of the respondents believed that employees who would file a dispute in their records were "the sort to watch out for."

CONCLUSIONS

A majority of mangers (69 percent) stated that in their companies employees had a right to inspect their records.

It may be assumed that along with this right goes some sort of formal or informal ability to point out errors and to dispute such records. It would be ironic if a company allowed employees access to their personal records, and then denied them the right to dispute the information. Giving employees the right to place disputes in their records when requests for correction are denied is not a new concept. The Fair Credit Reporting Act already requires credit reporting agencies to allow individual consumers the right to place a 100-word statement of dispute in their files. The Carter administration is considering requiring a similar action on the part of credit grantors. The state of Michigan already has such a requirement for employers.

As was pointed out in Chapter 2, respondents felt strongly that permitting employees to inspect their records contributed to increased accuracy and better decision making. Both The Business Roundtable and the Privacy Protection Study Commission have argued that employees should be able to file a written dissent in their records and that failure to allow this would make the process of inspection and correction less than complete. Employees would be unable to counter effectively the negative material contained in their records. Without formal procedures to request corrections and to file a dispute, inspection of personal records would indeed be a right without a remedy.

7

COSTS

Since the beginning of the privacy debate, costs of complying with particular information-handling procedures have concerned all responsible parties. But little, if any, hard data on the costs of complying with privacy procedures has been presented. This is true even in the federal government, where a number of rules relating to privacy have been in force since 1975. Some models have been attempted, but for the most part the area has remained shadowy at best. There has been little explanation of why major corporations have failed to come forward with hard data, if they consider the issue of costs so important.

The survey posed a series of questions intended to determine the relative importance of costs in fair information practices. When costs were juxtaposed against ethics, 92 percent stated that ethics and fairness were the more important consideration in ensuring the proper handling' of employee information. (See Exhibit 4.) And, 50 percent of the respondents selected the extreme point of support for fairness and ethics, indicating very strong support for this premise.

Managers were also asked to comment on the statement, "The dollar costs of ensuring the protection and proper handling of employee records should be a key consideration and may legitimately limit what changes a company

5Goldstein, Robert, The Cost of Privacy, Honeywell, 1975; also Goldstein, Robert, "An Event Model of Privacy Costs," Working Paper No. 4, Information Privacy Research Center, Krannert Graduate School of Management, Purdue University, West Lafayette, Indiana, 1979.

will make." Seventy percent of the respondents disagreed with that statement, but 72 percent agreed that "allowing employees to inspect and correct their records shouldn't involve much real dollar cost to businesses." Only 15 percent stated that the dollar costs to businesses of allowing such inspection and correction would be very high. (Exhibit 5.)

Although respondents may have downplayed the issue of costs, the questions were not posed as though the privacy procedures would be mandatory. One can only conjecture how they would have responded if there had been a question, "What do you think the dollar costs would be of a new federal law designed to ensure that businesses allow their employees to inspect their records?" However, when the respondents were asked whether legislators should give careful consideration to the costs of complying with any proposed privacy or confidentiality law, 81 percent stated that such consideration should be given.

CONCLUSIONS

The respondents believed that financial costs were less relevant than ethics and fairness to the issues of employee privacy. They further believed that costs should not preclude or inhibit the establishment of privacy protection. This dovetails with their expressed concerns about fairness and openness in business dealings, and with their endorsement of the right to inspect, dispute, and control the release of personal information. They clearly felt that lawmakers had an obligation to consider costs in any future privacy legislation.