Minnesota Supreme Court Grants Unions Access To Private Company Payroll Records, etc. Produced Under State Prevailing Wage Rate Law

June 2009

In a very disturbing decision for private contractors doing business in the State of Minnesota on publicly funded projects, the Minnesota Supreme Court recently held that a union had a right to payroll records - including the names and addresses of a contractor's employees - under the Minnesota Government Data Privacy Act (MGDPA).

Minnesota's Prevailing Wage Law, similar to most states (and the Federal Davis-Bacon Act as it pertains to federally funded projects), requires that contractors on state-funded construction projects pay their employees the area's prevailing wages while working on such projects. To ensure compliance, state and local government officials often require that contractors furnish payroll records, including the names, addresses, social security numbers, etc. of all employees working on a covered project. Construction labor unions have for some time attempted to use the MGDPA as a means to gain access to this very private information. The unions say they want the information to ensure compliance with prevailing wage laws, but non-union contractors know unions use names and addresses of non-union workers for organizing purposes. Sadly, the Court's decision has just handed these unions an incredible marketing tool while trampling the rights of employees in the private sector.

The Court's decision in the case, IBEW Local 292 v. City of St. Cloud, and Design Electric, Inc., turned on a literal reading of the MGDPA, whereby all information that is not expressly declared "private" is presumed to be "public" and therefore accessible to virtually anyone, unions included. The Court acknowledged an "anomaly" created by its decision, whereby personal information for public employees was private and not subject to disclosure, but its decision declared personal information "public" for all employees of private employers. The Court simply stated that this disparate treatment of public vs. private employees was the legislature's doing.

In response to this troublesome ruling, a move is already afoot to amend the law to give employees of private employers the same privacy rights as are enjoyed by employees of public entities. However, it is unlikely anything will get done any time soon, if at all, given the make-up of the Minnesota legislature. In the meantime, there is little private contractors can do except to resist giving over employee names, addresses, etc. to government officials on public works projects unless required to do so. We recommend offering on-site inspections to government representatives to ensure compliance with prevailing wage laws. Of course this approach requires some cooperation from government representatives on any given project, which may or may not occur. Another idea would be to identify employees only by social security numbers, which are considered private under the MGDPA and are not subject to disclosure. Again, this approach requires the cooperation of the government.