The record-keeping policies and practices of private-sector employers are best understood by viewing them in the context of the employee-employer relationship. The legal framework of that relationship is contractual. That is, in theory, the employer and employee make a contract on mutually agreed terms, with termination equally available to both parties. The law of employment is based on the principles of employment at will and mutuality of obligation. Accordingly, the contract can be summarily terminated by either party.
In the public sector, these principles have been modified by civil service rules, which stipulate that government employees can be discharged only for just cause established through due process. In the private sector, they have been modified by collective bargaining. Union-management contracts have established just cause criteria for discipline and dismissal which, along with the institutionalization of arbitration, provide due process protections for some employees. Over three-quarters of all private-sector employees, however, do not have such protections.3
A private employer today may demand that applicants and employees supply detailed information about any aspect of their lives, submit to tests and examinations, and authorize the employer to acquire whatever records it wants about them from other organizations. Further, courts in some instances have upheld an employer's right to fire employees for exercising basic civil rights and privileges, e.g., for refusing to give perjured testimony, or for serving on a jury.4 . Thus, absent collective bargaining, there is no general framework in the private sector which could accommodate disputes about recorded information.5 Federal employees had such a framework before the Privacy Act of 1974 was conceived, but employees in the private sector do not.