Up-to-date information for employers on topics and issues that may affect workplace operations. The posts are current as of the date of the posting.


by Jennifer Brown Shaw and Julia C. Melnicoe | The Daily Recorder | Jan 13, 2014

We previously wrote about protecting employee privacy when responding to subpoenas for personnel records. (See “Employee Privacy: Responding to Subpoenas,” September 27, 2013.) This article addresses the related topic of employee medical privacy during litigation and the discovery process. Even if your company is not currently involved in litigation, it is essential to understand the privacy issues that may affect the organization’s defenses down the road.

Grounds for Discovery of Medical Records

“Discovery” describes the ways the parties to a lawsuit obtain and exchange information arguably relevant to the claims and defenses in the case. In employment-related lawsuits, discovery of the plaintiff-employee’s medical records may be crucial to key issues. In a disability discrimination case, for example, an employer may need to explore the employee’s medical records relating to his or her medical limitations. Or, the employee may claim the employer denied her a medically necessary extended leave.

Another medical privacy issue relates to psychological records. Many employment lawsuits include requests for damages due to “emotional distress.” Juries have broad discretion to award damages for pain and suffering. The size of the award depends in part on evidence of harm. Exploring an employee’s mental state — and any preexisting emotional issues — may be essential to the defense against such claims.

The Balance

Many plaintiffs in employment law matters allege medical conditions justifying a leave of absence or reasonable accommodation, or claim a profound emotional injury. Although they are willing to include this information in a publicly available complaint, some plaintiffs become reticent when the defendant seeks documentation supporting the claims.

If the plaintiff objects to discovery of medical information on privacy grounds, a court will balance the defendant’s need for the discovery against the right of privacy. The employer-defendant typically must make a showing of direct relevance. So, if an employee claims wrongful discharge for taking medical leave associated with cancer, the underlying medical condition is fair game. But the defendant likely will not be granted the right to explore records of unrelated cosmetic surgeries. The request’s timeframe, too, should be related to the lawsuit. Disputes may be avoided when requests are precisely drafted. Privacy concerns may be ameliorated if the defendant is willing to enter into a confidentiality agreement, or stipulated protective order.

“Garden Variety” Emotional Distress Claims

A claim of ongoing or severe emotional distress (often associated with discrimination, harassment, or wrongful termination claims) places an employee’s mental and emotional state directly in controversy. An employer may seek extensive information regarding the employee’s medications, psychological records, preexisting mental disorders, and alternative sources of stress that may have contributed to the employee’s condition. In some cases, a psychological examination also may be warranted.

Employees sometimes choose to avoid discovery of their psychological records by claiming merely “garden variety” damages. This means that the employee seeks damages only for the ordinary, transient emotions associated with adverse actions such as termination or rude jokes. The employee may agree not to present expert evidence at trial regarding emotional distress. In exchange for these limitations, the employee may argue that delving into psychological condition is not justified. Defendants and their counsel should decide whether the limitation on potential damages is a fair exchange for foregoing discovery.

“HIPAA” and California’s Confidentiality of Medical Information Act

The California Confidentiality of Medical Information Act (CMIA) and the federal Health Insurance Portability and Accountability Act (HIPAA) generally require written consent before a health care provider may release medical records. Third parties who misuse medical information without proper authorization may be liable under the CMIA for damages, and subject to administrative penalties or fines under HIPAA.

Health care providers sometimes invoke these laws (especially “HIPAA”) as a justification for refusing to release records without the patient’s signing a release. Although a compliant consent form is one way to obtain records, some plaintiffs refuse to cooperate. The law also allows for disclosure in litigation if the employer serves a subpoena with the required “Notice to Consumer,” which gives a plaintiff the opportunity to object to disclosure and seek court relief. Once the defendant obtains medical records are received through one of these methods, the defendant must protect the information, including from other employees not directly involved in the litigation.

Third-Party Privacy Issues

Employers involved in litigation also must be careful when producing medical information about third-party employees in response to discovery requests or a subpoena.
These documents not only are disclosed to the plaintiff’s counsel and anyone else counsel with whom shares this information, but also may be publicly filed in court.

Because even defendant-employers have a duty to protect their employees’ privacy, defense counsel should not automatically release third party employees’ medical files in response to discovery requests. Naturally, medical information does not belong in the “personnel file” with employment applications, performance appraisals and such. If defense counsel finds these documents, they at least initially should be withheld from production and listed on a privilege log.

Employers and their lawyers should not dismiss out of hand employees’ privacy claims. However, there are misconceptions among health care practitioners and lawyers regarding the extent to which normal privacy rights apply once someone files a lawsuit.