Opinion ID: 883077
Heading Depth: 1
Heading Rank: 1

Heading: disclosure of employer specific information

Text: The first issue on appeal is whether State Fund must make available to the public the employer-specific payroll and claims information that is used to calculate workers' compensation rates. In May 1991, State Fund notified MHCA members that the fiscal 1992 workers' compensation rate for class code 8829 (nursing homes) would be increased from $10.67 to $13.33. Although State Fund had already advised MHCA of the general method used to calculate these rates, MHCA requested employer-specific information, in a letter dated May 21, 1991. State Fund provided some but not all of the requested information, and on June 19, 1991, State Fund informed MHCA that it would not provide this information without a signed release from each policy holder. MHCA filed the District Court action on June 21, 1991. Appellants rely on Article II, section 9 of the Montana Constitution, which provides that no one may be deprived of the right to examine documents or observe the deliberations of public bodies except when the demand of individual privacy clearly exceeds the merits of public disclosure. State Fund relies on Article II, section 10 of the Montana Constitution, which provides that the right of individual privacy shall not be infringed without the showing of a compelling state interest, and on § 39-71-224, MCA, which exempts from disclosure public records of the Department of Labor that contain information of a personal nature. This Court has held that the only limit on the public's right to receive information is the constitutional right to privacy. Allstate Insurance Co. v. City of Billings (1989), 239 Mont. 321, 325, 780 P.2d 186, 188. We have adopted the following two-tier test for determining whether a person has a constitutionally protected privacy interest: (a) Whether the person has a subjective or actual expectation of privacy; and (b) whether society recognizes that expectation as reasonable. Great Falls Tribune Co. v. Cascade County Sheriff (1989), 238 Mont. 103, 105, 775 P.2d 1267, 1268, citing Montana Human Rights Div. v. City of Billings (1982), 199 Mont. 434, 441, 649 P.2d 1283, 1287. If we determine that a constitutionally protected privacy right exists, we then balance it against the constitutional right to know. Most of the cases in which we have balanced the public's right to know against the right to privacy concerned the privacy of individuals. In Great Falls Tribune, for example, we held that when law enforcement officers have engaged in conduct that subjects them to disciplinary action, the public's right to know outweighs law enforcement officers' privacy interests. Similarly, we held in Montana Human Rights Division that the State's interest in prohibiting employment discrimination outweighs the privacy interest of city employees who had not complained of discrimination, but whose employment records were critical to the Human Rights Division investigation of a complaint. In Engrav v. Cragun (1989), 236 Mont. 260, 769 P.2d 1224, on the other hand, we found that the public's right to know about county law enforcement operations does not outweigh the privacy interest of people whose names appeared in telephone logs and case files. Here, we must balance the public's right to know against the privacy interest of employees and employers insured by State Fund. Appellants concede that employer-specific payroll information meets our criteria for a right to privacy, but they contend that the merits of public disclosure are more important, and that the District Court wrongly held that the insured employees' and employers' right to privacy outweighs appellants' right to know. To support this contention, appellants assert that MHCA cannot assess the accuracy of State Fund classifications without access to employer-specific data. This assessment is critical, they argue, because a State Fund error regarding one employer in a class affects the workers' compensation rate for every member of that class. State Fund argues that appellants can detect errors and illegal actions on the part of State Fund by reviewing published aggregate data; therefore, no compelling state interest justifies an invasion of the insured employees' and employers' privacy. In other words, State Fund asserts, employer-specific information should not be released merely to allow MHCA to check State Fund's arithmetic. Our cases establish that corporations have a right to privacy and that a state agency may assert the privacy interest of others, including corporations. Belth v. Bennett (1987), 227 Mont. 341, 345, 740 P.2d 638, 641; Mountain States Telephone and Telegraph Co. v. Dept. of Pub. Serv. Reg. (1981), 194 Mont. 277, 634 P.2d 181. The question here is whether the privacy interests of State Fund's insured employees and employers outweigh the right of the public, as represented by appellants, to inspect aggregate payroll data and claims experience for individual employers. State Fund points to our decision, in Belth, that public access to insurance companies' financial statements should be denied because the demands of privacy outweighed the merits of public disclosure. In Belth, however, we found that the insurance companies had provided the information with the understanding that it was confidential and that comparable information was available to the public elsewhere. Here, it has not been argued that the insured employees and employers were assured of confidentiality, and comparable information is not available elsewhere. Employer-specific claims data are not available from any source, though some of the payroll data sought by appellants have been reported to the Department of Health and Environmental Sciences for health planning purposes. The District Court found that appellants' purpose in requesting employer-specific claims and payroll information is essentially an audit function, because an employer has no right to a contested case hearing when its premium rate is changed. The court concluded, therefore, that the insured employees' and employers' right to privacy outweighs appellants' right to know and that State Fund therefore is not required to release employer-specific claims or payroll information. We reverse, holding that in this case employees' and employers' right to privacy does not clearly exceed the merits of public disclosure, and that the public's right to know therefore outweighs the privacy interest. We believe, as we suggested in Mountain States Telephone and Telegraph, 634 P.2d at 187, that an order can be fashioned in such manner that the state public agencies can perform their duties with the fullest available information and at the same time disclose to the public all information required to enable citizens to determine the propriety of governmental actions affecting them. We remand this case to the District Court for an order that meets this standard.