Case No. VFA-0538, 27 DOE ¶ 80,2447

December 16, 1999

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner: The Valley Times

Date of Filing: November 17, 1999

Case Number: VFA-0538

On November 17, 1999, The Valley Times (The Times), a newspaper located in Pleasanton, California, completed the filing of an Appeal from a determination that the Albuquerque Operations Office (Albuquerque) of the Department of Energy (DOE) issued to it on October 6, 1999. In that determination, Albuquerque denied in part requests for information that The Times filed under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented by the DOE in 10 C.F.R. Part 1004. This Appeal, if granted, would require the DOE to release the withheld information.

The FOIA generally requires that documents held by the federal government be released to the public upon request. However, Congress has provided nine exemptions to the FOIA that set forth the types of information agencies are not required to release. Under the DOE’s regulations, a document exempt from disclosure under the FOIA shall nonetheless be released to the public whenever the DOE determines that disclosure is not contrary to federal law and is in the public interest. 10 C.F.R. § 1004.1.

I. Background

In its FOIA requests, The Times asked for the names and salaries of all Sandia National Laboratories (SNL) employees, and the numbers of employees at SNL’s California site whose salaries fall within each of the following ranges: $0 to $25,000; $25,001 to $50,000; $50,001 to $100,000; $100,001 to $150,000; and over $150,000. SNL is operated for the DOE by Sandia Corporation, which is a subsidiary of Lockheed Martin Company.(1) In its October 6, 1999 response, Albuquerque identified

as responsive to The Times’ request Sandia Corporation’s Report of Compensation, dated March 26, 1999. Sandia Corporation submitted this Report to the DOE in accordance with DOE Order 350.1, Contractor Human Resources Management Program, for contractor employee compensation information. Albuquerque released portions of this document to The Times, including the numbers of all Sandia Corporation employees whose salaries fall within the specified ranges, and a listing of all salaries in excess of $80,000. However, Albuquerque withheld information pertaining to employees’ names, occupational codes and job titles pursuant to Exemptions 4 and 6 of the FOIA. 5 U.S.C. § 552(b)(4), (b)(6). In its Appeal, The Times contests Albuquerque’s application of these Exemptions.

II. Analysis

A. Exemption 4

Exemption 4 shields from mandatory public disclosure “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552(b)(4). In order to qualify under Exemption 4, a document must contain either (a) trade secrets or (b) information which is “commercial” or “financial,” “obtained from a person,” and “privileged or confidential.” National Parks & Conservation Ass’n. v. Morton, 498 F.2d 765 (D.C. Cir. 1974) (National Parks). In National Parks, the United States Court of Appeals for the District of Columbia Circuit found that commercial or financial information submitted to the federal government involuntarily is “confidential” for purposes of Exemption 4 if disclosure of the information is likely either (i) to impair the government’s ability to obtain necessary information in the future or (ii) to cause substantial harm to the competitive position of the person from whom the information was obtained. Id. at 770; Critical Mass Energy Project v. NRC, 975 F.2d 871, 879 (D.C. Cir. 1992), cert. denied, 507 U.S. 984 (1993) (Critical Mass). By contrast, information that is provided to an agency voluntarily is considered “confidential” if “it is of a kind that the provider would not customarily make available to the public.” Critical Mass, 975 F.2d at 879. As previously stated, the Report of Compensation was submitted in compliance with a DOE Order. It was therefore involuntarily submitted, and we will employ the National Parks test in determining whether Albuquerque properly applied Exemption 4. It is undisputed that the withheld information is “commercial” in nature, and that it was submitted by a “person,” as that term is used in Exemption 4. There is no claim that the withheld data are privileged in nature; therefore, unless it is “confidential,” the information may not be withheld under this Exemption.

In its Appeal, The Times disputes Albuquerque’s finding that the withheld information is confidential because its release would cause substantial harm to Sandia Corporation’s competitive position. The Times argues that Sandia Corporation is a “government-funded institution” that competes for funding “primarily with other government-funded laboratories and universities, most of which release salary information on a regular basis.” Appeal at 1. The Times concludes that release of the information would not result in a competitive disadvantage for Sandia Corporation. We do not agree. As an initial matter, we are not convinced by The Times’ unsupported assertions concerning the practices of other laboratories. Moreover, we believe this is the type of information typically kept confidential by private concerns. Release of the withheld names and job codes would inform competitors and other technology-based companies of the salary levels of specific Sandia Corporation employees, thereby making it easier to hire them away. Losing highly qualified employees could damage Sandia Corporation’s ability to meet its current contractual obligations or to compete for future government contracts. See, e.g., Glen M. Jameson, 26 DOE ¶ 80,236 (1997). We find that Albuquerque properly applied Exemption 4 in this case.

B. Exemption 6

Exemption 6 shields from disclosure “[p]ersonnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.” 5 U.S.C.§ 552(b)(6); 10 C. F. R. § 1004.10(b)(6). The purpose of Exemption 6 is to “protect individuals from the injury and embarrassment that can result from the unnecessary disclosure of personal information.” Department of State v. Washington Post Co., 456 U.S. 595, 599 (1982).

In order to determine whether information may be withheld under Exemption 6, an agency must undertake a three-step analysis. First, the agency must determine whether a significant privacy interest would be invaded by the disclosure of the record. If no privacy interest is identified, the record may not be withheld pursuant to Exemption 6. Ripskis v. Department of HUD, 746 F.2d 1, 3 (D.C. Cir. 1984). Second, the agency must determine whether release of the document would further the public interest by shedding light on the operations and activities of the government. See Hopkins v. Department of HUD, 929 F.2d 81, 88 (2d Cir. 1991); Department of Justice v. Reporters Comm. for Freedom of the Press, 489 U.S. 749 (1989) (Reporters Committee); FLRA v. Department of Treasury Financial Management Service, 884 F.2d 1446, 1451 (D.C. Cir. 1989), cert. denied, 110 S. Ct. 864 (1990). Finally, the agency must weigh the privacy interests it has identified against the public interest in order to determine whether the release of the record would constitute a clearly unwarranted invasion of personal privacy. Reporters Committee, 489 U.S. at 762-770. See also Frank E. Isbill, 27 DOE ¶ 80,215 (1999); Sowell, Todd, Lafitte and Watson LLC., 27 DOE ¶ 80,226 (1999) (Sowell).

Applying these standards to the facts of this case, we believe that the individuals named in the report have a significant interest in maintaining the confidentiality of their employment status and salary level. Unlike federal government employees, whose names, job titles, work stations and salaries must be released under the FOIA (see 5 C.F.R. § 293.311), private sector employees have a reasonable expectation of privacy concerning the identity of their employers and the amounts of money that they are being paid. See Sowell (disclosure of names, social security numbers, or addresses of government contractor employees would constitute an unwarranted invasion of personal privacy); see also Sheet Metal Workers v. Department of Veterans Affairs, 135 F.3d 891 (3rd Cir. 1998); Painting and Drywall Work Preservation Fund v. Department of Housing and Urban Dev., 936 F.2d 1300 (D.C. Cir. 1991) (the release of contractor employees names and addresses would constitute a substantial invasion of privacy). Therefore, we find that there is a significant privacy interest in the identities of contractor employees and their salaries.

Next, we do not believe that release of this information would further the public interest by shedding light on the operations of the federal government. Although the data might provide insights into Sandia Corporation’s workforce composition and employment practices, Sandia Corporation is not a government agency, but is instead, as previously stated, a wholly-owned subsidiary of Lockheed Martin Company. The Times argues that because Sandia Corporation receives government funding and performs a vital function, it should be considered a government agency for purposes of the FOIA. We do not agree. The federal government contracts with a large number of private entities to provide a variety of important, and sometimes vital, goods and services. The Times’ argument, if carried to its logical conclusion, would largely erase the distinction between government agencies and these private entities. The FOIA does not require such a result.

Because there is a significant privacy interest in maintaining the confidentiality of the withheld information, and because it does not shed light on the operations of government, release of the Sandia Corporation employees’ names and salaries would constitute a clearly unwarranted invasion of personal privacy. Albuquerque correctly applied Exemption 6 in withholding this information. For the reasons set forth above, we will therefore deny The Times’ Appeal.

It Is Therefore Ordered That:

(1) The Freedom of Information Act Appeal filed by The Valley Times, Case No. VFA-0538, on November 17, 1999, is hereby denied.

(2) This is a final Order of the Department of Energy from which any aggrieved party may seek judicial review pursuant to the provisions of 5 U.S.C. § 552(a)(4)(B). Judicial review may be sought

in the district in which the requester resides or has a principal place of business, or in which the agency records are situated, or in the District of Columbia.

George B. Breznay

Director

Office of Hearings and Appeals

Date: December 16, 1999

(1)In its FOIA request and its Appeal, The Times refers to SNL as being the employer of the individuals whose salaries the Times seeks to learn. Actually, these people are Sandia Corporation employees, and shall be referred to as such in this Decision.