I have a question if someone can help or has an opinion.

I'm confused about a situation a friend experienced. He has a job with s company that makes gift cards and other ID cards like health cards. So apparently cvs contracted his company to produce gift cards but he had to submit paperwork to cvs detailing his personal info such as ssn# and dl# for a background check. Apparently this was a condition of that company in order to receive that contract.

What I don't get is how a company you aren't even employed by can be allowed to be given access to another company's employee records in order to conduct background checks of some kind.