The question going forward is whether X has overstepped their bounds in what would appear to be an overzealous attempt to cover their butts in an effort to extend the life of an ageing business model? Yes you can redact your employees personal info but the documents they demand are still the property of your corporation and are still privileged information regardless of it's size or the business activity it conducts with other parties.You can redact the personal info of your drivers when you submit your documents.
Knowing that contractors are powerless to launch any type of organized resistance the question is how far and to what extent X will violate the law as it pertains to contractors in an effort to protect it's interests?
Once again the X mentality comes front and center.......It's legal until somebody with enough power to stop you does so.