BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 909|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: SB 909
Author: Wright (D)
Amended: 5/12/10
Vote: 21
SENATE JUDICIARY COMMITTEE : 4-0, 5/4/10
AYES: Corbett, Harman, Hancock, Leno
NO VOTE RECORDED: Walters
SUBJECT : Investigative consumer reporting agencies:
disclosures
SOURCE : Author
DIGEST : This bill requires investigative consumer
reporting agencies to disclose, as specified, to a consumer
that the consumer's personal information may be sent
offshore for the preparation of employment background
screening reports. This bill requires investigative
consumer reporting agencies to post a privacy protection
policy on their Web site, as specified. This bill provides
consumers with a remedy if they are harmed when their
information is sent offshore, as specified.
ANALYSIS : Existing law regulates the preparation and use
of investigative consumer reports. (Civ. Code Sec. 1786 et
seq.)
Existing law requires that the person seeking an
investigative consumer report for employment purposes must
CONTINUED
SB 909
PageB
disclose information, as specified, regarding the
preparation of the report. (Civ. Code Sec. 1786.16(2).)
Existing law requires investigative consumer reporting
agencies to maintain procedures designed to avoid
violations of Civil Code Section 1786.18 and make
certifications as required under Civil Code Section
1786.16. (Civ. Code Sec. 1786.20.)
Existing law provides the liability structure for an
investigative consumer reporting agency or employer that
violates the Act. (Civ. Code Sec. 1786.50.)
This bill requires the investigative consumer reporting
agency subcontracting to an offshore company for the
purpose of running an employment background check to
disclose to the job applicant the following information:
1.The country or countries where the report, or portion
thereof, is being prepared or processed;
2.The specific information about the consumer that is being
transmitted or transferred outside of the United States
or its territories;
3.A hyperlink to the investigative consumer reporting
agency's privacy protection policy;
4.Contact information, including a name, mailing address,
e-mail address and a telephone number, of a
representative of the investigative consumer reporting
agency who can assist a consumer who is concerned that
his or her information has been compromised as a result
of being prepared or processed outside of the Untied
States or its territories; and
5.A description of the appropriate process for remedying a
case of identity theft in the jurisdiction where the
consumer resides, including the telephone number and
mailing address of any agency responsible for consumer
protection locally and nationally.
This bill requires the employer and/or investigative
consumer reporting agency to obtain the job applicant's
written consent for private information to be sent to an
offshore company for the purpose of running an employment
SB 909
PageC
background check.
This bill provides that an investigative consumer reporting
agency shall be liable to a consumer who is the subject of
a report in the event that the consumer is harmed by any
act or omission that occurs outside the United States or
its territories as a result of the investigative consumer
reporting agency preparing or processing an investigative
consumer report, or portion thereof, outside of the United
States or its territories.
This bill requires the investigative consumer reporting
agency contracting with offshore companies to prepare a
privacy policy and conspicuously post it on an Internet Web
site, as specified.
This bill provides that the investigative consumer
reporting agency shall not disclose the consumer's social
security number, except for the last four digits.
The provisions of the bill do not apply if the information
was stored, processed, or prepared outside of the United
States or its territories prior to the date the report was
requested, or was sent outside the United States or its
territories solely for the purpose of transmitting or
storing data.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/11/10)
Concerned CRAs
Privacy Rights Clearinghouse
Accucheck Investigations
Acutraq Information Services
All Background and People Checks
Alliance 2020
AmericanChecked, Inc.
APSCREEN Applicant Screening Company of America
Applicant Insight, Inc.
Ascertain Screening
Background Profiles
Baxter Research, Inc.
C3 Intelligence, Inc.
SB 909
PageD
Data Access, Inc.
DDS Inc. Employment Screening Services
EasyBackgrounds, Inc.
Edge Information Management, Inc.
EmployeeScreenIQ
Fransco Profiles
KnowMyHire.com
National Application Processing and Screening, Inc.
PreCheck, Inc.
Pre-Employment, Inc.
Proforma Screening Solutions
Verifications, Inc.
OPPOSITION : (Verified 5/11/10)
Association of California Life and Health Insurance
Companies
Axicom
California Chamber of Commerce
California Retailers Association
First American Corporation
Reed Elsevier, Inc
ARGUMENTS IN SUPPORT : According to the author's office:
Since AB 655, there has been a significant change that
was not anticipated in 2002 - that large players in
the screening industry would [undergo] a fundamental
shift in business practices and shift their operations
off-shore, to locations such as India and the
Philippines. That means that personal and
identifiable information (PII) is sent off shore in
bulk beyond the protection of the U.S. and California
privacy laws to places where data protection and
privacy is much more limited, effectively undermining
the privacy protections anticipated in 2002.
This bill is limited to just Investigative Consumer
Reporting Agencies. Although other industries may off
shore as well, an Investigative Consumer Report
directly impacts the ability of a consumer to obtain
employment and earn a livelihood, and therefore a
consumer has no choice but to give potential employers
PII. This bill is not anti-off shoring, but is meant
to promote privacy and data protection. It is also a
SB 909
PageE
disclosure bill and not a regulation bill and
therefore has no financial burden on the State of
California. Remedies for violation of this bill would
be part of the existing structure for private remedies
already contained in California law under Civil Code
Section 1786.50.
Privacy Rights Clearinghouse (PRC), a supporter of the
bill, notes that this bill has a very narrow focus and only
requires disclosures to California residents when their
information is being sent offshore as part of an employment
background screening. According to PRC:
California has led the way in preventing the misuse of
personally identifiable information in order to fight
the rising tide of identity theft. Unfortunately, all
protections cease to exist once information leaves the
United States. Many places where information may be
sent have very little privacy protection. In
addition, American consumers have virtually no ability
to enforce their privacy rights overseas. In many
[countries], there is little access to courts and it
is extremely difficult for an American consumer to
contact a foreign police department to lodge a
complaint or to obtain assistance. The lack of any
meaningful protection once U.S. data is sent offshore
is a major gap in [the] effort to combat identity
theft and to protect privacy.
ARGUMENTS IN OPPOSITION : Opponents of the bill argue
that the disclosure language required by this bill "creates
the false threat that the individual's personal information
is somehow jeopardized, if an investigative report is
prepared, stored or processed outside of the United States"
and will limit the employer's ability to conduct an
employment screening.
Opponent LexisNexis argues that "prudent employers seeking
to conduct background checks on potential employees may
avoid hiring in California altogether and look to other
states for qualified employees, rather than risk running
afoul of SB 909's provisions."
Another argument by LexisNexis is that this bill "sends the
wrong protectionist message to countries doing business in
SB 909
PageF
California?. [T]his legislation regards California's
international trade partners with suspicion and distrust."
RJG:nl 5/12/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****