BILL ANALYSIS Ó
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: June 27, 2012 2011-2012 Regular
Session
Consultant: Alma Perez Fiscal:No
Urgency: No
Bill No: AB 1844
Author: Campos
As Introduced/Amended: June 20, 2012
SUBJECT
Employer use of social media
KEY ISSUES
Should the Legislature prohibit an employer from requiring or
requesting an employee or applicant for employment to disclose
personal social media information?
Should the Legislature prohibit an employer from discharging,
disciplining, threatening, or otherwise retaliating against an
employee or applicant for refusing to give personal social media
information to an employer?
PURPOSE
To establish prohibitions on requirements to disclose
information on an individual's personal social media account(s)
to an employer.
ANALYSIS
Existing federal and state law protects employees, both
prospective and current, against employment discrimination when
it involves unfair treatment because of a person's race, color,
religion, sex (including pregnancy), national origin, age,
disability or genetic information. Existing law also protects
employees against harassment by managers, co-workers, or others
in the workplace and against retaliation for complaining about
discrimination, filing a charge of discrimination, or
participating in an employment discrimination investigation or
lawsuit. (Government Code §12940, 12945, 12945.2)
Existing law prohibits employers from discriminating,
discharging or refusing to hire an employee based on an
employee's lawful conduct during nonworking hours away from the
employer's premises. (Labor Code §96 & 98.6)
Both federal and state law , through the federal Fair Credit
Reporting Act (FCRA) and the California Consumer Credit
Reporting Agencies Act (CCRAA), regulates the collection,
dissemination and use of personal and credit information
gathered by consumer credit reporting agencies. Existing law
restricts the use, with some exceptions, of credit information
for employment purposes. (Labor Code §1024.5)
Existing law further regulates anyone who collects, assembles,
evaluates, compiles, reports, transmits, transfers, communicates
information on a consumer's character, general reputation,
personnel characteristics, or mode of living, for employment
purposes, which are matters of public record. (Civic Code
§1786.53)
This Bill would establish prohibitions on the ability of an
employer to require the disclosure of information on personal
social media accounts. Specifically, this bill would:
1. Define "social media" as an electronic service or
account, or electronic content, including, but not limited
to, videos, still photography, blogs, video blogs,
podcasts, instant and text messages, email, online services
or accounts, or Internet Web site profiles or locations.
2. Prohibit an employer from requiring or requesting an
employee or applicant for employment to do either of the
following:
a. Disclose a user name or password for accessing
personal social media;
b. Accessing personal social media, whether in or
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outside of the presence of the employer.
3. Specify that nothing in the bill is intended to affect
an employer's existing rights and obligations to
investigate alleged workplace misconduct.
4. Prohibit an employer from discharging, disciplining,
threatening to discharge or discipline, or otherwise
retaliate against an employee or applicant for exercising
their right to refuse access to their personal social media
information.
COMMENTS
1. Background on Social Media in the Workplace:
The use of technology for personal and business purposes has
exploded in recent years, and with that explosion comes
challenges. The use of social media for communication through
programs such as Facebook, Twitter, LinkedIn and MySpace, has
become a phenomenon for people of all ages. Information that
was once broadcast by word or written media is now instantly
broadcast around the world, unfortunately, to the detriment of
some employers and employees.
The use of social media in the workplace can present several
problematic situations around issues of free speech,
discrimination of current and potential employees, harassment,
and even termination. Although existing law protects current
and potential employees against discrimination and/or
retaliation in the workplace, nothing specifically addresses
the issues that arise with the use of information obtained
through social media sites.
For pre-employment purposes, an employer must make hiring
decisions without regard to race, age, gender or familial
status, however, a quick search on Facebook could give the
employer this information making the employer liable for
potential hiring discrimination. For an individual that is
already employed, the National Labor Relations Act (NLRA)
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prohibits employers from restricting the rights of employees
to engage in concerted activities, such as discussions about
wages, work conditions or terms of employment. Employers may
create and adopt a policy regarding the use of social media as
it relates to their employment site(s); however, existing law
prevents employers from intruding into an employee's legal off
duty conduct. Such policies can restrict the use of social
media at work with company equipment but cannot prevent
employees from discussing the terms and conditions of their
employment with other employees using their own personal
devices on non-working time.
2. Social Media in the News and the Courts:
Recent articles have reported on cases at the national level
showing a trend of educational institutions and employers that
require current and potential students and employees to
divulge their social media user names and passwords.
According to an msnbc article, "In Maryland, job seekers
applying to the state's Department of Corrections have been
asked during interviews to log into their accounts and let an
interviewer watch while the potential employee clicks through
wall posts, friends, photos and anything else that might be
found behind the privacy wall." (Govt. agencies, colleges
demand applicants' Facebook passwords, April 20, 2012) In
this 2010 incident, the Maryland Department of Public Safety
and Correctional Services requested that Robert Collins
disclose his Facebook username and password during a
reinstatement interview following his leave of absence for a
death in the family. A complaint was filed by the American
Civil Liberties Union which stopped the practice and instead
made it voluntary.
Pietrylo v. Hillstone Restaurant Group
The issue of an employee's right to privacy with regard to his
or her social media account password was discussed in the case
of Pietrylo v. Hillstone Restaurant Group. According to court
documents, the lawsuit was filed by two employees, Pietrylo
and Marino, after they were fired from their restaurant
employer for creating a private MySpace page that allowed
employees to vent about their workplace. Since the page was
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private and could only be joined by invitation, one of the
restaurant managers asked a third employee (St. Jean) for her
MySpace password in order to access the private page. While
the employee admitted that she was not threatened, she did
state that she felt that she had to give her password to her
manager when asked. The jury ultimately found that St. Jean's
consent was coerced and ruled in favor of the former employees
(Pietrylo and Marino) in June 2009. The United States Court of
Appeals for the Third Circuit affirmed this decision in
September 2009. ÝPietrylo v. Hillstone Restaurant Group, 2009
WL 3128420 (D.N.J. 2009)]
3. Need for this bill?
It is illegal for an employer to discriminate against an
employee or applicant on the basis of lawful conduct they
engage in during nonworking hours away from the employment
site. Examples of protected lawful conduct include exercising
free speech rights or engaging in political activities while
off-duty. Although existing law affords current and potential
employees with various protections against discrimination
and/or retaliation in the workplace, nothing specifically
prohibits the use of information obtained through social media
sites. This bill would prohibit an employer from requiring or
requesting an employee or applicant to disclose information to
access a personal social media account, whether in or outside
the presence of the employer.
4. Similar Efforts at the Federal Level and in Other States:
In response to incidents such as the ones previously
mentioned, legislation was recently introduced (April 27,
2012) at the federal level which would ban such practices.
H.R. 5050: Social Networking Online Protection Act similarly
seeks to ban employers from requiring or requesting access to
the private email accounts or private social media accounts of
employees and similarly seeks to bar higher education
institutions and schools from requiring or requesting access
to the private email accounts or private social media accounts
of students.
Lawmakers in Maryland passed a bill (SB 433/HB 964) this year
which would prohibit employers from requiring that applicants
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or employees disclose personal user names or passwords for any
personal account or service. The bill would also prohibit an
employer from taking or threatening to take certain discipline
actions for an employee's refusal to disclose certain password
and related information. The bill was signed by the Governor
of Maryland and the new law takes effect October 1, 2012.
While the Maryland legislation was the first of its kind,
lawmakers in several other states have introduced similar
legislation. The State of Illinois is also considering
legislation to address the issue of password privacy. HB 3782
amends the Right to Privacy in the Workplace Act to provide
that it is unlawful for any employer to ask any prospective
employee to provide any username, password, or other related
account information in order to gain access to a social
networking website where that prospective employee maintains
an account or profile. HB 3782 passed both houses and is now
awaiting the Governor's signature of approval. Similar
legislation has been introduced in New Jersey, Massachusetts,
New York, and other states.
5. Proponent Arguments :
According to proponents, in this age of electronic
correspondence and social media, more and more of a person's
personal life is online. However, they argue, when it comes
to an employer - employee relationship, it has never been an
acceptable request for an employer to ask to see personal
correspondence or personal photos of current or prospective
employees. They argue that just because these items are now
appearing and being stored online does not make it any more
germane to determining an employee or prospective employee's
work ethic than it was in the past. Proponents further argue
that asking for access to a worker's social media account is a
major intrusion into a person's personal life by an employer.
According to proponents, this is a common sense measure that
ensures a level of privacy for employees and prospective
employee's social media accounts, especially as the law around
social media access is evolving. They believe this bill also
provides clarity for California employers in this area of
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unsettled law. Proponent believe that collective efforts must
be aimed at getting people into jobs and keeping them in jobs
and that business practices that impede those efforts, making
it more difficult for workers to get jobs and retain them,
should be discouraged.
6. Opponent Arguments :
According to the Securities Industry and Financial Markets
Association (SIFMA), while this bill is well-intended, it
conflicts with the duty of securities firms to supervise,
record, and maintain business-related communications as
required by the Financial Industry Regulatory Authority
(FINRA). They argue that if this bill passes in its current
form, firms will be in the untenable position of having to
violate either state law or their FINRA obligations. SIFMA
argues that while they have no interest in accessing employee
accounts that are used exclusively for personal use, the
problem is that many people use the same account for both
personal and business activity.
SIFMA contends that in order to protect investors, FINRA
requires, among other things, that securities firms supervise,
record and maintain their employees' business communications -
including those disseminated on social media sites. They argue
that these requirements are spelled out in several different
FINRA rules and regulatory notices and denying securities
firms access to social media accounts where business is being
conducted directly conflicts with FINRA regulations.
Additionally, they argue that it also puts customers at risk,
as it will be much harder for firms to detect serious
problems, including: (1) misleading claims by an employee,
such as the promise of an unrealistically high rate of return
on investment; (2) insider trading, Ponzi schemes and other
fraudulent activity; and (3) inappropriate conduct such as the
selling of investment products that are not approved by the
firm.
Furthermore, SIFMA argues that the bill does not address the
increasingly common scenario where a financial services
employee seeks and obtains firm approval to use his or her
personal site for business use. In these instances, firms
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must have the ability to monitor, record, and retain these
employee communications. Therefore, the opponents are
requesting an amendment to carve-out financial service firms
from the requirements of the bill which would allow them to
access a personal social media accounts or devices of a
financial services employee. They believe that this carve-out
would allow them to comply with both this bill and FINRA
regulations.
7. Committee Staff Comment, RE: Carve-Out Request
The primary purpose of the Financial Industry Regulatory
Authority, as a "self-regulatory organization," is to
establish rules and guidelines that help members comply with
federal laws, especially those promulgated by the Federal
Securities and Exchange Commission. In order to detect
potential fraud, or simply to ensure that financial services
representatives do not make misleading or improper statements
to clients, FINRA requires member firms to adopt "supervisory
procedures" that permit review of an employee's communications
with clients, including electronic communications. FINRA
requires that these procedures be "reasonably designed to
ensure that their associated persons Ýi.e. employees,
financial advisers, sales representatives, etc.] who
participate in social media sites for business purposes are
appropriately supervised." (FINRA Regulatory Notice #10-06,
pg. 7)
The Securities Industry and Financial Markets Association is
seeking an amendment that would exempt it from the provisions
of this bill. SIFMA claims that under rules promulgated by
FINRA, their members are required to monitor communications
which are increasingly conducted through social media accounts
such as Facebook, Twitter, or LinkedIn. SIFMA claims that
this bill would put them in a position of violating either
state law (with this bill) or their FINRA obligations.
However, upon review of the federal rules it does not appear
that a special exemption is needed for this industry. At the
outset, it should be noted that FINRA is not a governmental
entity but a private "self-regulatory organization." Its
rules are neither federal statutes nor federal regulations.
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Therefore, this bill would not appear to place California law
in conflict with federal rules. FINRA rules do, however, have
some consequences since violators are subject to FINRA-imposed
fines and disciplinary actions.
Moreover, preemption would appear not at issue, since the
provisions of this bill do not appear to be in any conflict
with FINRA rules. FINRA clearly recognizes that if they
permit employees to use personal accounts for business
purposes , then that member has an obligation to "supervise and
retain those communications." (Regulatory Notices #07-59, pg.8
and #10-06, pg. 7.) FINRA states that:
"Firms must adopt policies and procedures reasonably
designed to ensure that their associated persons who
participate in social media sites for business purposes are
appropriately supervised, have the necessary training and
background to engage in such activities?.Firms must have a
general policy prohibiting any associated person from
engaging in business communications in a social media site
that is not subject to the firm's supervision." (FINRA
Regulatory Notice #10-06, pg. 7)
This bill would prohibit an employer from requiring or
requesting an employee or applicant to disclose information to
access a personal social media account. Thus, importantly for
the industry's request to be carved out, FINRA does not
require members to demand access to those personal accounts.
Instead, FINRA recommends that employers avoid this problem
altogether by expressly prohibiting employees from using
personal accounts for business purposes. It seems that in
order to avoid these types of situations, these companies
could establish policies requiring employees to only use
company accounts for business purposes.
FINRA guidelines even recommend the use of blocking technology
to reinforce the policy against employee use of personal
accounts for business purposes. (Regulatory Notice #07-59,
pgs. 8-9.) It appears that FINRA assumes that employers
cannot simply demand access to personal accounts; otherwise
theses blocking mechanisms would be unnecessary.
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As this bill moves forward, the author may wish to discuss
these concerns with the financial services industry, but at
present it does not appear merited to have this one industry
exempted from the measure.
8. Prior and Related Legislation :
SB 1349 (Yee) of 2012: Heard in Assembly Judiciary Committee
on June 26, 2012
SB 1349, as proposed to be amended, no longer addresses the
social media privacy issues pertaining to employees and job
applicants. The author, recognizing those concerns have been
addressed in this bill (AB 1844), has agreed to defer those
issues to this complimentary measure. Thus SB 1349 now
singularly addresses the privacy issues surrounding higher
education. It targets the privacy rights of California
college students, prospective students and student groups. SB
1349 has been referred to the Assembly Committees on Judiciary
and Higher Education.
AB 22 (Mendoza) of 2011: Chaptered
AB 22 established prohibitions, with some exceptions, on an
employer's ability to utilize consumer credit reports for
employment purposes.
SUPPORT
American Federation of State, County and Municipal Employees,
AFL-CIO
California Association for Health Services at Home
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Labor Federation
California Society of Association Executives
California Teachers Association
California Teamsters Public Affairs Council
California Workforce Association
Consumer Action
Engineers and Scientists of California, IFPTE Local 20
International Longshore and Warehouse Union
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Senate Committee on Labor and Industrial Relations
Jockey's Guild
Privacy Rights Clearinghouse
Professional & Technical Engineers, IFPTE Local 21
South Bay AFL-CIO Labor Council
State Building and Construction Trades Council of California
UNITE HERE. AFL-CIO
United Food & Commercial Workers Western States Council
Utility Workers Union of America Local 132
OPPOSITION
Financial Industry Regulatory Authority
Securities Industry and Financial Markets Association
Hearing Date: June 27, 2012 AB 1844
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Senate Committee on Labor and Industrial Relations