BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 1844
Author: Campos (D), et al.
Amended: 8/22/12 in Senate
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMM. : 5-0, 6/27/12
AYES: Lieu, DeSaulnier, Leno, Padilla, Yee
NO VOTE RECORDED: Wyland, Runner
SENATE FLOOR : 37-0, 8/20/12
AYES: Alquist, Anderson, Berryhill, Blakeslee, Cannella,
Corbett, Correa, De León, DeSaulnier, Dutton, Emmerson,
Evans, Fuller, Gaines, Hancock, Harman, Hernandez, Huff,
Kehoe, La Malfa, Leno, Liu, Lowenthal, Negrete McLeod,
Padilla, Pavley, Price, Rubio, Runner, Steinberg,
Strickland, Vargas, Walters, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Calderon, Lieu, Simitian
ASSEMBLY FLOOR : 73-0, 5/10/12 - See last page for vote
SUBJECT : Employer use of social media
SOURCE : Author
DIGEST : This bill prohibits an employer from requiring
or requesting an employee or applicant for employment to
disclose a user name or password for the purpose of
accessing personal social media, to access personal social
media in the presence of the employer, or to divulge any
personal social media. This bill also prohibits an
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employer from discharging, disciplining, threatening to
discharge or discipline, or otherwise retaliating against
an employee or applicant for not complying with a request
or demand by the employer that violates these provisions.
Senate Floor Amendments of 8/22/12 specify that,
notwithstanding any other provision of law, the Labor
Commissioner, who is Chief of the Division of Labor
Standards Enforcement, is not required to investigate or
determine any violation of the provisions of this bill.
Senate Floor Amendments of 8/20/12 provide further clarity
specifying that the employer may request an employee to
divulge personal social media reasonably believed to be
relevant to an investigation, provided that the social
media is used solely for purposes of that investigation or
a related proceeding. These amendments are technical and
clarifying in nature.
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 Section 12940, 12945, and
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 Section 96 and 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 Section
1024.5)
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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. (Civil Code Section 1786.53)
This bill establishes prohibitions on the ability of an
employer to require the disclosure of information on
personal social media accounts. Specifically, this bill:
1. Defines "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. Prohibits 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. Access personal social media, in the presence of
the employer.
C. Divulge any personal social media.
3. Specifies that nothing in the bill is intended to affect
an employer's existing rights and obligations to
investigate alleged workplace misconduct or violation of
applicable laws and regulations.
4. Specifies that nothing in this bill precludes an
employer from requiring or requesting an employee to
disclose a username, password, or other method for the
purpose of accessing an employer-issued electronic
device.
5. Prohibits an employer from discharging, disciplining,
threatening to discharge or discipline, or otherwise
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retaliate against an employee or applicant for
exercising their right to refuse access to their
personal social media information. However, this bill
does not prohibit an employer from terminating or
otherwise taking an adverse action against an employee
or applicant if otherwise permitted by law.
6. Provide further clarity specifying that the employer may
request an employee to divulge personal social media
reasonably believed to be relevant to an investigation,
provided that the social media is used solely for
purposes of that investigation or a related proceeding.
Background
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)
prohibits employers from restricting the rights of
employees to engage in concerted activities, such as
discussions about wages, work conditions or terms of
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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.
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
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
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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)]
Comments
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 prohibits 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.
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 prohibits employers from requiring that
applicants or employees disclose personal user names or
passwords for any personal account or service. The bill
also prohibits an employer from taking or threatening to
take certain discipline actions for an employee's refusal
to disclose certain password and related information. The
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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.
Senate Labor and Industrial Relations Committee staff
comment: 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
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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. 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 prohibits 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.
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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, pages 8-9.) It appears that FINRA assumes
that employers cannot simply demand access to personal
accounts; otherwise theses blocking mechanisms would be
unnecessary.
Related Legislation
AB 22 (Mendoza, Chapter 724, Statutes of 2011) established
prohibitions, with some exceptions, on an employer's
ability to utilize consumer credit reports for employment
purposes.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/23/12)
American Federation of State, County and Municipal
Employees, AFL-CIO
California Association for Health Services at Home
California Chamber of Commerce
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
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
TechNet
UNITE HERE - AFL-CIO
United Food & Commercial Workers Western States Council
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Utility Workers Union of America Local 132
OPPOSITION : (Verified 8/23/12)
Financial Industry Regulatory Authority
Securities Industry and Financial Markets Association
ARGUMENTS IN SUPPORT : 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 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.
ARGUMENTS IN OPPOSITION : 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
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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
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.
ASSEMBLY FLOOR : 73-0, 05/10/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Campos, Carter, Cedillo,
Chesbro, Conway, Davis, Dickinson, Donnelly, Eng, Feuer,
Fong, Fuentes, Beth Gaines, Galgiani, Garrick, Gatto,
Gordon, Gorell, Grove, Hagman, Halderman, Hall, Harkey,
Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman,
Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma,
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Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Norby, Pan, Perea, Portantino, Silva,
Skinner, Smyth, Solorio, Swanson, Torres, Valadao,
Wagner, Wieckowski, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Charles Calderon, Cook, Fletcher,
Furutani, Jeffries, Olsen, V. Manuel Pérez
PQ:m 8/23/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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