BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Martha M. Escutia, Chair
2003-2004 Regular Session
SB 1841 S
Senator Bowen B
As Introduced
Hearing Date: April 13, 2004 1
Labor Code 8
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SUBJECT
Electronic Monitoring of Employees
DESCRIPTION
This bill would require employers to give their employees
clear and conspicuous notice of the fact that they engage
in electronic monitoring of their employees.
BACKGROUND
The past few decades have seen extraordinary advances in
technology which have dramatically improved economic
productivity. As employers and employees increasingly rely
on these technologies, the opportunities for employers to
monitor employees' conduct have increased. This bill seeks
to respond to privacy concerns associated with such
monitoring by requiring that employers provide employees
with notice that they are being monitored. This is the
author's fourth attempt to legislate in this area. Her
previous bills, SB 1016 of 1999, SB 1822 of 2000, and SB
147 of 2001, were vetoed by Governor Davis.
CHANGES TO EXISTING LAW
Existing federal law prohibits any individual from
intentionally intercepting any wire, oral, or electronic
communication [18 U.S.C. 2511(1)(a)]. Various oral
communications, including almost all telephone calls, are
exempt from this prohibition. In addition, there are
several exceptions to the prohibition, including intercepts
(more)
SB 1841 (Bowen)
Page 2
obtained in the ordinary course of business, or where one
of the parties to the communication consents. Also, the
prohibition does not apply to devices which capture
information about a communication without capturing its
contents. [18 U.S.C. 2510 and 2511.]
Existing law , the California Constitution, provides every
California resident with a right to privacy. This right is
enforceable through a private right of action when a
person's "reasonable expectation of privacy" is violated.
Existing state law , which governs intrastate calls, allows
employers to monitor employee phone calls for training or
quality control purposes, or if notice of monitoring is
provided by verbal announcement or by placing a repeating
"distinct signal" on the call. Existing state law also
allows for the recording of conversations if a regular
"beep tone" is placed on the call. [Public Utilities
Commission Order 107-B.]
Existing state law provides that no employer may cause an
audio or video recording to be made of an employee in a
restroom, locker room, or room designated by an employer
for changing clothes, unless authorized by court order.
[Labor Code Sec. 435.]
Existing state law generally provides for a civil penalty
of $100 per employee per pay period for violations of any
Labor Code provision (which increases to $200 for
subsequent violations). These penalties may be recovered
by private right of action if no agency action is taken on
a violation. [Labor Code Sec. 2698 et seq.]
This bill would require an employer to provide clear and
conspicuous notice to its employees of any electronic
monitoring. This bill would also require that additional
notices be provided on an annual basis, and prior to any
material change in an electronic monitoring practice.
This bill would define "electronic monitoring" as the
collection of information concerning employee activities or
communications by any other means other than direct
observation, including the use of a computer, telephone,
wire radio, or camera.
SB 1841 (Bowen)
Page 3
This bill would provide that its notice requirement is
satisfied if each employee is given a notice that: 1)
describes the form of communication or type of computer
usage that will be monitored; 2) the means by which the
monitoring will be accomplished; 3) the kinds of
information that will be obtained; 4) the frequency of the
monitoring; and 5) the manner in which the information will
be stored, used, or disclosed. This bill would provide
that placing signs in the workplace does not constitute
sufficient notice.
This bill would exempt monitoring activities where: 1) the
employer has reasonable grounds to believe that an employee
is engaged in behavior that violates any person's legal
rights and may result in significant harm; and 2) the
monitoring will produce evidence of the employee's behavior
and is in compliance with other laws.
This bill would provide that any individual aggrieved by a
violation of its provisions has a private right of action
for actual damages, which in no case shall be less than
$5,000, punitive damages, reasonable attorney's fees and
litigation costs, and any other preliminary and equitable
relief the court deems appropriate.
COMMENT
1. Need for the bill
The author's office writes that:
Currently, there are no comprehensive laws that
protect privacy in the workplace . . . employers
are within their rights if they decide to read
employee email, look at employee personal computer
files, or use other methods to electronically
monitor employees. There is no requirement to
tell employees that their activities in the
workplace may be monitored, with the exception of
laws covering telephone use.
Recent studies show most employers monitor
employee e-mail and Internet use:
The American Management Association's 2003
E-Mail Rules, Policies and Practices Survey
SB 1841 (Bowen)
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found 52% of U.S. companies engage in some form
of e-mail monitoring of employees, compared to
only 14.7% in 1997.
According to a 2003 survey of 192 companies
conducted by the Center for Business Ethics at
Bentley College in Massachusetts, 92% of
employers monitor employee e-mail and Internet
use. While almost all of the companies surveyed
said they allow reasonable personal use of
computer and e-mail systems, less than half said
they actually define for employees what is
considered "reasonable."
The Privacy Rights Clearinghouse [PRC] adds that:
Because of advances in technology, workplace
monitoring can be virtually ubiquitous, covering
all aspects of employees' work, even extending
beyond the workplace. Monitoring can be conducted
of electronic mail, voice mail, telephone calls,
computer keystrokes, internet access, locational
tracking via GPS and RFID [radio frequency
identification device], and video surveillance.
Specific task-oriented monitoring has a limited
place in the workplace - for training and quality
control, as well as fraud prevention. However,
such monitoring need not and should not be
conducted in secret. The PRC believes that
workplace monitoring should be conducted with
transparency so that employees are clear on what
activities will be monitored. SB 1841 ensures
such transparency.
2. Opponents argue that bill is unjustified and unduly
burdensome
The California Manufacturers and Technology Associations
(CMTA) argues that the bill is conceptually flawed,
writing that:
SB 1841 would create a major administrative burden
on employers by requiring special procedures to be
set up to inform employees . . .This is a
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particularly onerous requirement for employers
given that there is no dispute that the electronic
devices belong to the company and [are] solely
intended for work. Moreover, employers have a
right and obligation to police the use of their
equipment to [e]nsure that it is not misused for .
. . unauthorized or illegal activities. It seems
to us that it is the employee who should be
seeking permission from the employer to use the
equipment for personal or non-work related use.
Supporters respond that these arguments are off the mark
because the bill does nothing to prohibit monitoring; it
only requires that notice of monitoring be provided to
employees. In addition, supporters dispute that the bill
would create a major administrative burden because the
required notice could be provided in the employee
handbook all employers provide upon commencement of
employment.
a. Administrative burden could be reduced by
eliminating annual notice requirement
With regard to administrative burden, Committee staff
believes that notice provided in the employee handbook
would be sufficient to meet the bill's requirement of a
clear and conspicuous disclosure. Employees are given
notice of many of their important rights through the
employee handbook, and it would seem to Committee staff
that disclosure of monitoring policies in the handbook
would be sufficiently "clear and conspicuous" to
satisfy the bill's requirements. The costs of an
additional disclosure in the handbook would seem to be
small.
However, the bill also requires that the notice be
provided annually. Committee staff believes that this
requirement could impose significant costs on
businesses. In addition, Committee staff is not aware
of any other disclosures that employers must provide
employees on a regular annual basis. The bill already
requires notice when monitoring practices are
materially changed, and this requirement would seem to
be sufficient to protect employees.
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SHOULD THE ANNUAL NOTICE REQUIREMENT BE DELETED FROM
THE BILL?
3. Opponents argue that the bill's exemptions are
ambiguous
The bill would allow monitoring without notice if an
employer has reasonable grounds to believe that an
employee's behavior "violates the legal rights" of any
person and may result in "significant harm" to another
person.
The California Chamber of Commerce writes that:
The language . . . that allows employers to
monitor without notice is so broad that it is
rendered ineffective . . . There is behavior that
employers have a legitimate need to monitor and
stop such as making sure that employees are
spending their work time working as opposed to
making excessive personal calls, shopping on the
internet, sending and reading email jokes or
viewing pornography. However, none of these
behaviors [sic] "violate legal rights" or
"significantly harm" the employer.
Committee staff agrees that the phrases "violate the
legal rights" and "significant harm" could be difficult
to interpret. Committee staff therefore suggests that
the exception be amended to apply only to those
situations where the employer has reasonable grounds to
believe that an employee is engaged in "unlawful"
conduct. While this would somewhat narrow the exception,
Committee staff notes that the bill does not restrict
employers' ability to monitor, only require that notice
be provided.
SHOULD THE BILL BE AMENDED TO PROVIDE AN EXEMPTION WHEN
AN EMPLOYER BELIEVES AN EMPLOYEE IS ENGAGED IN UNLAWFUL
CONDUCT?
4. Bill's remedies provision unnecessary given the recent
passage of SB 796 of 2003 (Dunn)
The bill currently provides for a minimum damage amount
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of $5,000 per violation, punitive damages, and allows for
a right of action for any individual "aggrieved" by a
violation.
Committee staff recommends that the entire remedies
section of the bill be deleted as unnecessary as a result
of the passage of SB 796 of 2003 (Dunn). SB 796 attaches
a civil penalty of one hundred dollars ($100) for each
aggrieved employee per pay period for the initial
violation and two hundred dollars ($200) for each
aggrieved employee per pay period for each subsequent
violation, which is applicable to any violation of a
Labor Code provision that does not contain its own civil
penalty. In addition, SB 796 established a private right
of action for enforcement if no action is taken on a
violation by state labor authorities, as well as
attorney's fees and costs for a prevailing private
plaintiff. Committee staff suggests that the provisions
created by SB 796 will be sufficient to ensure compliance
with the bill's provisions.
SHOULD THE BILL'S REMEDIES PROVISION BE DELETED?
5. Additional technical amendments
Committee staff suggests that the following technical
amendments be made to the bill.
a. Definition of electronic monitoring
Committee staff suggests that the definition of
electronic monitoring be clarified to require: 1) the
use of an electronic device; and 2) that the
information being collected be individually
identifiable to an employee. Committee staff believes
these amendments would be consistent with the author's
intent to protect employee privacy while avoiding the
regulation of practices the author would not wish to
regulate.
b. Definitions of employer and employee
Committee staff suggests that the definitions of
employer and employee be deleted from the bill, and
that existing definitions of employer and employee in
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Page 8
the Labor Code be used instead.
c. Intent language clarifying that bill does not impact
reasonable expectation of privacy
In order to avoid any implication that passage of this
bill validates any electronic monitoring practice which
may violate an employee's constitutional right to
privacy, Committee staff suggests that intent language
be included in the bill stating that passage of the
bill is not intended to impact a court's determination
of whether a particular monitoring practice violates an
employee's reasonable expectation of privacy.
6. Prior vetoes of similar legislation
SB 147 of 2001 (Bowen) contained provisions similar to
this bill, but required employers to obtain signed
acknowledgements of notice from employees. The bill was
vetoed by Governor Davis, who wrote that "I start from
the common-sense presumption that employees in today's
wired economy understand that computers provided for
business purposes are company property and that their use
may be monitored and controlled." Gov. Davis added that
"This bill places unnecessary and complicating
obligations on employers and may likely lead to
litigation by affected employees over whether the
required notice was provided and whether it was read and
understood by the employee."
SB 147 of 2001 was essentially identical to SB 1822 of
2000 (Bowen) and SB 1016 of 1999 (Bowen), which were both
also vetoed by Gov. Davis on similar grounds.
Support: American Civil Liberties Union; American
Federation of State,
County and Municipal Employees (AFSCME), AFL-CIO;
American Federation of Television and Radio
Artists, AFL-CIO; California Conference Board of
the Amalgamated Transit Union; California
Conference of Machinists; California Federation
of Teachers;
California Labor Federation; California
Independent Public
Employees Legislative Council; California School
SB 1841 (Bowen)
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Employees
Association; California State Association of
Electrical Workers;
California State Employees Association;
California State Pipe
Trades Council; Consumer Federation of
California; Engineers and
Scientists of California, IFPTE Local 20; Hotel
Employees,
Restaurant Employees International Union; Privacy
Rights
Clearinghouse; Professional & Technical
Engineers, IFPTE Local 20;
Region 8 States Council of the United Food &
Commercial
Workers; Teamsters; Western States Council of
Sheet Metal
Workers
Opposition:American Staffing Association; California
Chamber of Commerce;
California Manufacturers & Technology
Association; California
Staffing Professionals; Construction Materials
Association of
California; MBNA America; Motion Picture
Association of America
HISTORY
Source: Author
Related Pending Legislation: None Known
Prior Legislation: SB 147 of 2001 (Bowen), SB 1822 of
2000 (Bowen), and SB 1016 of 1999 (Bowen),
all contained provisions similar to this
bill. The bills were all vetoed by Governor
Davis.
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