BILL ANALYSIS
SB 1841
Page 1
Date of Hearing: June 16, 2004
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Paul Koretz, Chair
SB 1841 (Bowen) - As Amended: June 8, 2004
SENATE VOTE : 23-13
SUBJECT : Electronic monitoring of employees.
SUMMARY : Requires employers to give their employees clear and
conspicuous notice of the fact that they engage in electronic
monitoring of their employees. Specifically, this bill :
1)Prohibits employers from engaging in electronic monitoring of
employees without first providing notice to the employees.
2)Subjects employers to the liability set forth in the Labor
Code Private Attorneys General Act of 2004 for failing to
provide notice of electronic monitoring of employees.
3)Allows an employer to conduct electronic monitoring without
notice to an employee if the employer has reasonable grounds
to believe the following:
a) A particular employee is engaged in unlawful conduct.
b) Electronic monitoring will produce evidence of the
employee's unlawful conduct and will be conducted in
accordance with other applicable state and federal laws.
4)Defines "electronic monitoring" as the collection of
individually identifiable information concerning employee
activities or communications through the use of an electronic
device including, but not limited to, a computer, telephone,
wire, radio, camera, or electromagnetic, photo-electronic, or
photo-optical system.
5)Defines "employee" to include, but is not limited to, an
individual employed by the state or any subdivision thereof,
any county, city, city and county, including any charter city
or county, and any school district, community college
district, municipal or public corporation, political
subdivision, or the University of California.
6)Requires an employer, before implementing a material change in
an electronic monitoring practice, to provide notice to all
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employees who will be subject to electronic monitoring as a
result of the change in practice.
7)Provides that the notice requirement is satisfied if each
employee is given a notice that does the following:
a) Describes the form of communication, type of computer
usage, or type of electronic device that will be monitored.
b) The kinds of information that will be obtained.
8)Provides that placing signs in the workplace does not
constitute sufficient notice.
9)Provides that the provisions of the bill may not be construed
as enhancing or diminishing an employee's reasonable
expectation of privacy under state and federal law.
10)Provides that an employer who provides notice to employees of
the monitoring or recording of telephone conversations
pursuant to the California Public Utilities Commission's
General Order 107-B is deemed to be in compliance with the
notice requirements as they relate to the monitoring or
recording of employee telephone conversations.
EXISTING LAW
1)Provides, under Article 1 of the California Constitution,
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.
2)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.
3)Allows for the recording of conversations if parties to a
conversation are notified of recording by distinct "beep tone"
or recorded message (California Public Utilities Commission
General Order 107-B).
4)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,
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unless authorized by court order.
5)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.
EXISTING FEDERAL LAW prohibits any individual from intentionally
intercepting any wire, oral, or electronic communication.
Various oral communications, including almost all telephone
calls, are exempt from this prohibition. In addition, there are
several exceptions to the prohibition, including intercepts
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.
FISCAL EFFECT : According to the Senate Appropriations
Committee, actual costs to the state as an employer are unknown.
This bill may require the state to amend its current
notification policy to apply to any electronic monitoring.
COMMENTS :
The author's 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. For example, The American Management
Association's 2003 E-Mail Rules, Policies and Practices Survey
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
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they actually define for employees what is considered
"reasonable."
Arguments in Support
The Privacy Rights Clearinghouse (PRC) argues 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."
Arguments in Opposition
The California Manufacturers and Technology Associations 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 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."
Prior Legislation
Provisions similar to this bill were contained in SB 147 (Bowen)
of the 2001,
SB 1822 (Bowen) of the 2000, and SB 1016 (Bowen) of the 1999.
These bills were all vetoed by Governor Davis. However, those
bills required employers to obtain signed acknowledgements of
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notice from employees. This bill does not require signed
acknowledgments.
Staff Recommendation
This bill was recently amended to reference the Labor Code
Private Attorneys General Act of 2004 (commencing with Labor
Code 2698) as a means of providing a penalty for any violation
of the notice requirement. However, the Act automatically
establishes and provides for civil penalties for provisions of
the Labor Code where there is no specific penalty already
provided [Labor Code 2699 (e)]. Therefore, it is technically
not necessary to reference the Act directly and the author may
wish to address this issue with an amendment.
REGISTERED SUPPORT / OPPOSITION :
Support
American Civil Liberties Union
American Federation of State, County and Municipal Employees
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 Independent Public Employees Legislative Council
California Labor Federation, AFL-CIO
California School Employees Association
California State Association of Electrical Workers
California State Employees Association
California State Pipe Trades Council
California Teachers Association
California Teamsters Public Affairs Council
Clerical Workers of the University of California
Coalition of University Employees
Consumer Action
Consumer Federation of California
Engineers and Scientists of California, IFPTE Local 20
Hotel Employees, Restaurant Employees International Union
Privacy Rights Clearinghouse
Professional & Technical Engineers, Local 21
Region 8 State Council of the United Food & Commercial Workers
Western States Council of Sheet Metal Workers
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Opposition
American Staffing Association
California Bankers Association
California Chamber of Commerce
California Manufacturers & Technology Association
California Staffing Professionals
Construction Materials Association of California
Motion Picture Association of America, California Group
Analysis Prepared by : Nick Louizos / L. & E. / (916) 319-2091