New California Laws Govern Employer Access To Personal Social Media Accounts of Employees

The social media revolution continues to be born out of California.  On January 1, 2013, two laws regulating social media go into effect altering the legal landscape concerning employees’ use of facebook, twitter and other accounts.  California Assembly Bill 1844 (“AB 1844”) “prohibit[s] an employer from requiring or requesting an employee or applicant for employment to disclose a username 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.” Under this new law, an employer cannot request or require an employee or an applicant to divulge his personal social media account information.  The law does contain an exception for situations where an employer “reasonably believe[s] it to be relevant to an investigation of allegations of employee misconduct or employee violation of applicable laws and regulations, provided that the social media is used solely for purposes of that investigation or a related proceeding.”

Senate Bill 1349 has a narrower reach, as it applies only to public and private postsecondary educational institutions.  Under SB 1349, those educational institutions are prohibited from requiring students or prospective students to disclose their personal user names or passwords, or to divulge personal social media information and they must post their social media policy on their website. 

Both laws have very broad definitions of “social media, which includes an “electronic service or account, or electronic content . . . videos, still photographs, blogs, video blogs, podcasts, instant and text messages, email, online services or accounts, or Internet Web site profiles or locations.”  Arguably, that covers all digital content whether it is on the internet, a cell phone, an e-mail account or otherwise.  So, while the State has publicized these laws as governing social media content, in fact, they have a much broader reach.  

However, the laws are not unlimited in their application.  For example, the laws do not prohibit employers from reviewing public social media accounts held by employees, nor do they regulate the ability of an employer to discipline an employee based on content posted on a public social media page (though other laws may).  Indeed, the law specifically allows employers to demand passwords where they reasonably believed to be necessary to conduct an investigation into workplace misconduct.  Finally, the laws apply only to “personal” social media accounts, so an employer could demand passwords for a work-related account

Nonetheless, California employers should ensure that employees who interview applicants and HR professionals fully understand the laws, their scope and their prohibitions.  Employers should exercise particular caution when seeking access to employee’s personal social media accounts.

- Dan Handman  (Los Angeles)

Another Employer-Friendly Arbitration Decision From The U.S. Supreme Court

The U. S. Supreme Court continued its trend of pro-employer arbitration decisions in Nitro Lift Technologies, LLC v. Eddie Lee Howard, finding that the federal policy favoring arbitration trumped a state law disfavoring the enforcement of non-compete agreements.  Nitro-Lift brought a demand for arbitration against two of its former employees, located in Oklahoma, who went to work for a competitor.  Both had entered into confidentiality and non-compete agreements that contained an arbitration clause.  The former employees responded by suing Nitro-Lift in Oklahoma state court for a declaratory judgment that the non-compete agreements were unenforceable and void. The trial court dismissed the complaint in light of the valid arbitration clauses, but the Oklahoma Supreme Court reversed, finding that an Oklahoma statute which limits the enforceability of non-compete agreements required judicial review of the agreement – not an arbitral review. 

The U.S. Supreme Court vacated that decision and forced all matters related to the non-compete agreements to be arbitrated. It found that “the validity of [a] contract, as distinct from attacks on the validity of the arbitration clause itself, are to be resolved ‘by the arbitrator in the first instance, not by a federal or state court.’”  It vacated the decision because the Oklahoma courts decided the validity of the non-compete agreements when the only issue properly before it was the enforceability of the arbitration clause. 

The Court went one step further, however.  It re-affirmed the notion that “when state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by [federal law].”

What is the impact for California employers?  It was just over a year ago that the Supreme Court vacated the California Supreme Court’s decision holding that class action waivers in arbitration agreements were unenforceable.  At least two California courts have taken that lead and have upheld class action arbitration waivers, but in one other decision, a California court found that a claim under the Private Attorney’s General Act could not be compelled to arbitration.  This decision raises the stakes on all of those courts and signals the courts willingness to strike down any decision which  

- Dan Handman (Los Angeles)

NLRB Judge Broadens Ruling Prohibiting Class Action Waivers

An NLRB Administrative Law Judge has issued a decision that significantly broadens the Board’s earlier decision that an arbitration agreement prohibiting class actions violates Section 7 of the Act.  Were this decision to be approved by the full Board, it could have serious implications for both non-union and union employers. 

Earlier this year, in D.R. Horton, the Board found that arbitration provisions which prohibit employees from bringing class actions can violate Section 7 of the National Labor Relations Act.  That section of the Act protects the rights of employees engage in so-called concerted, protected activities.  The D.R. Horton decision was notable because, among other things, it appeared to contradict a recent decision from the U.S. Supreme Court in AT&T Mobility , LLC v. Concepcion, which found a class action waiver in an arbitration agreement to be lawful.

This ALJ decision was significant because of the nature of the arbitration policy at issue.  Unlike D.R. Horton,  employees were not required to sign arbitration agreements, but were allowed to opt out of the process.  As a practical matter, therefore, they were not forced to waive their right to bring class action claims. 

Yet, the ALJ found that the provision was “an illusion” because the process was “convoluted” and because employees would be unable to identify others who had also opted out.  Because of that, he found that the agreement still required employees to forfeit their right to engage in concerted, protected activity and ordered the company to remove the prohibition against class or collective actions and to notify all employees of the change. He also ordered the employer to notify all arbitral or judicial tribunals where it has pursued enforcement of the clause that it desires to withdraw the request.

This decision will almost certainly be reviewed by the full Board and potentially by one of the U.S. Courts of Appeal.  The D.R. Horton case is presently being reviewed by the U.S. Court of Appeals for the Fifth Circuit.  At least one California court has already rejected arguments that the D.R. Horton decision invalidates otherwise enforceable class action waivers in arbitration agreements.

- Dan Handman (Los Angeles)