Are Employees Classed as Consumers? California State Assembly Speaks to This and Other Concerns
The California State Assembly has passed several amendments to the California Consumer Privacy Act (CCPA) this legislative session. Among the total of four CCPA amendments that were passed in the Assembly this week, two have the potential to affect a large number of businesses. These bills still need to be approved in the California Senate and then be signed by the governor before they become law. If that happens, the CCPA would provide significant exemptions for employers and businesses offering loyalty programs.
Assembly Bill 25 would exempt information collected in the employment context from CCPA coverage. This bill proposes to amend the CCPA definition of “consumer” by excluding persons whose information is collected and used solely within the context of the person’s role as an employee, contractor, job applicant, or agent of a business subject to CCPA. This means that employees won’t be vested with rights under the CCPA as employees, including the rights to delete, opt-in, and request disclosure. A private right of action will also be unavailable to them as an employee, should the employer suffer a data breach.
However, when that employee’s data is collected outside of the context of employment, the employee retains all CCPA rights. Imagine the following scenario: a California resident is employed by a company where she also shops. The company is a victim of a data breach resulting from its negligence. The data breach affects its HR database, compromising employment data, and its eCommerce site, compromising customer personal information. Under AB 25, the employee would be able to sue for the latter, but not the former.
Assembly Bill 846 would preserve businesses’ ability to offer and manage loyalty and rewards programs. The CCPA prohibits businesses from discriminating against a consumer, by charging higher prices or providing a lower level of goods or services, for exercising any of the consumer’s rights. Under AB 826, this prohibition would not be construed to prevent a business from offering a different price, rate, level, or quality of goods or services if the offering is in connection with a consumer’s voluntary participation in a loyalty program. So, for example, your favorite neighborhood coffee shop will still be able to facilitate a rewards program through its mobile app to comp you a free cup o’ joe after you buy your lattes for a couple of weeks. Given the frenetic speed at which the CCPA rocketed through the legislature in 2018, it is unsurprising that there have been attempts to further contour the rough edges of the CCPA. These two amendments would bring welcome exemptions to businesses as they prepare themselves for compliance.