September 23, 2019

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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.

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About this Author

Theodore Claypoole, Intellectual Property Attorney, Womble Carlyle, private sector lawyer, data breach legal counsel, software development law
Senior Partner

As a Partner of the Firm’s Intellectual Property Practice Group, Ted leads the firm’s IP Transaction Team, as well as data breach incident response teams in the public and private sectors. Ted addressed information security risk management, and cross-border data transfer issue, including those involving the European Union and the Data Protection Safe Harbor. He also negotiates and prepares business process outsourcing, distribution, branding, software development, hosted application and electronic commerce agreements for all types of companies.

...

704-331-4910
Nadia Aram, Womble Carlyle, Intellectual Property Attorney, technology licensing lawyer, commercial agreements legal counsel, private securities law
Associate

Nadia advises clients in a variety of business transactions involving the use and commercialization of intellectual property and technology. She has experience drafting and negotiating a broad variety of contracts, including technology licenses, services, consulting and other complex commercial agreements to help clients realize the value of their assets day-to-day, and as part of strategic product and technology acquisitions and divestitures. Nadia also practices in the areas of franchise law, and advertising, sweepstakes & promotions law, including advising clients on digital media marketing to minimize the risks of advertising and marketing online.

She started at the firm as a corporate attorney with a focus on mergers and acquisitions and private securities offerings and investments, and brings her knowledge and experience of corporate matters to bear on her current practice and advice to clients on strategic transactions. Relevant industry experience includes: biotechnology, agrochemical, pharmaceutical, software, retail, manufacturing, financial and other services sectors.

919-755-2119
Tom Kierner Lawyer Womble Bond Dickinson Atlanta Fintech IP Data Privacy Payment Systems
Associate

Tom Kierner is a transactional attorney with a background in payment systems and financial regulations.  He is a member of the firm’s FinTech and IP Transaction teams in Atlanta.

Tom advises his clients on the dynamic regulatory and legal landscape for FinTech and payments companies. He also assists his clients in negotiating and drafting agreements with banks, processors, and other service providers.

He has experience handling data privacy matters on behalf of clients, including managing data breach responses. He also has experience responding to inquiries and enforcement...

404-888-7409
Taylor Ey, Intellectual property attorney, Womble Carlyle, Law Firm
Associate

Taylor is an associate in the Intellectual Property Practice Group in Womble Carlyle’s Research Triangle Park Office.

Education

J.D. | 2016 | Wake Forest University School of Law | cum laude | Notes and Comments Editor, Wake Forest Law Review, 2015-2016 | Teaching Assistant, Legal Analysis, Writing and Research I & II, Writing for Judicial Chambers

M.S. |2012 | The Ohio State University | Biomedical Engineering

B.S. | 2011 | The Ohio State University | Biomedical Engineering | Minor, Life Sciences | cum laude

919-484-2306