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Securities Compliance Sentinel Analysis of cutting-edge securities industry issues

Securities Employees’ Social Media Access Cannot be Touched by their California Employers

Posted in Social Media, State Enforcement

On January 1, 2013, California joined Maryland and Illinois in restricting securities employers’ access to their employees’ and job applicants’ social media accounts.  This new law was announced on Twitter, and provides that an employer cannot require or request an employee or applicant to:

  • disclose a user name or password for the purpose of accessing personal social media;
  • access personal social media in the presence of the employer; or
  • divulge any personal social media, except as provided in subdivision.

The law also prohibits discharging, disciplining, or retaliating against an employee or applicant by an employer who violates this law.  Employers may still terminate or sanction an employee or applicant if there is some other law that would allow such termination or sanction.  Further, such information may still be requested if it is relevant to an investigation or allegation of employee misconduct or violation of applicable laws and regulations.  However, the information may only be used for that investigation or a related proceeding.  Additionally, in what may be somewhat of a saving grace, the law does not apply to employer-issued electronic devices. 

California joins a growing number of states who are restricting securities employers from having access to their employees’ social media.  Time will tell if this legislation is wise or opens up a giant loophole for securities fraud.