Recently, several states have
begun to enact laws that prohibit companies from monitoring their employees'
personal social media accounts. The
impetus of this spate of legislation was to protect an individuals' privacy and
to stop companies from asking for an employee's social media passwords.
Last year, California, Illinois,
Maryland, and Michigan adopted social media privacy laws. Utah's social media privacy law took effect
this month. Thirty-five other states
have similar privacy laws at various stage of the process. Those who support these social media privacy
laws say that the laws are necessary to protect employees--even when the
employer may be the subject of social media messages made using an employee's
personal account. They say that giving
employer's access to an employee's social media accounts is akin to asking to
review the employee's photo albums on a regular basis, or listening in to
his/her conversations.
Securities regulators are seeking to create exemptions to
state laws that allow certain financial firms to sidestep bans on looking at
personal social media accounts of employees.
According to the Financial Industry Regulation Authority (the Wall
Street authority that regulates Wall Street), financial firms need to follow up
on "red flags" indicating that an employee is misusing his/her
personal account. Apparently, FIRA
fears that employees will provide financial advice on Facebook or Twitter which
would lead to an unregulated and unchecked avenue for these employees to create
Ponzi schemes and other frauds. Of
course, the SEC recently issued a new guidance that allows companies to use
social media to disseminate market information.
The privacy right protection laws promulgated by the states would
prohibit or hinder efforts to monitor and regulate those schemes.
The legislation does provide an exception when the company
may be under an investigation for alleged employee misconduct. There is also a question as to whether the
Federal regulations allowing for monitoring of communications by securities
sellers and the like preempts the state privacy laws. Whatever the ultimate outcome between these
competing interests, it is clear that the state of the law will be unclear for quite
a while.
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