May 4, 1993
TO: OPERATIONS COMMITTEE NO. 19-93
SEC RULES COMMITTEE NO. 43-93
TRANSFER AGENT ADVISORY COMMITTEE NO. 33-93
RE: PROPOSED ELECTRONIC MONITORING LEGISLATION
__________________________________________________________
Attached for your review is a copy of H.R. 1900, the
"Privacy for Consumers and Workers Act." This proposed
legislation is intended to prevent abuses of electronic
monitoring in the workplace. The bill defines "electronic
monitoring" to include, among other things, "telephone service
observation," which in turn is defined to mean "the practice of
listening to or recording telephone calls being made by, or
received by, an employee in order to monitor the quality of
service provided by the employee."
As you may recall, similar legislation (H.R. 1218) was
introduced in Congress but did not pass last year. As reported
by the House Education and Labor Committee last July, H.R. 1218
contained an exemption for securities industry employers from
most of the bill's provisions. H.R. 1900 contains a similar, but
narrower exemption. Specifically, under section 13(c)(2)(B) of
H.R. 1900, securities industry employers would be exempt from all
provisions of the Act except sections 4(a), 4(b)(1), 4(b)(2),
4(b)(4), 7, 8 and 9. Those sections are summarized below.
Section 4(a) requires the posting of a notice from the
Department of Labor informing employees (1) that the employer
engages or may engage in electronic monitoring, (2) when
additional notice may be required, and (3) what rights and
protections are provided to employees under the Act. The other
subsections of section 4 listed above require an employer to
provide prior written notice to any employee who will be
electronically monitored, detailing the forms of electronic
monitoring to be used, the "personal data" (discussed further
below) to be collected and the use to be made of such personal
data.
Section 7 of the bill requires, generally, that employees
be provided a reasonable opportunity to review all "personal
data" obtained through electronic monitoring of those employees.
"Personal data" is defined as "any information concerning an
employee which, because of name, identifying number, mark, or
description, can be readily associated with a particular
individual, and such term includes information contained in
printouts, forms, or written analyses or evaluations."
Section 8 governs the use of data collected by electronic
monitoring and provides, among other things, that an employer
shall not use quantitative data on an employee which is obtained
by electronic monitoring and which records the amount of work
performed by the employee within a specific time period as the
sole basis for individual employee performance evaluation.
Section 9 covers privacy protections and prohibits, for
example, electronic monitoring in certain locations or electronic
monitoring of an employee when the employee is exercising First
Amendment rights.
Please review the attached bill (with particular attention
to the provisions noted above) to determine whether it presents
any significant problems for participants in the investment
company industry. If you have any comments or concerns, please
contact me at (202) 955-3514 (or by fax at 202/659-1519) by
Monday, May 17.
Frances M. Stadler
Assistant Counsel
Attachment