California AB 984: Digital License Plates, GPS Tracking, and Employee Privacy

By: Jerel Pacis Agatep and Jiwon “Jamie” Kim

In December 2015, pursuant to SB 806, California’s Department of Motor Vehicles (DMV) started a pilot program to evaluate the use of alternatives to vehicle stickers, tabs, license plates, and registration cards under specific conditions. The program evaluated the use of electronic registration cards, license plate wraps, and digital license plates. On Jan. 1, 2023, subject to the DMV’s approval, these “alternative devices” will be available to the rest of California, with Governor Gavin Newsom signing the Motor Vehicle Digital Number Plates bill (AB 984) into law. California will join Arizona, Michigan, and Texas as a state that makes it legal to use one of these alternative devices – specifically, digital license plates as an alternative to the traditional metal ones.

AB 984 acknowledges the growing concerns about an individual’s privacy when it states “[A]n alternate device shall not include vehicle location technology … and [the department shall] recall any devices with vehicle location technology [GPS] that have been issued pursuant to [the pilot program].” However, as with any law, there is an exemption granted to vehicles registered as fleet vehicles, commercial vehicles and those operating under an occupational license to be equipped with GPS.

GPS Technology and Employee Privacy

While supporters of AB 984’s passage have extolled the bill as innovative, AB 984 also creates privacy complications as they relate to employee data. Specifically, AB 984 allows employers to “monitor” employees – which “includes, but is not limited to, locating, tracking, watching, listening to[] or otherwise surveilling the employee” during work hours through the digital license plate, so long as it is “strictly necessary for the performance of the employee’s duties.” Note that under existing California law, CA Penal Code § 637.7 prohibits the “use of an electronic tracking device to determine the location or movement of a person,” but it exempts vehicle owners that have consented to the use of GPS. Therefore, company-owned vehicles could presumably be tracked without the employee’s consent as long as the owner of the vehicle (the employer-company) consents.

Although AB 984 makes it clear that employers can now choose to equip their company vehicles with digital plates (or other soon-to-be-approved location-tracking alternative devices) and monitor their employees, an employer’s consent will not suffice anymore. Pursuant to AB 984, employers must now first provide the employee with a notice that requires, at minimum:

• A description of the specific activities that will be monitored.
• A description of the worker data that will be collected as a part of the monitoring.
• A notification of whether the data gathered through monitoring will be used to make or inform any employment-related decisions, including, but not limited to, disciplinary and termination decisions, and, if so, how, including any associated benchmarks.
• A description of the vendors or other third parties, if any, to which information collected through monitoring will be disclosed or transferred. The description shall include the name of the vendor or third party and the purpose for the data transfer.
• A description of the organizational positions that are authorized to access the data gathered through the alternative device.
• A description of the dates, times, and frequency that the monitoring will occur.
• A description of where the data will be stored and the length of time it will be retained.
• A notification of the employee’s right to disable monitoring, including vehicle location technology, outside of work hours.

Additionally, the digital plates (or other alternative devices) shall display a visual indication that GPS is in active use. Lastly, and most importantly, employers are prohibited from retaliating against employees for removing or disabling the monitoring devices outside of work hours.

Fines and Damages

The Labor Commissioner has authority to subject violators to a civil penalty of $250 per employee for initial violations; this penalty increases to $1,000 per employee for each subsequent violation for each day monitoring occurs without proper notice. And an employee retaliated against will be entitled to all available penalties, remedies, and compensation, including but not limited to reinstatement and reimbursement of lost wages, work benefits or other compensation caused by the retaliation.

Practical Implications

Employers should weigh the benefits of digital license plates with the potential risks – such as civil penalties, retaliation lawsuits or the risk of the labor commissioner disagreeing with an employer’s “strictly necessary” determination – associated with the collection of sensitive employee data. Special attention should be given to the fact that civil penalties are per employee and increase after the first violation per employee, per day. The effects of these accrued civil penalties were seen in Richard Rogers v. BNSF Railway Co., where a federal jury in Chicago found that the defendant-employer had committed 45,600 violations of the Illinois Biometric Privacy Act (BIPA) when it collected biometric data from employees without proper notice. This resulted in a $228 million verdict in favor of the plaintiff-employees. This verdict is used purely as an example of how quickly civil penalties can stack up; it is not precedent in California, and penalties provided for under BIPA are higher than in AB 984 ($5,000 per “reckless or intentional” violation and $1,000 for every “negligent” violation).

To the extent that employee handbooks and employee privacy notices are already being updated in light of the California Consumer Privacy Act’s exemptions for employment data expiring on Jan. 1, 2023, employers that still wish to use approved alternative devices (e.g., digital license plates) for employee monitoring should consider adding the required notice under AB 984 to the list of updates.