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California Legislature Extends CCPA Exemptions

on Friday, 25 September 2020 in Technology & Intellectual Property Update: Arianna C. Goldstein, Editor

Last month, the California Legislature passed AB-1281, a bill that amends the California Consumer Privacy Act (“CCPA”) to extend two important CCPA exemptions beyond their current January 1, 2021 expiration date – employment-related information and personal information collected in the context of business-to-business (“B2B”) transactions. 

The employment-related exemption applies to (1) personal information that is collected from a person by a business as a job applicant, employee, or contractor of that business; (2) emergency contact information for that person; and (3) personal information necessary to administer benefits for that person.  This exemption applies to all of the provisions of the CCPA, except for the requirement to provide a notice at collection.

Under the B2B exemption, certain personal information that is derived from written communications or transactions between a business and an individual who is acting on behalf of a third-party is exempted from the CCPA’s obligations, provided the communications or transactions solely relate to conducting due diligence, or providing or receiving a product or service to, or from, the third party.  However, businesses must still provide such individuals with notice of the right to opt-out of the “sale” of their personal information, if applicable. 

Notably, the bill will become inoperative if California voters approve the California Privacy Rights Act (“CPRA”) ballot measure on November 3, 2020.  The CPRA would extend the employment-related information and B2B exemptions for two years to allow lawmakers more time to negotiate a long term solution.  Given that the CPRA is expected to pass with overwhelming support (a recent poll shows over 80% of likely voters support the measure), the impact of AB1281 may be short lived.  Still, businesses that rely on the exemptions can take comfort in knowing that the exemptions will remain in place through at least January 1, 2022.

As of the publication of this newsletter, Governor Newsom has not yet signed AB-1281, but has given indications that he intends to do so.  Our team will continue to track the progress of AB-1281 and the CPRA and keep you apprised of developments in future editions of our newsletter.

Grayson J. Derrick
Chair, Technology and Intellectual Property Section

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