California two-party consent: recording business calls in California

This explains how California's statutes and one Supreme Court decision read, and how we handle it on our own line. It is not legal advice. If a recording could end up in a dispute, ask a California lawyer.

California is a two-party (all-party) consent state

Federal law lets one person on a call consent to recording it, and that person can be you. California does not. Its rule is in the Invasion of Privacy Act, a chapter of the Penal Code passed in 1967, and it asks for the consent of everyone on the line.

The phrase "two-party consent" is shorthand. The statute says all parties, so on a three-way call all three have to agree. For a business that means the caller, not only you and your staff, and it means before the recording starts, not once somebody remembers.

What Penal Code 632 covers

Section 632(a) makes it an offence for a person who, "intentionally and without the consent of all parties to a confidential communication, uses an electronic amplifying or recording device to eavesdrop upon or record the confidential communication", whether in person or "by means of a telegraph, telephone, or other device". The punishment is a fine of up to $2,500 per violation, up to a year in county jail, or both, rising to $10,000 on a repeat conviction.

The word doing the work is "confidential". Section 632(c) defines a confidential communication as one "carried on in circumstances as may reasonably indicate that any party to the communication desires it to be confined to the parties", and excludes one made "in any other circumstance in which the parties to the communication may reasonably expect that the communication may be overheard or recorded".

That definition is why the notice matters so much. A caller who has just been told the call is recorded can no longer reasonably expect that it is not. A caller who has been told nothing usually can.

Cell and cordless calls: section 632.7

A second section reaches further. Section 632.7(a) applies to anyone who, "without the consent of all of the parties to a communication, intercepts or receives and intentionally records" a call involving a cellular or cordless phone on either end, and it carries the same fines and jail term as section 632.

Notice what is missing: the word confidential. Section 632.7 does not ask whether the caller expected privacy; it asks whether a cell or cordless phone was on the call and whether everyone consented. On a business line in 2026 nearly every caller is on a cell phone, so treat this as the section that applies to you.

It also applies to whatever answers for you. An answering service, a call-tracking number, after-hours call answering or an AI receptionist that records or transcribes the call is recording it, and the notice has to come first on those calls too.

Calling Californians from another state

A business in Texas or Florida might assume its own state's one-party rule covers calls it makes and takes. The California Supreme Court answered that in 2006, in Kearney v. Salomon Smith Barney, Inc. (39 Cal.4th 95), a case about a brokerage whose Atlanta office recorded calls with its California clients without telling them, lawfully under Georgia law.

The court held that California law applied to those calls. In its words, letting out-of-state businesses "regularly and routinely record telephone conversations made to or from California clients or consumers without the clients' or consumers' knowledge or consent would significantly impair the privacy policy guaranteed by California law". It also said what the rule actually demands: applying California law "will require only that the business inform its clients or customers, at the outset of the call, of the company's policy of recording such calls".

The court declined to award damages for the brokerage's recordings made before the decision, because the law had been unclear until then. It has not been unclear since. If your business records calls and any of your callers are in California, the practical rule is the notice, on every call, because you cannot see where a caller is sitting.

What the notice should say

Short, first, and the same every time. The Kearney court's own summary of what avoids a violation is a business that informs the caller "at the outset of the call" that it records. A notice that plays after the assistant or the receptionist has started talking is a notice that came second.

"Thanks for calling [your business name]. This call is recorded and transcribed so we get your details right. If you'd rather not, hang up and text us at this number."

If an AI assistant answers, say that in the same breath; the reasons are on our page about telling callers they are talking to an AI. And keep the wording identical on every call, so you can say exactly what every caller heard.

Penalties and lawsuits

The criminal side is above: up to $2,500 per violation and up to a year in county jail under sections 632 and 632.7.

The civil side is what a business is more likely to meet. Section 637.2(a) lets "any person who has been injured by a violation of this chapter" sue "for the greater of the following amounts": $5,000 per violation, or three times the actual damages. Section 637.2(c) adds that the person suing does not have to have suffered or be threatened with actual damages, so the claim does not depend on proving a loss.

For a business that records every call the same way, "per violation" means every call made that way, which is the arithmetic behind the class actions this statute is known for. Florida's statute works in a similar way, and our page on the Florida call recording law is the other worked example.

AI receptionists and transcripts

An AI receptionist has to hear the call to answer it, and most keep a transcript so you can check what was said and promised. Under section 632.7 that is recording, and it needs everyone's consent first. Under section 632 the transcript is the contents of a confidential communication in text.

Our broader answer on whether it is legal to record calls with an AI receptionist treats "which state is the caller in" as a trap, and Kearney is the reason. So on every call, including our own line, a recorded notice plays before the assistant can say anything: the call is recorded and transcribed, and the caller is speaking with an AI assistant. It is identical on every call, a custom greeting cannot replace it, and we keep the transcript, not the audio. The details are on our trust page and the terms that bind us to it are the AI terms.

If you are weighing an AI receptionist for your business, ask any provider the two questions Kearney makes obvious: does the notice play at the outset of every call, and can anyone switch it off? If the answer to the second is yes, the exposure under section 637.2 is yours.