The US House of Representatives has shot down proposals which would have prevented businesses from collecting Facebook log on credentials as part of their employee vetting procedures.
The law had been proposed by Colorado representative Daniel Perlmutter.
Perimutter suggested that the proposals would have given an important measure of privacy to end users.
"No American should have to provide their confidential personal passwords as a condition of employment," Perlmutter said.
"Both users of social media and those who correspond share the expectation of privacy in their personal communications."
The act had been offered by Perlmutter as an amendment to a proposed overhaul of the FCC Reform Act bill.
It was defeated by 236 votes to 184.
Access to Facebook accounts by employers has been a hotly debated topic in recent days as reports have surfaced of firms requiring users to hand over passwords for Facebook and other social networking platforms.
Facebook has maintained that such account access is a violation of its terms of service and encouraged users not to hand over their passwords.
Both Facebook and civil rights groups have expressed concern that accessing account details can also leave companies vulnerable to discrimination suits.
Earlier this week, a pair of US Senators urged their peers to limit employee account access.