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Originally posted to Mintz Levin’s Employment Matters Blog

These days most employers manage a vast amount of electronic information about their employees, including the employees’ personal identifying information. But, what obligations do employers have to unionized employees with respect to managing that information and bargaining with them in the event of a breach of their private information? Continue Reading More than Employees Bargained For: Do Union Employees Have a Right to Bargain Over Company Data Breaches?

In a recently-released Form 8-K filing announcing fourth quarter and year-end financial results, Target Corporation reported that expenses incurred in 2014 relating to its 2013 data breach totaled over $191 million.  Those expenses were offset by $46 million in insurance proceeds, resulting in a $145 million charge against Target’s 2014 operating results.  The expenses incurred in 2014 were in addition to $61 million in breach-related expenses incurred in 2013 which, after receipt of $44 million in insurance proceeds, yielded $17 million in net breach-related expenses for Target in 2013.  In all, Target has incurred $252 million in costs arising from the data breach through the end of 2014 which, after receipt of $90 million in insurance proceeds, has resulted in total net expenses to Target in 2013 and 2014 of about $162 million. Continue Reading Target Data Breach Price Tag: $252 Million and Counting

By now (unless you have been under a snow drift), you have likely heard about the apparent intrusion into a database at the nation’s largest health insurer, Anthem, Inc.  Rather than reiterate the facts as currently known (see Anthem’s dedicated website for updates), we’ll look at the fallout and what’s next. Continue Reading The Anthem Data Breach: The Fallout and What’s Next

As expected in his State of the Union address last night, President Obama made it very clear that cybersecurity is on his agenda for 2015.  After stating that:

 “No foreign nation, no hacker should be able to shut down our networks, steal our trade secrets or invade the privacy of American families, especially our kids,”

the President urged Congress to “finally” pass “legislation we need to better meet the evolving threat of cyber attacks, combat identity theft, and protect our children’s information” and cautioned law makers that “if we don’t act, we leave our nation and our economy vulnerable.”

Just days before the State of the Union address, in a speech delivered at the Federal Trade Commission on January 12, the President highlighted the measures he discussed in the State of the Union and unveiled the next steps in his comprehensive approach to better protect American companies, consumers, and infrastructure against cyber threats. These steps include:

  1. Improving consumer security by establishing a national standard for companies to notify employees and customers about security breaches and identifying and preventing identity theft. For more information about the proposed Personal Data Notification & Protection Act, please see our prior blog post. The President announced that in an effort to tackle identity theft and assist consumers in spotting identity theft early on, several large financial companies have committed to offer free credit scores to their customers, joining an existing list of financial companies that already engage in this practice.
  2. Improving consumer confidence online by passing a Consumer Privacy Bill of Rights to establish an enforceable code of conduct for online interactions and protect consumers’ privacy. This proposed legislation will be based on the Obama Administration’s 2012 Consumer Privacy Bill of Rights and is expected to be released within the next month and a half.
  3. Safeguarding student data in the classroom and beyond by passing legislation to promote student privacy, convening the private sector to pledge to help enhance the privacy of students, and offering  new tools via the Department of Education  to help schools and teachers better protect the privacy of students. Sometime in the next two months, the Obama administration will release a proposal to update the Family Educational Rights and Privacy Act (FERPA). The President highlighted that the proposed Student Digital Privacy Act would: (i) limit the use of data collected “in an educational context” to educational purposes; (ii) prohibit companies from selling student data to third parties for unrelated purposes; and (iii) prohibit targeted advertising derived from data collected in school, however, the bill would still permit the use of such data for certain types of research, as well as for improving the effectiveness of learning technology products. The President noted that the bill would be modeled on a recently passed California law covering the collection and use of student data. For more information on the California law, please see our prior blog post.
  4. According to a recent White House press release on the subject, as part of the Obama Administration’s comprehensive plan to better protect the privacy of consumers, on January 12, the Department of Energy and the Federal Smart Grid Task Force released a new Voluntary Code of Conduct (VCC) “for utilities and third parties providing consumer energy use services that will addresses privacy related to data enabled by smart grid technologies.” For more information about this initiative, please click here.

The next item on the law makers’ agenda is a hearing before the House Energy and Commerce subcommittee next Tuesday entitled “What are the Elements of Sound Data Breach Legislation?” According to new subcommittee Chairman Michael Burgess (R-TX), “data security will be the focus of our subcommittee’s first hearing as we drill down on what components should be included in a bill that will give consumers the peace of mind they deserve.”

We will keep you updated on proposed legislation and new initiatives that are part of the Administration’s cyber security plan.

If cybersecurity and data privacy are on the President’s agenda, shouldn’t those issues be on the top of your company’s agenda this year?!

 

Written by Cynthia Larose, CIPP and Ari Moskowitz, CIPP

This has been a big week for cybersecurity announcements from Washington.   In what the White House has called a series of “SOTU Spoilers,” President Obama announced his intention to follow through on some of the recommendations in his administration’s Big Data report — the culmination of the White House’s 90-day “Big Data” review in 2014.  Specifically, the President proposed following through on the report’s recommendations that the following legislation be passed:  a consumer privacy bill of rights, a national data breach notification law, and a law to promote student privacy. Continue Reading White House Proposes National Data Breach Notification Standard

Three privacy/security stories that you should know as you start your week:

 

President Obama to Offer Cybersecurity/Privacy Previews to State of the Union Proposals

In a series of speeches this week, President Obama will preview important issues to appear in his January 20th State of the Union address.    A White House official said in a statement to reporters over the weekend that the president would “lay out a series of legislative proposals and executive actions that will be in his State of the Union that will tackle identity theft and privacy issues, cybersecurity, and access to the Internet.”   The President will reportedly speak at an event at the Federal Trade Commission today and outline a plan to tackle identity theft and improve consumer and student privacy.    Tuesday, the President will discuss cybersecurity at the National Cybersecurity and Communications Integration Center.    We will keep readers updated on what the White House is calling “SOTU Spoilers.”

Read more here:Privacy and Security Updates Monday

CNBC

CNET

New York Times

 

ICYMI:  The January 2015 Edition of the Mintz Matrix Is Out — and State Changes are in the Works

On Friday, we released the updated version of the Mintz Matrix of state data breach notification laws.   In case you missed it, you can get the updated chart here.

Now that the state legislatures are getting into session, we are expecting more action amending and tightening up state laws.    For example, legislators in Washington state have already filed an amendment to that state’s data breach notification law.

At the end of 2014, several proposals were introduced and we will be following where these bills head in the  2015 session.     New York‘s proposal (Bill A10190) imposes requirements on entities conducting business in New York and which own/license computerized data that includes private information that are nearly identical to those required under Massachusetts 201 CMR 17.   Most importantly (as you will recall), the Massachusetts regulations require that entities develop, implement and maintain a comprehensive written information security program.     A proposed New Jersey amendment would expand the definition of “personal information” to include a combination of user name or email address with any password or security question and answer that would permit access to the online account.  Attorneys general in Indiana and Oregon closed out the year with calls for more robust data breach protection legislation in their states.    Stay tuned.

 

Tax Time is a Good Time For a “Security Check”

Businesses and their employees are all dealing with receipt of documents, filings, etc. during this taxing time of year.  Tax season is also a prime time for personal information scams and can expose lax internal controls.   Here are a few things to remember as you begin preparing for tax season:

Secure your data – Do you prepare your business’ taxes on a company computer? If so, you likely have some very sensitive financial information on your hard drive. Make sure your files are secured with password-protected directories and accounts, and that your entire system is protected from outside threats. Also, if you plan to use a wireless network to electronically file your taxes, be sure to use a secure Internet connection and never use public wireless hotspots.  Do NOT send personal information to employees or service providers via email.   Make sure that you only use secure transmission methods for sending W2 and other forms that contain Social Security or other sensitive information.   If a tax preparer asks you to send documents via unencrypted email — find another tax preparer.

Back up financial data – When was the last time you backed up your company data?  If you don’t already follow a backup schedule, tax season can be a great reminder that you need to regularly back up your data. Regularly backing up your data not only protects you at tax time in the event your data is compromised, it can also help protect you against future events such a natural disaster.  Remember that whether you back up to the cloud or a separate physical device/location, electronic data needs to be kept in a secure environment.

Keep your security software updated – You don’t have the time or resources to keep track of each and every new scam, phishing attack, or threat that comes around – that’s what your security software is supposed to do. But just as you can file your taxes without the most accurate tax information, your security software can’t do its job if it’s not up-to-date. The threat landscape changes daily, so keeping your security software up-to-date helps ensure that it will be able to address the most current threats to your information. After all, your ability to run an effective business depends on making sure your confidential data is safe and secure from outside threats.

Remind employees of phishing threats — Use this time of year as an opportunity to remind employees to protect themselves from tax-related phishing scams.    The IRS will never ask for personal information via email.  Ever.    Some of these reminders from the IRS may be useful to send to your employees as a reminder to protect themselves — and as a result, protect your business.

Have a safe and secure week!

Make sure to get your January 2015 Mintz Matrix!    

Available here for downloading and always linked through the blog right hand navigation bar.

Things you will not want to miss:

  • California has significantly amended its breach notification requirements
  • Kentucky’s new data breach law (2014) is expanded effective January 1
As always, this chart is for informational purposes only and does not constitute legal advice or opinions regarding any specific facts relating to specific data breach incidents. You should seek the advice of experienced legal counsel (e.g., the Mintz Levin privacy team) when reviewing options and obligations in responding to a particular data security breach.
Credit – Photobucket: bjaco6

The First Rule of How to Survive a HIPAA Audit:  Be Prepared

2015 is bringing along with it the start of the HHS Office for Civil Rights random audit program to assess compliance with the HIPAA privacy, security and breach notification rules.   It is anticipated that 300-400 business associates will be the subject of a desk audit and an undisclosed number of lucky business associates and covered entities will be chosen for intensive, on-site audits.  Remember, if your business provides services to a healthcare entity covered by HIPAA, you are likely a business associate.

So, here’s the question:  are you audit-ready?  

In a free webinar, Mintz Levin’s Dianne Bourque will walk you through how to prepare now in the event that you are one of the chosen.

Save the date:   Wednesday, January 28, 2015   1:00 PM ET/10:00 AM PT

Registration information will follow!

 

 

Questions of Authority – who will be the federal regulatory cop on the privacy beat?  FTC?   FCC?  Privacy, Data Security Jurisdiction Questions to the Forefront in 2015

Written by Christopher Harvie

As privacy and data security gain more visibility among policy-makers, questions of federal agency authority and jurisdiction are also gaining a higher profile.

Since 2002, the Federal Trade Commission (FTC) has brought 50 enforcement actions under Section 5 of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices,” against companies alleged to have put consumers’ personal data at unreasonable risk. Earlier this year, in response to a court challenge brought by Wyndham Hotels, a Federal court in New Jersey upheld the FTC’s authority under Section 5 to bring enforcement actions to remedy unreasonable data security practices that lead to data breaches that cause consumer harm.    The court ruled that Congress need not explicitly grant the FTC authority to bring Section 5 actions against companies that cause consumer harm through inadequate data security practices and that the FTC does not need to adopt prior data security regulations detailing permissible and impermissible data security practices.  Instead, the court determined that the FTC complaint against Wyndham adequately plead “substantial injury to consumers” caused by data breaches linked to Wyndham’s “failure to implement reasonable and appropriate security measures” – including the failure to require use of complex passwords, erect adequate firewalls to prevent access by 3rd parties and insecure devices to enterprise servers, utilize up-to-date operating systems that could receive security patches and upgrades, or adequately inventory its computers in order to readily locate compromised device.  Issued in response to a Wyndham motion to dismiss for lack of jurisdiction, the courts’ decision does not constitute a ruling on the merits of the FTC complaint.  The jurisdictional issue is the subject of an interlocutory appeal to the 3rd Circuit, which remains pending while the parties engage in court-ordered mediation. Read our posts here and here for more information on the Wyndham case. Continue Reading On the Seventh Day of Privacy, federal agencies gave to me…..

sing it with me now….

Five Golden Rules…….(well, five new privacy laws/requirements)

There are five significant new privacy laws/amendments that will be effective as of New Year’s Day — January 1, 2015 — and four are from California.    Pull up a chair, brew that cup of tea.  It’s time to review and prepare. Continue Reading On the Fifth Day of Privacy, California (and Delaware) gave to me