Employers have long been concerned about the privacy of their confidential data. Part of this concern, of course, relates to hackers who, for malicious or profit-driven motives, gain unlawful access to the employer’s system. This can lead to a host of problems, including liability for failing to take proper precautions to protect the data and loss of revenue as consumers – even temporarily – avoid additional purchases for fear of identity theft. The latest, attention-grabbing cyber-attack looted Sony Pictures. While thousands of people are enjoying a bit of schadenfreude seeing the private thoughts of movie executives splashed across social media sites, many employers are following Sony's legal troubles in the wake of the hack, including a class action lawsuit filed in federal court by current and former employees who allege the company failed to secure its computer network and protect the employees' confidential information, including home addresses, birth dates, Social Security numbers, and healthcare data.
But another breach that has received far less media coverage has offered a new twist on what rapidly is becoming an old game. In mid-September of this year, the United States Postal Service became aware of suspicious activity within, and ultimately a breach of, its information systems. While the Postal Service asserts it took immediate action to investigate and end the attack, it did not inform those employees or customers whose data was exposed in the attack of the breach until November 10, 2014. As part of its announcement on November 10, which the Postal Service explained was delayed because earlier revelation could have compromised remediation efforts, the Postal Service stated it would provide one year of free credit monitoring to all employees affected by the breach.
That same day, the American Postal Workers Union, AFL-CIO filed an Unfair Labor Practice Charge against the United States Postal Service for failing to provide the union with notice of the breach in advance of the announcement to permit the union to negotiate "over the impacts and effects of the data breach on employees." Additionally, the union asserted the Postal Service's provision of one year of free credit monitoring was a "unilateral change in wages, hours and working conditions . . . ."
Most employers are savvy enough to have data security on their radar screens, and it is not yet clear how the Postal Workers' ULP Charge will play out. But as these breaches continue to spread across industries and employers, additional concerns rise to the surface. Strategizing now can streamline what inevitably will be a headache-laden process should you face a data breach in the future.
- Who must you inform or consult with regarding the breach?
- If you have a unionized workforce, add the union(s) to the list. Keep in mind any remedial efforts may be found to be the subject of collective bargaining.
- When must you tell the union?
- Have you addressed remedial steps in negotiations with the union? Is the union aware that effectively addressing cyber attacks may require a period of investigation and remediation before any announcement is made to affected persons?
- The Sony breach appears to have included Protected Health Information. The Health Insurance Portability and Accountability Act (HIPAA) has specific notification requirements, including time lines for reporting breaches. See 45 C.F.R. §§ 164.400-414 for additional requirements in the wake of a PHI data breach.
- Do not forget to check relevant state law. Many states have express statutory provisions that specify required remediation steps when employee private data is compromised.
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