Cross-posted from Employment Law Lookout.

Seyfarth Synopsis:  A string of recent class action lawsuits regarding businesses’ use of employees’ biometric data should put employers on heightened alert regarding compliance with various state biometric privacy laws.

As biometric technology has become more advanced and affordable, more employers have begun implementing procedures and systems that rely on employees’ biometric data. “Biometrics” are measurements of individual biological patterns or characteristics such as fingerprints, voiceprints, and eye scans that can be used to quickly and easily identify employees.  However, unlike social security numbers or other personal identifiers, biometrics are biologically unique and, generally speaking, immutable.  Thus, unlike a bank account or a social security number, which can be changed if it is stolen, biometric data, when compromised, cannot be changed or replaced, leaving an affected individual without recourse and at a heightened risk for identity theft.  Given the serious repercussions of compromised biometric data, a number of states have proposed or passed laws regulating the collection and storage of biometric data.  And plaintiffs’ attorneys are taking notice, as the number of class action lawsuits in this area has surged in recent months.

Currently, there are three states that have statutes regulating the collection and storage of biometric data: Illinois, Texas, and Washington.  In 2008, Illinois passed the Biometric Information Privacy Act (“BIPA”).  Texas followed suit in 2009, and Washington passed its biometric privacy law in 2017. Continue Reading Hazards Ahead: Uptick in Biometric Privacy Laws Can Put Employers in Hot Seat

Cross-posted from Carpe Datum Law

On May 25, 2018, the EU General Data Protection Regulation (“GDPR”) will impose significant new obligations on all U.S. companies that handle personal data of any EU individual. U.S. companies can be fined up to €20 million or 4% of their global annual revenue for the most egregious violations. What does the future passage of GDPR mean for your business?

Our experienced eDiscovery and Information Governance (eDIG) and Global Privacy and Security (GPS) practitioners will present a series of four 1-hour webinars in August through October of 2017. The presenters will provide a high-level discussion on risk assessment tools and remediation strategies to help prepare and reduce the cost of EU GDPR compliance. Continue Reading Is your organization ready for the new EU General Data Protection Regulation?

The General Data Protection Regulation is coming, and along with it, a significant expectation of increased harmonization in the privacy rules across the EU. Considering the 60-plus articles which directly impose obligations on controllers and processors, this isn’t an unreasonable sentiment. However (as is often the case with the EU), reality is a bit more complicated than what the expectations reflect.

The reason for the retained level of complexity even under the GDPR are what are known as “opening clauses”. These clauses permit a Member State to modify the provisions of the Article in which the clause resides. In effect, the opening clauses permit the Member State to introduce a more restrictive application of the GDPR obligation via local legislation.

These opening clauses are particularly important to note as there are a number of them (around 30% of the directly applicable Articles have opening clauses), and many of them address an already complicated area of data protection law – employment. While there are a number of companies who have a large consumer impact in the EU, there are just as many (if not more) who have workers in the EU, or have clients who have workers in the EU. As a consequence, the implementation of the GDPR doesn’t fully mitigate the patchwork quilt of local law when it comes to labor & employment law. This is both because of the opening clauses in a number of related Articles, as well as the plain text of Article 88.

The lack of consistency in HR-related data protection is particularly concerning with the advances in workforce management, monitoring, and the use of personal devices in the workplace (e.g. Bring Your Own Device, or “BYOD” environments). One of the ways that the regulators have attempted to address this very real issue around inconsistent GDPR obligations is with an update to the 2001 Article 29 Working Party opinion on data protection of employees. The new opinion, published on 23 June 2017, provides an update to the recommendations which were put in place prior to the age of social media and pervasive computing (i.e. Internet of Things).

While not mandatory, the Opinion does operate somewhat as a roadmap to the way regulators in the EU will consider enforcement – both in breach situations, as well as in accountability situations (i.e. when an entity has to “show” how they are compliant). The Opinion is also instructive as much of the analysis revolves around the concept of “proportionality”.

This balancing of the legitimate interests between employees and employers was not a commonly used method of legitimizing processing under Directive 95/46/EC and its local implementing legislation. However, it seems that this is the direction the Working Party is taking.  This may be seen as both a good and bad situation. On one hand, it indicates that the regulators are starting to understand the complexity of the modern workplace, and how rigid bright-line rules won’t really work. On the other hand, it would seem to require a significant amount of analysis by data protection experts (which is subsequently documented) showing the balance of interests doesn’t harm the employee.

In any event, at least in the realm of employment law, the GDPR isn’t going to be quite the panacea that many of us were hoping for. It is still going to be a complex, difficult to manage, area of law for the foreseeable future.

shutterstock_172034426Cross-posted from Carpe Datum Law.

Beginning on April 12, 2017, U.S. organizations that are subject to the investigatory and enforcement powers of the FTC or the Department of Transportation will be able to self-certify to the newly adopted Swiss–U.S. Privacy Shield Framework (“Swiss Privacy Shield”). The Swiss Privacy Shield will allow transfers of Swiss personal data to the United States in compliance with Swiss data protection requirements. The Swiss Privacy Shield will replace the U.S.–Swiss Safe Harbor Framework and will impose similar data protection requirements established last summer for cross-border transfers of personal data from the EU under the EU–U.S. Privacy Shield (“Privacy Shield”).

With the adoption of the Swiss Privacy Shield, transfers of personal data from Switzerland under the Swiss Safe Harbor Framework will no longer be permitted. Organizations currently registered with the Swiss Safe Harbor would need to certify under the Swiss Privacy Shield or implement alternative methods for complying with Swiss data transfer restrictions, such as Standard Contractual Clauses and Binding Corporate Rules. To join the Swiss Safe Harbor, organizations would need to ensure that their privacy policies, notices, statements, and procedures are in compliance with the new framework. The Department of Commerce provides sample language that can be used in an organization’s privacy policy to signify its participation in the Swiss Privacy Shield.

Organizations with active Privacy Shield certifications will be able to add the Swiss Privacy Shield registration to their existing Privacy Shield accounts, at a separate annual fee. Similarly to the Privacy Shield, the fee for participation in the Swiss Privacy Shield will be tiered based on the organization’s annual revenue. The exact fee structure will be made available sometime before April 12.

Notably, organizations with dual registrations, would need to recertify under both the Privacy Shield and the Swiss Privacy Shield one year from the date the first of their two certifications was finalized. That means, for instance, that an organization that registered for the Privacy Shield on September 1, 2016, which then registers for the Swiss Privacy Shield on May 1, 2017, would need to complete its annual recertification under both frameworks by September 1, 2017.

While the requirements of the two frameworks are nearly identical, there are a few differences: Continue Reading The Swiss Privacy Shield Opens for Business on April 12

Cross Posted from California Peculiarities Employment Law Blog

Hernandez v. Sprouts Farmers Market, Inc., a case stemming from a phishing scam, emphasizes the need for California employers to implement comprehensive data protection and data breach notification policies and practices for personal employee information under the CDPA.

A story of a company suffering a data breach tops newspaper headlines almost daily. So how can you stay out of the “fuego,” and stay compliant with California laws about your employees’ and customers’ data?

California’s Data Protection Act—“Army Of One”

In 2003 California passed the nation’s first data breach notification statute: the CDPA. Since then, over 30 states have enacted similar statutes, but California remains the national leader in privacy and data security standards.

The CDPA mandates that any business that “owns or licenses personal information about a California resident shall implement and maintain reasonable security procedures and practices appropriate to the nature of the information, to protect the personal information from unauthorized access, destruction, use, modification, or disclosure.” And it requires a company to notify affected individuals of a data breach “in the most expedient time possible and without unreasonable delay.” Continue Reading Phishing: Data Breach Is “Chalkdust Torture”

The clock is now ticking. On May 4th the European Parliament published the final text of the General Data Protection Regulation (“GDPR”), and the rules of the game have significantly changed – at least in the context of EU data protection law. First, the GDPR changes the underlying approach to data protection law, with a new emphasis placed on accountability and risk-based approaches. “Privacy by Design” and “Privacy by Default” have been included in the regulatory ecosystem. Second, significant changes have been made to the obligations of “controllers” and “processors”. These include specific criteria for having compliant privacy notices and vendor management contracts. Third, enforcement is now a very real, and potentially risky, thing. With the possibility of administrative fines being up to 4% of a business’ global gross revenue, private rights of action by individuals, and non-profit privacy watchdog groups (also known as “Civil Society”) having the right to complain of a company’s privacy practices directly to the local Data Protection Authorities; compliance with the GDPR will now be one of those risks that any business who touches EU data will need to seriously consider. Fortunately, the GDPR won’t go into effect until May 25th 2018. However, businesses with significant data from the EU need to start considering how to comply now. Continue Reading Europe Is Shifting, And It’s a Big Deal – The New GDPR

It is the beginning of 2016, and American companies are anxiously awaiting news of whether or not a new “Safe Harbor 2.0” will emerge. In October of 2015, the European Court of Justice declared invalid Safe Harbor 1.0 in the Schrems decision. This had an immediate effect on any American company collecting personal data from the EU by removing the legal basis for this kind of data transfer. As of October 2015, consumer, client, and even employee data cannot be legally transferred to the US under the Safe Harbor Framework.

Fortunately, the data protection regulators (“DPAs”)recognized the turmoil this decision created within the business community on both sides of the Atlantic. As a result, the Article 29 Working Party (which is the convention of DPAs from each of the EU Member States) issued an enforcement moratorium on enforcement actions until the end of January 2016, so that they could assess the effectiveness of data transfer tools available. As part of this moratorium, the Working Party called on “…Member States and European institutions to open discussions with U.S. authorities in order to find legal and technical solutions”; and that the “current negotiations around a new Safe Harbor could be part of the solution.” Continue Reading Safe Harbor 2.0 – Is It Happening?

Last week, the government of Australia released an “Exposure Draft” of a bill that, if passed into law, would amend Australia’s Privacy Act to require notification to the government and affected individuals in the event of a data breach. Currently, although Australian law requires government agencies and businesses subject to the Privacy Act to take reasonable steps to protect personal information, it does not mandate notification following a data breach.  The proposed Australian law requires notification only in the event of a “serious data breach,” which is defined as unauthorized access to, or disclosure/loss of, personal and certain other information that results in a “real risk of serious harm” to any of the individuals to whom the information relates.  Continue Reading Australia’s Proposed Data Breach Notification Law: What’s The Harm In A “Real Risk of Serious Harm” Standard?

The annual conference of the world’s data protection regulators is a three day exercise, with half of the conference being “closed door” for the regulators only, and the other half being a series of side meetings and presentations, which report out to interested attendees the results of the closed door meetings. This is a good meeting to gain insight in the next year’s trends in data protection regulation and enforcement across the globe. While this conference happens every year, the events in the European Court of Justice and the impending completion of the new General Data Protection Regulation (“GDPR”) made this year’s conference particularly interesting. Here are some of the insights which were developed during the conference: Continue Reading The 37th International Conference of Data Protection & Privacy Commissioners – Some Observations

Today the European Court of Justice (“ECJ”) issued its Judgment in the Schrems case, and in doing so, added another tremor to the ongoing seismic shift related to cross-border privacy law. The two major elements of today’s Judgment are: 1) that Commission Decision 2000/520/EC  of 26 July 2000 of the adequacy of the protection provided by the US Safe Harbor Framework (the “Safe Harbor Decision”) is invalid, and 2) even if the Safe Harbor Decision were otherwise valid, no decision of the Commission can reduce the authority of a national data protection authority to enforce data protection rights as granted by Article 28 of Directive 95/46/EC (the “DP Directive”).

Clearly, the first element brings a more immediate concern for all the companies participating in the Safe Harbor framework. However, the second element will have much longer term consequences for the stability of US-EU commerce and privacy law. Continue Reading Safe Harbor – Not so Safe After Schrems