What Does the Criminal Conviction for Privacy Law Violations of Three Google Executives in Italy Mean for Multi-National Employers in the U.S.?

On February 24, 2010, a Milan court convicted Google’s Chief Legal Officer, Global Privacy Counsel, and a former member of Google Italy’s board of directors for violating Italian privacy law and imposed a six-month, suspended jail sentence. The case stemmed from a posting on Google Video® — a YouTube® predecessor — of a video depicting several teenagers bullying a classmate with Down’s Syndrome. Although the Google executives had no involvement in either the posting or in the decision whether and when to remove it, Italian law imposes criminal liability on senior executives for the actions of the corporation. Prosecutors alleged that Google should be held responsible not only for permitting the video to be posted in the first instance, but also for allegedly not having acted quickly enough to remove the video after receiving a complaint.

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Massachusetts Regulators Provide Significant Insight Into Enforcement of Stringent Information Security Regulations That Are Effective as of Today (March 1, 2010)

Touted as the most stringent information security regulations to date, Massachusetts’ requirements—applicable to both customer and employee personal information—mandate the implementation of a comprehensive written information security program. As explained in previous blog posts, the regulations require “cradle-to-grave” protections for the following categories of information about Massachusetts residents when combined with first name or initial and last name: Social Security number, driver’s license and other government-issued identification number, debit or credit card number, and financial account number. One critical question for organizations, particularly those grappling with tightened budges, is where to focus limited resources in light of the enforcement risk. Recent statements by Massachusetts regulators provide a view towards the answer.

In an interview published on February 27 in BNA’s Privacy and Security Law Report, the director of the agency that promulgated the regulations, Massachusetts’ Office of Consumer Affairs and Business Regulation (OCABR), made three statements that could have an important bearing on enforcement. First, OCABR takes the position that the regulations apply even when the personal information of Massachusetts employees is stored in a centralized human resources database located at a corporate headquarters outside of Massachusetts. Second, in the director’s view, employers have virtually no excuse for failing to encrypt personal information stored on laptops. Third, although current technology does not permit encryption of personal information stored on a hand-held device, such as a Blackberry® or a Smartphone®, employers should consider other steps that will limit the risk to Massachusetts personal information if the hand-held device is lost or stolen.

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New Background Check Mobile Web Application May Jeopardize FCRA Compliance Obligations

Many hands holding mobile phonesBeenVerified” is a new mobile Web application that allows users to conduct background checks on any individual by merely entering the name or email address of the individual. Users get three free background checks monthly and unlimited checks for a monthly fee of only $8. BeenVerified has been a smashing success, with more than one million checks run to date.

HR professionals, recruiters, managers, and co-workers may find BeenVerified hard to resist. According to the application, users can check an individual’s “Criminal History, Property Records, Current Contact Info, Relatives, Neighbors, and more,” merely by entering an individual’s name. By entering an email address, the user can find out about the individual’s social networking activities and view “their online photos, websites, blog posts, and entire online presence.” All of the data is compiled into a concise report.

Despite its ease of use and apparent low cost, the BeenVerified app may expose employers to liability under the federal Fair Credit Reporting Act (FCRA) and analogous state laws. These laws prohibit background checks for employment purposes without providing notice and obtaining the subject’s prior, written authorization. The FCRA permits recovery of compensatory damages, including statutory damages for willful violations, and a fee award.

Although BeenVerified states that information obtained “should not be used for employment, tenant screening, or any FCRA related purposes,” the potential for abuse exists. HR professionals, recruiters, managers, and co-workers now have the ability to review financial, criminal, and other personal information about subordinates, co-workers, and applicants without any safeguards to protect against violations of federal and state background check laws. As a result, employers should consider implementing a policy that prohibits employees from using the application to obtain information about any other employee unless the user has complied with the FCRA’s notice and authorization requirements.

This entry was written by Philip L. Gordon and Jennifer L. Mora.

Photo credit: HelleM 

Caveat Employer: Let the Employer Beware of Employee Endorsements on Social Media Websites

Employers already face concerns about how to handle employees trash-talking about them on blogs, Facebook and other social media. Now, employers must be cautious of the converse — employee endorsements of their employers’ products and services on social media websites. The Federal Trade Commission (FTC) recently issued updated guidelines aimed at protecting consumers from misleading endorsements and advertising. As these guidelines make clear, employers whose employees use social media like blogs or Facebook to comment on their employer’s products or services face potential liability, even where the employer has not authorized or ratified the employee’s remarks.

The FTC’s revised Guides Concerning the Use of Endorsements and Testimonials in Advertising, published in the Federal Register at 16 C.F.R. Part 255 (the “guidelines”), address the application of Section 5 of the FTC Act (the “Act”) – which prohibits unfair or deceptive acts or practices and unfair competition in or affecting commerce -- to the use of endorsements and testimonials in advertising.

In the guidelines, the FTC identifies the general principles it will apply when evaluating whether endorsements and testimonials, including those given by employees about their employers’ products and services, are deceptive. The guidelines provide specific examples, and suggest that employees endorsing their employer’s products or services have a duty to disclose to their audience their relationship to an employer at the time they give the endorsement or testimonial. To be an endorsement or testimonial subject to these guidelines, the posting must be a message “that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser. The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser...” 16 C.F.R. Part 255.01(b).

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Federal Courts' Disagreement Over E-Mail Privacy Highlights Employers' Need to Revisit E-Mail Policies

As the Supreme Court prepares to address the question whether public employees can expect privacy in text messages sent by government-issued phones through a service provider under contract with the government, federal district courts continue to reach conflicting results when addressing whether private employees waive the attorney-client privilege by communicating with a personal attorney using their employer’s electronic resources. With yet another federal court recently finding no waiver, employers should revisit and revise their electronic resources policies to increase their chances of winning the waiver battle.

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Firestorm Over Change in Facebook's Privacy Settings Has Important Implications for Employers

This past week, Facebook asked each of its 350 million users whether they wanted to change their privacy settings to new settings offered by Facebook. The request ignited a firestorm among privacy advocates who believed that the changes meant less privacy for users. At the same time, the request forced users to consider their old settings and whether to change them to the new ones. The Financial Times reported that, according to Facebook, before this week’s rollout of the new settings, only 15% to 20% of users had changed their default privacy settings, but in response to the inquiry about changing their privacy settings, 50% of users — approximately 175 million users — had made changes.

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Supreme Court Review of Quon May Provide Important Guidance for Private Employers

The U.S. Supreme Court agreed, today, to review the Ninth Circuit Court of Appeal’s decision in Quon v. Arch Wireless, a case with potentially important implications for private employers. As explained in prior posts, the appellate court held that the City of Ontario Police Department violated a SWAT officer’s reasonable expectation of privacy by reviewing the content of his sexually explicit text messages, even though: (1) the messages had been sent with a Department-issued pager through a service provider under contract with the Department, and (2) the Department’s formal policy informed all SWAT officers that the Department might review their text messages. In reaching that conclusion, the Ninth Circuit relied principally on a statement by the officer in charge of the text messaging program to the SWAT officer that the Department would not review his text messages if he voluntarily paid any overage charges resulting from excessive personal use.

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New Hampshire Security Incident Demonstrates Importance of Documenting Any Decision to Forego Security Breach Notification

The New Hampshire Attorney General and the federal Center for Medicare and Medicaid Services are investigating Wentworth-Douglass Hospital’s decision not to notify patients or the Attorney General of a security incident that occurred more than two years ago. The security incident, which lasted from May 2006 until July 2007, involved a former hospital employee who became disgruntled after being transferred from the pathology lab. The former employee gained unauthorized access to pathology reports on nearly 2,000 occasions and changed reports involving more than 1,100 patients. The hospital investigated the incident and determined that neither New Hampshire’s notice law nor HIPAA required notification.

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Defeating Liability For Employees' Off-Duty Internet Activity

Sometimes cases with disgusting facts provide good law for employers. A case recently decided by the Wisconsin Court of Appeals proved that point in reversing a $1.4 million judgment on claims for negligent training and supervision against a security company based on the off-duty Internet activities of one of its employees.

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GINA Becomes Effective November 21, 2009: Are You Ready?

Four centrifuge tubes of fifteen milliliter volume in a rack in a science laboratory

The Genetic Information Nondiscrimination Act (GINA) takes effect on November 21, 2009. How does GINA impact employers? GINA does the following: (a) prohibits employers from discriminating against an employee based upon genetic information, (b) places broad restrictions on an employer’s deliberate acquisition of genetic information, (c) mandates confidentiality for genetic information that employers lawfully collect; (d) strictly limits disclosure of such information, and (e) prohibits retaliation against employees who complain about genetic discrimination.

Some of the more obvious violations of this new law occur when an employer requires a worker to take a genetic test or fires the worker based on information about such a test. However, employers can run afoul of GINA in a number of other ways they may not anticipate because the Act broadly defines “genetic information” to include not only genetic test results but also any information about the manifestation of a disease or disorder in a family member, such family medical history. For example, employers should tell health care providers who conduct post-offer, pre-employment medical examinations not to disclose to the employer the results of any family medical history or other genetic information. This example highlights the attention employers must now pay to GINA, violations of which subject employers to the same remedies as violations of Title VII of the Civil Rights Act of 1964.

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