Workplace Privacy Counsel : San Francisco Employment Privacy Law Lawyer & Attorney : Littler Mendelson Law Firm : Employment Related Privacy Issues

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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In what appears to be an on-going effort to find the right balance between information security and burdens on businesses, Massachusetts’ Office of Consumer Affairs and Business Regulation (OCABR) has materially revised—for a second time—regulations that were initially promulgated in October 2008, and has extended the compliance deadline for a third time. We have discussed the regulations in detail in prior blog posts. Consequently, we will only focus on the most recent revisions, which are described below:

• New Compliance Deadline: The compliance deadline has been extended from January 1, 2010, until March 1, 2010.

• Third-Party Service Providers: While the regulations still require that employers expressly address information security in their contracts with vendors who create or receive personal information on the employer’s behalf, employers now have until March 1, 2012, to negotiate amendments to vendor agreements entered into before the March 1, 2010 compliance deadline. Vendor agreement entered after that date must require that vendors implement and maintain “appropriate security measures to protect [Massachusetts] personal information” in a manner that is consistent with the regulations and applicable federal law.

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 On July 23, 2009, Littler Mendelson hosted a webinar, entitled “Meeting the Compliance Challenges of a Reinvigorated HIPAA and the Genetic Information Non-Discrimination Act of 2009.” Participants asked several questions to which we could not respond because of time. Below are the questions and the answers:

Q: Could you give a real life example of how an employer might experience an internal HIPAA violation?

A: We explained during the webinar that not all employee health information is protected by HIPAA. In fact, the universe of employee health information which HIPAA protects is relatively small. Protected health information (PHI) is limited to individually identifiable health information created or received by, or on behalf of, a group health, dental, or vision plan; health care reimbursement flexible spending account; employee assistance program; long-term care plan; or pharmacy benefits plan. HIPAA would be violated when, for example, a benefits administrator notices that an employee has submitted claims to an employer’s health plan for services related to an abortion, AIDS, or cancer and gossips with the employee’s manager about the employee’s condition. 

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On Thursday, February 12, 2009, Massachusetts’ Office of Consumer Affairs and Business Regulation (OCABR) publicly disclosed key changes to the controversial Massachusetts data security breach regulations, 201 CMR 17.00. Taking into account testimony heard from business associations and employers at a public hearing last month, OCABR has further delayed the implementation deadline and somewhat loosened employers’ obligations with respect to third-party service providers and mandatory encryption requirements.

Highlights of the amendments to the regulations are:

Effective Date: Previously set to go into effect on May 1, 2009, the compliance date has been delayed until January 1, 2010.

Third-Party Service Providers: The original regulations required all employers to obtain: (a) by May 1, 2009, contractual assurances from their third-party vendors having access to Massachusetts residents’ personal information that the vendors are capable of safeguarding this information; and (b) by January 1, 2010, written certifications from each vendor that it has adopted a comprehensive information security program in compliance with Massachusetts regulations (201 CMR 17.00 et seq.).
 

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Today — January 28, 2009 — is National Data Privacy Day, which, according to a January 2009 Resolution of the House of Representatives, “constitutes an international collaboration and a nationwide and statewide effort to raise awareness about data privacy and the protection of personal information on the Internet.” This reference to “international collaboration” is not precatory. Canada and the 27 Member States of the European Union also are seeking to focus attention on data privacy today by celebrating their own National Data Privacy Day. In light of two recent events that preceded National Data Privacy Day by only one week, HR departments should take note.

On January 22, 2009, Barack Obama’s first full day as President, he outlined, on the Whitehouse.gov website, his plan to enhance the nation’s cybersecurity. Two central planks of that plan will have a direct impact on employers. First, the plan calls on private industry to “secure personal data stored . . . on private systems” and to institute a “common standard for securing such data.” Second, the plan would create national standards for corporate security breach notification. Put simply, federal data protection and security breach notification legislation is on the way; it is just a matter of time. Such legislation most likely would have the beneficial effect of relieving multi-state employers from the burdens of complying with a patchwork of state data protection and security breach notification laws. Federal legislation, however, also would bring the substantial resources and enforcement power of the federal government to an area of the law that has, to date, seen only fledgling enforcement by the states.
 

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New Massachusetts regulations, effective January 1, 2009, are a clarion call for corporate human resources departments to join the war on identity theft. The regulations mandate the development and implementation of a "written, comprehensive information security program" to safeguard the information of Massachusetts employees and consumers. Such a program rarely will be fully effective without the involvement of human resources professionals and in-house employment counsel.

While these regulations apply only to organizations with Massachusetts employees, even employers without a Massachusetts presence should consider implementing a similar program. These regulations likely will be a model for other jurisdictions and could become the standard against which all information security programs are measured. Continue reading. . .

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With the State of Connecticut reeling from a series of massive security breaches that have exposed the personal information of hundreds of thousands of state residents, Connecticut's Governor and General Assembly joined forces in mid-June to make Connecticut only the second state (after Michigan) to mandate that private employers publish a policy on the protection of employee Social Security numbers (SSNs). The new Connecticut law — entitled, "An Act Concerning the Confidentiality of Social Security Numbers" (the "Act"), and effective October 1, 2008 — also imposes on private employers a statutory duty to safeguard, and properly dispose of, personal information more broadly defined. Continue reading. . .

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On August 3, 2007, Governor Deval Patrick enrolled Massachusetts as the 39^th member in the soon-to-be nationwide club of states with laws requiring notice of a security breach.  While these laws vary — sometimes materially — from one another, they share a common thread: at a minimum, they require employers to notify employees (and customers) when an unauthorized person acquires unencrypted, computerized “personal information,” creating a risk of identity theft.  In all 39 states that have adopted this law, “personal information” includes (again at a minimum) the affected individual’s first name or initial and last name plus social security number, driver’s license number, or credit card, debit card, or financial account number in combination with any required security code. 

Here are five key points for employers to consider as they confront these statutes.

•  Be Prepared.  Responding to a security incident can create a pressure cooker, especially when the personal information of senior corporate executives is among the compromised data.  Identify the members of your incident response team — typically from HR, IT, Legal, and Public Relations — and do a dry run of how your organization would respond if, for example, a payroll database had been stored on a stolen laptop.
• Train  HR Professionals.  In the employment context, a security breach can take many forms — a misdirected e-mail, a CD lost by a courier service, a stolen BlackBerry, or a successful hack are just a few examples.  HR employees and others who work with personal information should  be trained that these types of occurrences, which in the past might not have been taken seriously, now pose compliance risks.  The training should help employees identify a possible security breach, list the type of information which should be reported, and explain to whom the report should be made.
• Determine Your Notice Obligations.  When a breach does occur, consult knowledgeable counsel (whether in-house or outside) to determine the organization’s obligations under all potentially applicable notice laws.  To do so, counsel will need to know all the facts related to the incident, the states of residence of affected employees, and the number of affected employees in each state.  In some circumstances, a security breach may not trigger a legal obligation to notify  — for example, the theft of a hard copy (as opposed to computerized) payroll spreadsheet -- but the employer still may decide to provide notice as an employee relations matter.
• Help Your Employees.  Employees may view themselves as innocent victims when their employer suffers a security breach and  expect their employer to protect them and foot the bill. Providing free access to a credit monitoring service is the most commonly offered form of assistance.  Employers may want to consider a new service offered by MyIDentityIQ, Inc. and National ID Recovery: 1-877-252-9891.  This service not only alerts employees to possible misuse of their personal information (like credit monitoring), it also provides fully managed identity theft recovery services for employees after their personal information has been misused.
• Learn From Your Mistakes.  After the storm subsides, figure out what went wrong, what you did right, and how you can adjust your security incident response plan (or put one in place) to improve your response the next time around.

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More and more businesses — especially those in highly regulated industries such as banking, telecommunications, and health care — are engaging in “vendor management” as they implement increasingly rigorous information security programs.  Confirming the trustworthiness of vendors’ employees who are permitted on premises or who are authorized access to sensitive information is a cornerstone of such programs.  Consequently, these businesses are starting to make a variety of demands in contract negotiations and requests for proposals (RFPs) for background checks and drug-testing of vendor employees.

The demands vary based upon the industry and the company.  At a minimum, these businesses require their vendors to certify that employees who will be working on the customer’s account have successfully completed a background check and a drug screen.  At the other end of the spectrum, businesses specify the contents of background and drug screens and demand the right to audit the results or even conduct their own background checks and drug tests of the vendor’s employees.

These demands put vendors “between a rock and a hard place.”  On the one hand, vendors want to maintain strong relationships with valued customers and win contracts with new customers.  On the other hand, turning over background checks and drug test results to a customer can raise red flags with the vendor’s workforce regarding their privacy.  And, if not properly handled, the issue can mushroom into an employee relations nightmare and expose the vendor to privacy-based claims.  The problem is particularly acute for vendors who have not previously required current employees, or even job applicants, to submit to background checks or drug tests.

Here are three of the steps vendors might consider to avoid this catch 22:

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