Workplace Privacy, Data Management & Security Report : Privacy Lawyers & Attorneys : Jackson Lewis Law Firm : Data Security, HIPAA & Confidentiality Issues

Today the White House issued a Cybersecurity Legislative Proposal. The proposed legislation focuses on protecting the American people, the nation’s critical infrastructure, and the federal government's computers and networks.  While legislation of this nature would simplify the breach reporting process for businesses, and overall streamline cybersecurity laws, a number of legislative attempts to do this have previously failed.  It is important to note that while this proposal sets forth some guidelines, the specific details of how each provision would be instituted are not yet clear

Our critical infrastructure – such as the electricity grid, financial sector, and transportation networks that sustain our way of life – have suffered repeated cyber intrusion, and cyber crime has increased dramatically over the law decade. The President has thus made cybersecurity an Administration priority. 

1.  To protect the American people, the proposed legislation calls for a national data breach reporting law which would simplify and standardize the existing patchwork of 47 state laws that contain these requirements. Additionally, the proposal calls for penalties for computer criminals and clarifies the penalties for computer crimes, synchronizes them with other crimes, and sets mandatory minimums for cyber intrusions into critical infrastructure.
2. To protect our nation’s critical infrastructure the proposal calls on legislative changes to fully protect this infrastructure. Specifically, proposal will enable the Department of Homeland Security (DHS) to quickly help a private-sector company, state, or local government when that organization asks for its help. It also clarifies the type of assistance that DHS can provide to the requesting organization.

Additionally, the proposal permits businesses, states, and local governments to share information about cyber threats or incidents with DHS. To fully address these entities’ concerns, it also provides them with immunity when sharing cybersecurity information with DHS. At the same time, the proposal mandates robust privacy oversight to ensure that the voluntarily shared information does not impinge on individual privacy and civil liberties.

Further, the proposal emphasizes transparency to help market forces ensure that critical-infrastructure operators are accountable for their cybersecurity.

Finally, the proposal requires DHS to work with industry to identify the core critical-infrastructure operators and to prioritize the most important cyber threats and vulnerabilities for those operators. Critical infrastructure operators would then take steps to address cyber threats, develop risk mitigation plans, and permit DHS to modify the processes which are implemented if they are insufficient. 

3.  To protect federal government computers and networks the legislative proposal includes: an update to the Federal Information Security Management Act (FISMA) as well as formalizing DHS’ current role in managing cybersecurity for the Federal Government’s civilian computers and networks, in order to provide departments and agencies with a shared source of expertise; giving DHS more flexibility in hiring highly-qualified cybersecurity professionals; the permanency of DHS’s authority to oversee intrusion prevention systems for all Federal Executive Branch civilian computers while codifying strong privacy and civil liberties protections, congressional reporting requirements, and an annual certification process; and preventions on states requiring companies to build their data centers in that state, as opposed to in the cloud, except where expressly authorized by federal law.

The Administration’s proposal also attempts to ensure the protection of individuals’ privacy and civil liberties through a framework designed expressly to address the challenges of cybersecurity. Some of these provisions include: requiring federal agencies (and likely federal contractors) to follow privacy and civil liberties procedures; limitations on monitoring, collecting, using, retaining, and sharing of information; requiring efforts to remove identifying information unrelated to cybersecurity threats; as well as immunity provisions for those business which comply with the proposal’s requirements.  

As the proposal concludes: 

Our Nation is at risk… [t]he Administration has responded to Congress’ call for input on the cybersecurity legislation that our Nation needs, and we look forward to engaging with Congress as they move forward on this issue.

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Two Senators who clearly did not let the potential government work stoppage affect them, formally introduced the Commercial Privacy Bill of Rights Act of 2011 on April 12.  In a bipartisan effort, Senators John Kerry (D-Mass.) and John McCain (R-Arizona) introduced the legislation which sets forth privacy rules governing businesses that collect, use, or share personal data.

Under the bill, the Federal Trade Commission is given rulemaking and enforcement power.  Additionally, the bill would require covered entities to implement comprehensive privacy by design programs and provide clear disclosures of their data-collection practices.  Further, the FTC would be given authority to approve nongovernmental organizations to oversee safe harbor programs for firms that complied with approved self-regulatory schemes.

While passage of national privacy legislation has proven difficult in the past, companies must remain aware of these legislative updates, especially when they are of a bi-partisan nature.

 

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In a uniquely timed second showing of enforcement authority, the Department of Health and Human Services (HHS) announced on February 24, 2011 a one million dollar settlement with a Massachusetts hospital that allegedly breached patient data.  This settlement announcement comes only days after HHS announced a 4.3 million dollar HIPAA Privacy Rule fine.  The Massachusetts hospital settlement resulted from a hospital employee who took home documents containing sensitive personal information on patients. The employee then lost those documents while commuting to work.  

While the settlement did not include an admission of liability, in addition to the monetary settlement, and submitting to HHS oversight, the hospital must also adopt more stringent privacy practices and retain an independent security and privacy monitor. The investigation of the incident found the hospital failed to implement reasonable and appropriate standards to protect the privacy of patient information removed from the facility.  Under the settlement, the hospital must present new privacy and data security administrative, physical, and technical safeguards policies and procedures for HHS approval. Specifically, these policies and procedures must address the physical removal and transportation of protected health information and encryption of portable storage devices.  Despite a general prohibition on employees physically removing protected health information from the hospital,  HHS permitted an exception when the information is removed by an employee to perform his or her job duties.  Additionally, the hospital must implement training for all employees.  

This settlement, when considered with the 4.3 million dollar fine, likely signals how HHS will approach future enforcement actions.  In light of this, covered entities must seriously examine their privacy and security obligations, including implementing appropriate policies and procedures regarding the safeguarding of information.

 

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On December 18, 2010 President Obama signed into law the Social Security Number Protection Act of 2010. The law has two key components. 

First, the law establishes that no Federal, State, or local agency may display the Social Security account number of any individuals or any derivative of such number, on any check issued for payment by said agency. 

Second, the law prohibits Federal, State, or local agencies from employing, or entering into a contract for the use or employment of, prisoners in any capacity that would allow such prisoners access to the Social Security account numbers of other individuals. 

As employers have been grappling with the recent uptick in state laws addressing safeguards for Social Security numbers, this new law tightens protections at the federal level.   Additionally, federal contractors may need to consider how this change impacts their other obligations under the Federal Information Security Management Act.

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