With breaches caused by payment card thieves and hackers dominating the news, it is easy for mid-sized and small companies to think that data breaches are unfortunate events that affect only large companies. Not only is this sentiment misguided, but in relative terms the information contained in exposed emails can cause far more damage to an organization than the loss of customer payment card data. In this case, as reported by CNET, the inadvertent error was caused by a staff member of Australia’s Department of Immigration whose email blunder disclosed to an unauthorized party the personal passport information (e.g., passport number, date of birth) of all of the G20 leaders, including President Obama.

Embarrassing no doubt, but it looks like potential harm was mitigated as the recipient (someone at the Local Organizing Committee of the Asian Cup international soccer tournament) confirmed the email was immediately deleted and not forwarded or copied to a backup system. For sure, the G20 leaders have teams of people able to track down and secure such a transmission. Most businesses will not have the same good fortune, nor the same resources to track and secure such an errant email.

Company email and other electronic communications systems can tell a very comprehensive story about an organization, the details of which even management may not be fully aware. There will, of course, be emails and attachments that contain sensitive personal information about employees, customers and other individuals. Consider, for example, the employee relations nightmare that could erupt if a spreadsheet containing names, SSNs and salary information of all company employees and executives is inadvertently sent company-wide. The same would be true for email communications containing details of a workplace affair or establishing evidence of systemic workplace discrimination.

However, companies also maintain critically important trade secret information, intellectual property and strategic business planning data that is communicated through email and other systems. Such data, if disclosed to or accessed by the wrong person(s), could severely hamper the company’s business. The same would be true if a similar error, albeit unintentional, resulted in the disclosure of important information belonging to the company’s clients.

It should go without saying that the autofill feature is not the only risk to confidential information in electronic communication systems. These systems could be hacked, synched and unencrypted devices could be lost, and rouge employees could remove vast amounts of files containing a wealth of damaging data. In either case, the potential harm could take many forms beyond the typical payment card breach. Indeed, customer payment card information could be included in email. However, in the case of a professional services firm, for example, sensitive client information included in the breach could result in the loss of key clients, the cost of which could be difficult to overcome, as would be the cost to regain that client’s trust. Emails included in the group could expose a sordid affair involving the company’s chief executive, damaging the company’s position in the community. The same incident also could result in the loss of key intellectual property that undermines the business’ competitive advantage. The list could go on.

No set of safeguards will reduce to zero the risk of these kinds of incidents. That does not mean efforts to reduce the risks should be ignored. Limiting data collected and transmitted in electronic communications systems, a closely followed record retention and destruction policy, reasonable monitoring of systems, and creating a culture of privacy and security are all steps a company can take to reduce this exposure. But, that is not all. Businesses also must plan for the inevitability that breaches involving the loss of confidential information of many different varieties can and will occur. Key members of management should be thinking through different scenarios, developing appropriate plans to respond, and practicing those plans.

Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP)…

Joseph J. Lazzarotti is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. He founded and currently co-leads the firm’s Privacy, Data and Cybersecurity practice group, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Joe also is a member of the firm’s Employee Benefits practice group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Joe counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Joe’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Joe speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Joe served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.