Last week, California Attorney General, Kamala D. Harris – who has been mentioned as a potential nominee to fill Justice Antonin Scalia’s recently vacated seat on the U.S. Supreme Court – issued the California Data Breach Report (Report).  The Report provides an analysis of the data breaches reported to the California AG from 2012-2015.

The Report details that nearly 50 million records of Californians have been breached and the majority of these breaches resulted from security failures.  In fact, the Report explains that nearly all of the exploited vulnerabilities, which enabled the breaches, were compromised more than a year after the solution to address the vulnerability was publicly available.  According to Ms. Harris, “It is clear that many organizations need to sharpen their security skills, trainings, practices, and procedures to properly protect consumers.”

Malware and hacking, physical breaches, and breaches caused by error have been the three most common types of breaches. Of the three, malware and hacking have been by far the largest source of data breaches, with 90% of all records breached by means of malware and hacking.  Physical breaches, resulting from the theft or loss of unencrypted data on electronic devices, were next most common, with heath care entities and small businesses most heavily impacted.  Breaches caused by error – such as mis-delivery of email and inadvertent exposure of information on the public Internet – ranked third.  Government entities made half of all such errors.

Under California law, “A business that owns, licenses, or maintains 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.”  This requirement is important as the Report specifically states an organization’s failure to implement all of the 20 controls set forth in the Center for Internet Security’s Critical Security Controls (The Controls) constitutes a lack of reasonable security.

The Report goes on to discuss numerous findings and provide an analysis of the breach types, data types, and industry sectors impacted.  The Report concludes with recommendations which include:

  1. Reasonable Security:  The Standard of Care for Personal Information.  Implementation of The Controls mentioned above as a minimum level of information security (available as at Appendix A to the Report).
  2. Multi-Factor Authentication.  Organizations should make multi-factor authentication available on consumer-facing online accounts that contain sensitive personal information. This stronger procedure would provide greater protection than just the username-and-password combination for personal accounts such as online shopping accounts, health care websites and patient portals, and web-based email accounts.
  3. Encryption of Data in Transit. Organizations should consistently use strong encryption to protect personal information on laptops and other portable devices, and should consider it for desktop computers.  This is a particular imperative for health care, which appears to be lagging behind other sectors in this regard.
  4. Fraud Alerts.  Organizations should encourage individuals affected by a breach of Social Security numbers or driver’s license numbers to place a fraud alert on their credit files and make this option very prominent in their breach notices. This measure is free, fast, and effective in preventing identity thieves from opening new credit accounts.
  5. Harmonizing State Breach Laws.  State policy makers should collaborate to harmonize state breach laws on some key dimensions. Such an effort could reduce the compliance burden for companies, while preserving innovation, maintaining consumer protections, and retaining jurisdictional expertise.

While the Report, and California’s existing law, are focused on protecting the personal information of California residents, it is important to remember California has continuously been at the forefront of data security legislation.  In fact, California was the first state to enact a data breach notification law in 2003, and since that time 46 other states have followed suit.  As such, it would not be surprising if other states consider the recommendations in the Report and implement similar requirements.

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Photo of Jason C. Gavejian Jason C. Gavejian

Jason C. Gavejian is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. and co-leader of the firm’s Privacy, Data and Cybersecurity practice group. Jason is also a Certified Information Privacy Professional (CIPP/US) with the International Association of Privacy…

Jason C. Gavejian is a principal in the Berkeley Heights, New Jersey, office of Jackson Lewis P.C. and co-leader of the firm’s Privacy, Data and Cybersecurity practice group. Jason is also a Certified Information Privacy Professional (CIPP/US) with the International Association of Privacy Professionals.

As a Certified Information Privacy Professional (CIPP/US), Jason focuses on the matrix of laws governing privacy, security, and management of data. Jason is co-editor of, and a regular contributor to, the firm’s Workplace Privacy, Data Management & Security Report blog.

Jason’s work in the area of privacy and data security includes counseling international, national, and regional companies on the vast array of privacy and security mandates, preventive measures, policies, procedures, and best practices. This includes, but is not limited to, the privacy and security requirements under state, federal, and international law (e.g., HIPAA/HITECH, GDPR, California Consumer Privacy Act (CCPA), FTC Act, ECPA, SCA, GLBA etc.). Jason helps companies in all industries to assess information risk and security as part of the development and implementation of comprehensive data security safeguards including written information security programs (WISP). Additionally, Jason assists companies in analyzing issues related to: electronic communications, social media, electronic signatures (ESIGN/UETA), monitoring and recording (GPS, video, audio, etc.), biometrics, and bring your own device (BYOD) and company owned personally enabled device (COPE) programs, including policies and procedures to address same. He regularly advises clients on compliance issues under the Telephone Consumer Protection Act (TCPA) and has represented clients in suits, including class actions, brought in various jurisdictions throughout the country under the TCPA.

Jason represents companies with respect to inquiries from the HHS/OCR, state attorneys general, and other agencies alleging wrongful disclosure of personal/protected information. He negotiates vendor agreements and other data privacy and security agreements, including business associate agreements. His work in the area of privacy and data security includes counseling and coaching clients through the process of investigating and responding to breaches of the personally identifiable information (PII) or protected health information (PHI) they maintain about consumers, customers, employees, patients, and others, while also assisting clients in implementing policies, practices, and procedures to prevent future data incidents.

Jason represents management exclusively in all aspects of employment litigation, including restrictive covenants, class-actions, harassment, retaliation, discrimination, and wage and hour claims in both federal and state courts. He regularly appears before administrative agencies, including the Equal Employment Opportunity Commission (EEOC), the Office for Civil Rights (OCR), the New Jersey Division of Civil Rights, and the New Jersey Department of Labor. Jason’s practice also focuses on advising/counseling employers regarding daily workplace issues.

Jason’s litigation experience, coupled with his privacy practice, provides him with a unique view of many workplace issues and the impact privacy, data security, and social media may play in actual or threatened lawsuits.

Jason regularly provides training to both executives and employees and regularly speaks on current privacy, data security, monitoring, recording, BYOD/COPE, biometrics (BIPA), social media, TCPA, and information management issues. His views on these topics have been discussed in multiple publications, including the Washington Post, Chicago Tribune, San Francisco Chronicle (SFGATE), National Law Review, Bloomberg BNA, Inc.com, @Law Magazine, Risk and Insurance Magazine, LXBN TV, Business Insurance Magazine, and HR.BLR.com.

Jason is the co-leader of Jackson Lewis’ Hispanic Attorney resource group, a group committed to increasing the firm’s visibility among Hispanic-American and other minority attorneys, as well as mentoring the firm’s attorneys to assist in their training and development. He also previously served on the National Leadership Committee of the Hispanic National Bar Association (HNBA) and regularly volunteers his time for pro bono matters.

Prior to joining Jackson Lewis, Jason served as a judicial law clerk for the Honorable Richard J. Donohue on the Superior Court of New Jersey, Bergen County.