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For businesses subject to the California Consumer Privacy Act (CCPA), a compliance step often overlooked is the requirement to annually update the businesses online privacy policy. Under Cal. Civ. Code § 1798.130(a)(5), CCPA-covered businesses must among other things update their online privacy policies at least once every 12 months. Note that CCPA regulations establish content requirements for online privacy policies, one of which is that the policy must include “the date the privacy policy was last updated.” See 11 CCR § 7011(e)(4).

As businesses continue to grow, evolve, adopt new technologies, or otherwise make online and offline changes in their business, practices, and/or operations, CCPA required privacy policies may no longer accurately or completely reflect the collection and processing of personal information. Consider, for example, the adoption of emerging technologies, such as so-called “artificial intelligence” tools. These tools may be collecting, inferring, or processing personal information in ways that were not contemplated when preparing the organization’s last privacy policy update.

The business also may have service providers that collect and process personal information on behalf of the business in ways that are different than they did when they began providing services to the business.

Simply put: If your business (or its service providers) has adopted any new technologies or otherwise changed how it collects or processes personal information, your privacy policy may need an update.

Practical Action Items for Businesses

Here are some steps businesses can take to comply with the annual privacy policy review and update requirement under the CCPA:

  • Inventory Personal Information
    Reassess what categories of personal information your organization collects, processes, sells, and shares. Consider whether new categories—such as biometric, geolocation, or video —have been added.
  • Review Data Use Practices
    Confirm whether your uses of personal information have changed since the last policy update. This includes whether you are profiling, targeting, or automating decisions based on the data.
  • Assess adoption of new technologies, such as AI and New Tech Tools
    Has your business adopted any new technologies or systems, such as AI applications? Examples may include:
    • AI notetakers, transcription, or summarization tools for use in meetings (e.g., Otter, Fireflies)
    • AI used for chatbots, personalized recommendations, or hiring assessments
  • Evaluate Third Parties and Service Providers
    Are you sharing or selling information to new third parties? Has your use of service providers changed, or have service providers changed their practices around the collection or processing of personal information?
  • Review Your Consumer Rights Mechanisms
    Are the methods for consumers to submit access, deletion, correction, or opt-out requests clearly stated and functioning properly?

These are only a few of the potential recent developments that may drive changes in an existing privacy policy. There may be additional considerations for businesses in certain industries and departments within those businesses that should be considered as well. Here are a few examples:

Retail Businesses

  • Loyalty programs collecting purchase history and predictive analytics data.
  • More advanced in-store cameras and mobile apps collecting biometric or geolocation information.
  • AI-driven customer service bots that gather interaction data.

Law Firms

  • Use of AI notetakers or transcription tools during client calls.
  • Remote collaboration tools that collect device or location data.
  • Marketing platforms that profile client interests based on website use.

HR Departments (Across All Industries)

  • AI tools used for resume screening and candidate profiling.
  • Digital onboarding platforms collecting sensitive identity data.
  • Employee productivity and monitoring software that tracks usage, productivity, or location.

The online privacy policy is not just a static compliance document—it’s a dynamic reflection of your organization’s data privacy practices. As technologies evolve and regulations expand, taking time once a year to reassess and update your privacy disclosures is not only a legal obligation in California but a strategic risk management step. And, while we have focused on the CCPA in this article, inaccurate or incomplete online privacy policies can elevate compliance and litigation risks under other laws, including the Federal Trade Commission Act and state protections against deceptive and unfair business practices.

Montana recently amended its privacy law through Senate Bill 297, effective October 1, 2025, strengthening consumer protections and requiring businesses to revisit their privacy policies that apply to citizens of Montana. Importantly, it lowered the threshold for applicability to persons and businesses who control or process the personal data of 25,000 or more consumers (previously 50,000), unless the controller uses that data solely for completing payments. For those who derive more than 25% of gross revenue from the sale of personal data, the threshold is now 15,000 or more consumers (previously 25,000).

With the amendments, nonprofits are no longer exempt unless they are set up to detect and prevent insurance fraud. Insurers are now similarly exempt.

When a consumer requests confirmation that a controller is processing their data, the controller can no longer disclose but must identify possession of: (1) social security numbers, (2) ID numbers, (3) financial account numbers, (4) health insurance or medical identification numbers, (5) passwords, security questions, or answers, or (6) biometric data.

Privacy notices must now include: (1) personal data categories, (2) controller’s purpose in possessing personal data, (3) categories controller sells or shares with third parties, (4) categories of third parties, (5) contact information for the controller, (6) explanation of rights and how to exercise them, and (7) the date privacy notice was last updated. Privacy notices must be accessible to and usable to people with disabilities and available in each language in which the controller provides a product or service. Any material changes to the controller’s privacy notice or practices require notices to affected consumers and the opportunity to withdraw consent. Notices need not be Montana-specific, but controllers must conspicuously post them on websites, in mobile applications, or through whatever medium the controller interacts with customers.

The amendments further clarified information the attorney general must publicly provide, including an online mechanism for consumers to file complaints. Further, the attorney general may now issue civil investigative demands and need not issue any notice of violation or provide a 60-day period for the controller to correct the violation.

A recent breach involving Indian fintech company Kirana Pro serves as a reminder to organizations worldwide: even the most sophisticated cybersecurity technology cannot make up for poor administrative data security hygiene.

According to a June 7 article in India Today, KiranaPro suffered a massive data wipe affecting critical business information and customer data. The company’s CEO believes the incident was likely the result of a disgruntled former employee, though he has not ruled out the possibility of an external hack, according to reporting. TechCrunch explained:

The company confirmed it did not remove the employee’s access to its data and GitHub account following his departure. “Employee offboarding was not being handled properly because there was no full-time HR,” KiranaPro’s chief technology officer, Saurav Kumar, confirmed to TechCrunch.

Unfortunately, this is not a uniquely Indian problem. Globally, organizations invest heavily in technical safeguards—firewalls, multi-factor authentication, encryption, endpoint detection, and more. These tools are essential, but not sufficient.

The Silent Risk of Inactive Accounts

One of the most common (and preventable) vectors for insider incidents or credential abuse is failure to promptly deactivate system access when an employee departs. Whether termination is amicable or not, if a former employee retains credentials to email, cloud storage, or enterprise software, the organization is vulnerable. These accounts may be exploited intentionally (as suspected in the KiranaPro case) or unintentionally if credentials are stolen or phished later.

Some organizations assume their IT department is handling these terminations automatically. Others rely on inconsistent handoffs between HR, legal, and IT teams. Either way, failure to follow a formal offboarding checklist—and verify deactivation—may be a systemic weakness, not a fluke.

It’s Not Just About Tech—It’s About Governance

This breach illustrates the point that information security is as much about governance and process as it is about technology. Managing who has access to what systems, when, and why is a core component of security frameworks such as NIST, ISO 27001, and the CIS Controls. In fact, user access management—including timely revocation of access upon employee separation—is a foundational expectation in every major cybersecurity risk assessment.

Organizations should implement the following best practices:

  1. Establish a formal offboarding procedure. Involve HR, IT, and Legal to ensure immediate deactivation of all accounts upon separation.
  2. Automate user provisioning and deprovisioning where possible, using identity and access management (IAM) tools.
  3. Maintain a system of record for all access rights. Periodically audit active accounts and reconcile them against current employees and vendors.
  4. Train supervisors and HR personnel to notify IT or security teams immediately upon termination or resignation. There also may be cases where monitoring an employee’s system activity in anticipation of termination may be prudent.

The Takeaway

Wherever your company does business and regardless of industry, the fundamentals are the same: a lapse in basic access control can cause as much damage as a ransomware attack. The KiranaPro incident is a timely cautionary tale. Organizations must view cybersecurity not only as a technical discipline but as an enterprise-wide responsibility.

In today’s hybrid and remote work environment, organizations are increasingly turning to digital employee management platforms that promise productivity insights, compliance enforcement, and even behavioral analytics. These tools—offered by a growing number of vendors—can monitor everything from application usage and website visits to keystrokes, idle time, and screen recordings. Some go further, offering video capture, geolocation tracking, AI-driven risk scoring, sentiment analysis, and predictive indicators of turnover or burnout.

While powerful, these platforms also carry real legal and operational risks if not assessed, configured, and governed carefully.

Capabilities That Go Beyond Traditional Monitoring

Modern employee management tools have expanded far beyond “punching in,” reviewing emails, and tracking websites visited. Depending on the features selected and how the platform is configured, employers may have access to:

  • Real-time screen capture and video recording
  • Automated time tracking and productivity scoring
  • Application and website usage monitoring
  • Keyword or behavior-based alerts (e.g., data exfiltration risks)
  • Behavioral biometrics or mouse/keyboard pattern analysis
  • AI-based sentiment or emotion detection
  • Geolocation or IP-based presence tracking
  • Surveys and wellness monitoring tools

Not all of these tools are deployed in every instance, and many vendors allow companies to configure what they monitor. Some important questions arise, such as who at the company is making the decisions on how to configure the tool, what data is collected, is the collection permissible, who has access , how are decisions made using that data, and what safeguards are in place to protect the data. But even limited use can present privacy and employment-related risks if not governed effectively.

Legal and Compliance Risks

While employers generally have some leeway to monitor their employees on company systems, existing and emerging law, particularly concerning AI, along with considering best practices, employee relations, and other factors should help with developing some guidelines.

  • Privacy Laws: State and international privacy laws (like the California Consumer Privacy Act, GDPR, and others) may require notice, consent, data minimization, and purpose limitation. Even in the U.S., where workplace privacy expectations are often lower, secretive or overly broad monitoring can trigger complaints or litigation.
  • Labor and Employment Laws: Monitoring tools that disproportionately affect certain groups or are applied inconsistently may prompt discrimination or retaliation claims. Excessive monitoring activities could trigger bargaining obligations and claims concerning protected concerted activity.
  • AI-Driven Features: Platforms that employ AI or automated decision-making—such as behavioral scoring or predictive analytics—may be subject to emerging AI-specific laws and guidance, such as New York City’s Local Law 144, Colorado’s AI Act, and AI regulations recently approved by the California Civil Rights Department under the Fair Employment and Housing Act (FEHA) concerning the use of automated decision-making systems.
  • Data Security and Retention: These platforms collect sensitive behavioral data. If poorly secured or over-retained, that data could become a liability in the event of a breach or internal misuse.

Governance Must Extend Beyond IT

Too often, these tools are procured and managed primarily, sometimes exclusively, by IT or security teams without broader organizational involvement. Given the nature of data these tools collect and analyze, as well as their potential impact on members of a workforce, a cross-functional approach is a best practice.

Involving stakeholders from HR, legal, compliance, data privacy, etc., can have significant benefits not only at the procurement and implementation stages, but also throughout the lifecycle of these tools. This includes regular reviews of feature configurations, access rights, data use, decision making, and staying abreast of emerging legal requirements.

Governance considerations should include:

  • Purpose Limitation and Transparency: Clear internal documentation and employee notices should explain what is being monitored, why, and how the information will be used.
  • Access Controls and Role-Based Permissions: Not everyone needs full access to dashboards or raw monitoring data. Access should be limited to what’s necessary and tied to a specific function.
  • Training and Oversight: Employees who interact with the monitoring dashboards must understand the scope of permitted use. Misuse of the data—whether for personal curiosity, retaliation, or outside policy—should be addressed appropriately.
  • Data Minimization and Retention Policies: Avoid “just in case” data collection. Align retention schedules with actual business need and regulatory requirements.
  • Ongoing Review of Vendor Practices: Some vendors continuously add or enable new features that may shift the risk profile. Governance teams should review vendor updates and periodically reevaluate what’s enabled and why.

A Tool, Not a Silver Bullet

Used thoughtfully, employee management platforms can be a valuable part of a company’s compliance and productivity strategy. But they are not “set it and forget it” solutions. The insights they provide can only be trusted—and legally defensible—if there is strong governance around their use.

Organizations must manage not only their employees, but also the people and tools managing their employees. That means recognizing that tools like these sit at the intersection of privacy, ethics, security, and human resources—and must be treated accordingly.

“Our cars know how fast you’re driving, where you’re going, how long you stay there. They know where we work, they know whether we stop for a drink on the way home, whether we worship on the weekends, and what we do on our lunch hours.” OR Representative David Gomberg

The Oregon Legislature recently enacted House Bill 3875, amending the Oregon Consumer Privacy Act (OCPA) effective September 28. 2025, to broaden its scope to include motor vehicle manufacturers and their affiliates that control or process personal data from a consumer’s use of a vehicle or its components.

While this expansion is clear in its application to vehicle manufacturers, it raises important questions for automobile dealerships, particularly those “affiliated”—formally or informally—with manufacturers. Dealerships should consider whether they may now be subject to the full scope of Oregon’s privacy law. Of course, they may be subject directly to the OCPA in their own right.

The Amendment: HB 3875

HB 3875 modifies ORS 646A.572 to extend the OCPA’s privacy obligations to:

“A motor vehicle manufacturer or an affiliate of the motor vehicle manufacturer that controls or processes personal data obtained from a consumer’s use of a motor vehicle or a vehicle’s technologies or components.”

Who Counts as an “Affiliate”?

To determine whether a dealership is subject to these new obligations, one must examine the OCPA’s definition of affiliate:

“Affiliate” means a person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with another person such that:

      (a) The person owns or has the power to vote more than 50 percent of the outstanding shares of any voting class of the other person’s securities;

      (b) The person has the power to elect or influence the election of a majority of the directors, members or managers of the other person;

      (c) The person has the power to direct the management of another person; or

      (d) The person is subject to another person’s exercise of the powers described in paragraph (a), (b) or (c) of this subsection.

This definition introduces some ambiguity for dealerships. Many dealerships operate as independent businesses, even if they sell only one manufacturer’s vehicles and display that brand prominently. While they may be contractually tied to a manufacturer, they may not meet the legal standard of being controlled by or under common control with that manufacturer as described in the definition.

However, certain dealership groups—particularly those owned or operated by manufacturers or holding companies—may clearly fall within the definition of “affiliate.”

Dealerships should evaluate their corporate structure and agreements with manufacturers to determine whether this definition might apply to them.

Why This Matters

Entities subject to the OCPA must comply with a range of privacy requirements, including:

  • Providing transparent privacy notices
  • Obtaining consumer consent for data collection and sharing under certain circumstances
  • Offering consumer rights such as access, correction, deletion, and data portability
  • Implementing reasonable data security measures

These obligations extend to any personal data collected through vehicle technologies, such as navigation systems, driver behavior analytics, location data, and mobile app integrations.

Federal Context: FTC Enforcement

Dealerships should also remain aware of federal obligations. Under the Gramm-Leach-Bliley Act (GLBA), auto dealers engaged in leasing or financing must follow privacy and safeguard rules enforced by the Federal Trade Commission (FTC).

The FTC has published detailed guidance for auto dealers, including:

What Dealerships Should Do Now

Even if a dealership is not legally an “affiliate” under the OCPA or subject to a similar state comprehensive privacy law,  the trend toward regulating vehicle-generated data suggests it’s time to proactively review data practices. Dealerships should:

  1. Conduct a data inventory to identify what personal data is collected, especially from connected vehicle systems.
  2. Update privacy notices and practices in accordance with state and federal law.
  3. Review contracts with manufacturers and vendors for data-sharing provisions and compliance obligations.
  4. Train staff on new privacy responsibilities and how to respond to consumer data requests.

On March 10, 2025, California Attorney General Rob Bonta announced an investigative sweep targeting the location data industry, emphasizing compliance with the California Consumer Privacy Act (CCPA). This announcement follows the California legislature proposing a bill that, if passed, would impose restrictions on the collection and use of geolocation data.

Of course, concerns about geolocation tracking are not limited to California.

In California, the Attorney General’s investigation involved sending letters to advertising networks, mobile app providers, and data brokers that appear to the Attorney General to be in violation of the CCPA. These letters notify recipients of potential violations and request additional information regarding their business practices. The focus is on how businesses offer and effectuate consumers’ rights to stop the sale and sharing of personal information and to limit the use of sensitive personal information, including geolocation data.

To avoid enforcement actions, businesses in the location data industry must ensure compliance with the CCPA.

  1. Understand Consumer Rights: The CCPA grants California consumers several rights, including the right to know what personal information is being collected, the right to opt out of the sale or sharing of their personal information, and the right to delete their personal information. Because precise geolocation data is “sensitive personal information” under the CCPA, consumer rights also include the right to limit the use or disclosure of such information. Businesses must clearly communicate these rights to consumers (which includes employees).
  2. Implement Opt-Out/Limitation Mechanisms: As noted, businesses must provide consumers with the ability to opt out of the sale and sharing of their personal information, and to limit the use or disclosure of sensitive personal information. This includes implementing clear and accessible opt-out/limitation request mechanisms on websites and mobile apps. Once a consumer opts out, businesses cannot sell or share their personal information unless they receive authorization to do so again.
  3. Transparency and Accountability: Businesses must be transparent about their data collection and disclosure practices. This includes providing detailed privacy policies that explain what data is collected, how it is used, and the categories of third parties to whom it is disclosed. Additionally, businesses should be prepared to respond to inquiries from the Attorney General’s office and provide documentation of their compliance efforts.

If you have questions about the current California investigation into geolocation or need assistance in ensuring compliance with the CCPA, contact a Jackson Lewis attorney to discuss.

Businesses that track the geolocation of individuals—whether for fleet management, sales and promotion, logistics, risk mitigation, or other reasons—should closely monitor the progress of California Assembly Bill 1355 (AB 1355), also known as the California Location Privacy Act. If passed, this bill would impose significant restrictions on the collection and use of geolocation data, requiring many businesses to overhaul their location tracking policies and procedures.

California has long been at the forefront of data privacy regulation, particularly in the area of location tracking. Section 637.7 of the California Penal Code, for example, provides that no person or entity in California may use an electronic tracking device to determine the location or movement of a person. Notably the law does not apply when the registered owner, lessor, or lessee of a vehicle has consented to the use such a device with respect to that vehicle.

More recently, the California Consumer Privacy Act of 2018 (CCPA) established a comprehensive privacy and security framework for personal information of California consumers, which includes granting consumers rights over their personal information. Under the CCPA, consumers have the right, subject to some exceptions, to limit the use of their “sensitive personal information,” a defined term which includes geolocation data. The California Privacy Rights Act of 2020 (CPRA) amended the CCPA, further strengthening these protections by enhancing consumer rights and enforcement mechanisms.

Importantly, employees and contractors are considered “consumers” under the CCPA.

Key Provisions of AB 1355

If enacted, AB 1355 would place strict limits on how businesses collect, use, and retain location information. Here are the major takeaways for businesses that track geolocation data.

Who Does the Law Apply To?  The law would apply to any business (referred to as a “covered entity”) that collects or uses location data from individuals in California, although there is an exception for the location information of patients if the information is protected by HIPAA or similar laws. Government agencies are not considered covered entities but are prohibited from monetizing location information.

The bill defines “individual” as a “natural person located within the State of California.” So, it looks like the individual need not be a California resident. In addition, the collection or use of location data must be necessary to provide goods or services requested by that individual. It is unclear how this provision would apply in the employment context.

Express Opt-In Requirement. Individuals would be required to expressly opt in before their location data could be collected; businesses would not be permitted to infer consent or use pre-checked boxes.

Prohibited Actions. Businesses would not be permitted to:

  • Collect more precise location data than is necessary.
  • Retain location data longer than necessary.
  • Sell, rent, trade, or lease location data to third parties.
  • Infer additional data from collected location information beyond what is necessary.
  • Disclose location data to government agencies without a valid court order issued by a California court.

Notice and Policy Requirement. Under AB 1355, businesses would be required to provide clear, prominent notice at the point where location data is collected. The notice would need to include the name of the covered entity and service provider collecting the information, and a phone number and an internet website where the individual can obtain more information. Companies also would need to maintain a location privacy policy detailing, among other things:

  • What location data is collected.
  • The retention and deletion policies.
  • Whether the data is used for targeted advertising.
  • The identities of third parties or service providers with access to the data.

Any changes to this policy would require at least 20 days’ notice and renewed consent.

Enforcement and Legal Remedies. If enacted, AB 1355 would permit the California Attorney General, district attorneys, and other public prosecutors to bring lawsuits against non-compliant businesses. Remedies could include all of the following:

  • Actual damages suffered by affected individuals.
  • A civil penalty of $25,000.
  • Court-ordered injunctions and attorney’s fees for prevailing plaintiffs.

Implications for Businesses Engaged in Location Tracking

This bill represents a major shift in how businesses must approach location tracking. If enacted, businesses relying on geolocation data for purposes such as monitoring employees, connecting with customers, improving logistics, or managing risk must:

  • Implement new opt-in procedures before collecting location data.
  • Reevaluate their data retention policies to ensure compliance.
  • Review agreements with third-party vendors that process location data.
  • Update their privacy policies and internal procedures to align with the new legal requirements.

In addition to monitoring the path of this legislation, businesses also should consider revisiting their current electronic monitoring and tracking activities. Data privacy and security laws have expanded in recent years, with geolocation data being one of the more sensitive categories of personal information protected.

Employee security awareness training is a best practice and a “reasonable safeguard” for protecting the privacy and security of an organization’s sensitive data.  The list of data privacy and cybersecurity laws mandating employee data protection training continues to grow and now includes the EU AI Act.  The following list is a high-level sample of employee training obligations. 

EU AI Act. Effective February 2, 2025, Article 4 of the Act requires that all providers and deployers of AI models or systems must ensure their workforce is “AI literate”.  This means training workforce members to achieve a sufficient level of AI literacy considering various factors such as the intended use of the AI system. Training should incorporate privacy and security awareness given the potential risks. Notably, the Act applies broadly and has extraterritorial reach. As a result, this training obligation may apply to organizations including but not limited to:

  • providers placing on the market or putting into service AI systems or placing on the market general-purpose AI models in the Union, irrespective of whether those providers are established or located within the Union or in a third country (e.g., U.S.);
  • deployers of AI systems that have their place of establishment or are located within the Union; and
  • providers and deployers of AI systems that have their place of establishment or are located in a third country (e.g., U.S.), where the output produced by the AI system is used in the Union.

California Consumer Privacy Act, as amended (CCPA). Cal. Code Regs. Tit. 11 sec. 7100 requires that all individuals responsible for the business’s compliance with the CCPA, or involved in handling consumer inquiries about the business’s information practices, must be informed of all of the requirements in the CCPA including how to direct consumers to exercise their rights under the CCPA. Under the CCPA, “consumer” means a California resident and includes employees, job applicants and individuals whose personal data is collected in the business to business context.

HIPAA. Under HIPAA, a covered entity or business associate must provide HIPAA privacy training as well as security awareness training to all workforce members. Note that this training requirement may apply to employers in their role as a plan sponsor of a self-insured health plan.

Massachusetts WISP law (201 CMR 17.03 201). Organizations that own or license personal information about a resident of the Commonwealth are subject to a duty to protect that information. This duty includes implementing a written information security program that addresses ongoing employee training. 

23 NYCRR 500. The New York Department of Financial Services’ cybersecurity requirement for financial services companies requires that covered entities provide cybersecurity personnel with cybersecurity updates and sufficient training to address relevant cybersecurity risks. 

Gramm-Leach-Bliley Act and the Safeguards Rule. The Safeguards Rule requires covered financial institutions to implement a written information security program to safeguard non-public information. The program must include employee security awareness training. In 2023, the FTC expanded the definition of financial institutions to include additional industries such as automotive dealerships and retailers that process financial transactions. 

EU General Data Protection Regulation (“EU GDPR”). Under Art. 39 of the EU GDPR, the tasks of a Data Protection Officer include training staff involved in the organization’s data processing activities.

In addition to the above, there are express or implied security awareness training obligations in numerous other laws and regulations including certain Department of Homeland Security contractors, licensees under state insurance laws modelled on the NAIC Insurance Data Security Model Law, and organizations that process payments via credit cards in accordance with PCI DSS.

Whether mandated by law or implemented as a best practice, ongoing employee privacy and security training plays a key role in safeguarding an organization’s sensitive data. Responsibility for protecting data is no longer the sole province of IT professionals. All workforce members with access to the organization’s sensitive data and information systems share that responsibility. And various stakeholders, including HR professionals, play a vital role in supporting that training.  

For more information on developing employee training check out our prior posts.

As the integration of technology in the workplace accelerates, so do the challenges related to privacy, cybersecurity, and the ethical use of artificial intelligence (AI). Human resource professionals and in-house counsel must navigate a rapidly evolving landscape of legal and regulatory requirements. This National Privacy Day, it’s crucial to spotlight emerging issues in workplace technology and the associated implications for data privacy, cybersecurity, and compliance.

We explore here practical use cases raising these issues, highlight key risks, and provide actionable insights for HR professionals and in-house counsel to manage these concerns effectively.

1. Wearables and the Intersection of Privacy, Security, and Disability Law

Wearable devices have a wide range of use cases including interactive training, performance monitoring, and navigation tracking. Wearables such as fitness trackers and smartwatches became more popular in HR and employee benefits departments when they were deployed in wellness programs to monitor employees’ health metrics, promote fitness, and provide a basis for doling out insurance premium incentives. While these tools offer benefits, they also collect sensitive health and other personal data, raising significant privacy and cybersecurity concerns under the Health Insurance Portability and Accountability Act (HIPAA), the Americans with Disabilities Act (ADA), and state privacy laws.

Earlier this year, the Equal Employment Opportunity Commission (EEOC) issued guidance emphasizing that data collected through wearables must align with ADA rules. More recently, the EEOC withdrew that guidance in response to an Executive Order issued by President Trump. Still, employers should evaluate their use of wearables and whether they raise ADA issues, such as voluntary use of such devices when collecting confidential medical information, making disability-related inquiries, and using aggregated or anonymized data to prevent discrimination claims.

Beyond ADA compliance, cybersecurity is critical. Wearables often collect sensitive data and transmit same to third-party vendors. Employers must assess these vendors’ data protection practices, including encryption protocols and incident response measures, to mitigate the risk of breaches or unauthorized access.

Practical Tip: Implement robust contracts with third-party vendors, requiring adherence to privacy laws, breach notification, and security standards. Also, ensure clear communication with employees about how their data will be collected, used, and stored.

2. Performance Management Platforms and Employee Monitoring

Platforms like Insightful and similar performance management tools are increasingly being used to monitor employee productivity and/or compliance with appliable law and company policies. These platforms can capture a vast array of data, including screen activity, keystrokes, and time spent on tasks, raising significant privacy concerns.

While such tools may improve efficiency and accountability, they also risk crossing boundaries, particularly when employees are unaware of the extent of monitoring and/or where the employer doesn’t have effective data minimization controls in place. State laws like the California Consumer Privacy Act (CCPA) can place limits on these monitoring practices, particularly if employees have a reasonable expectation of privacy. They also can require additional layers of security safeguards and administration of employee rights with respect to data collected and processed using the platform.

Practical Tip: Before deploying such tools, assess the necessity of data collection, ensure transparency by notifying employees, and restrict data collection to what is strictly necessary for business purposes. Implement policies that balance business needs with employee rights to privacy.

3. AI-Powered Dash Cams in Fleet Management

AI-enabled dash cams, often used for fleet management, combine video, audio, GPS, telematics, and/or biometrics to monitor driver behavior and vehicle performance, among other things. While these tools enhance safety and efficiency, they also present significant privacy and legal risks.

State biometric privacy laws, such as Illinois’s Biometric Information Privacy Act (BIPA) and similar laws in California, Colorado, and Texas, impose stringent requirements on biometric data collection, including obtaining employee consent and implementing robust data security measures. Employers must also assess the cybersecurity vulnerabilities of dash cam providers, given the volume of biometric, location, and other data they may collect.

Practical Tip: Conduct a legal review of biometric data collection practices, train employees on the use of dash cams, and audit vendor security practices to ensure compliance and minimize risk.

4. Assessing Vendor Cybersecurity for Employee Benefits Plans

Third-party vendors play a crucial role in processing data for retirement plans, such as 401(k) plan, as well as health and welfare plans. The Department of Labor (DOL) emphasized in recent guidance the importance of ERISA plan fiduciaries’ role to assess the cybersecurity practices of such service providers.

The DOL’s guidance underscores the need to evaluate vendors’ security measures, incident response plans, and data breach notification practices. Given the sensitive nature of data processed as part of plan administration—such as Social Security numbers, health records, and financial information—failure to vet vendors properly can lead to breaches, lawsuits, and regulatory penalties, including claims for breach of fiduciary duty.

Practical Tip: Conduct regular risk assessments of vendors, incorporate cybersecurity provisions into contracts, and document the due diligence process to demonstrate compliance with fiduciary obligations.

5. Biometrics for Access, Time Management, and Identity Verification

Biometric technology, such as fingerprint or facial recognition systems, is widely used for identity verification, physical access, and timekeeping. While convenient, the collection of biometric data carries significant privacy and cybersecurity risks.

BIPA and similar state laws require employers to obtain written consent, provide clear notices about data usage, and adhere to stringent security protocols. Additionally, biometrics are uniquely sensitive because they cannot be changed if compromised in a breach.

Practical Tip: Minimize reliance on biometric data where possible, ensure compliance with consent and notification requirements, and invest in encryption and secure storage systems for biometric information. Check out our Biometrics White Paper.

6. HIPAA Updates Affecting Group Health Plan Compliance

Recent changes to the HIPAA Privacy Rule, including provisions related to reproductive healthcare, significantly impact group health plans. The proposed HIPAA Security Rule amendments also signal stricter requirements for risk assessments, access controls, and data breach responses.

Employers sponsoring group health plans must stay ahead of these changes by updating their HIPAA policies and Notice of Privacy Practices, training staff, and ensuring that business associate agreements (BAAs) reflect the new requirements.

Practical Tip: Regularly review HIPAA compliance practices and monitor upcoming changes to ensure your group health plan aligns with evolving regulations.

7. Data Breach Notification Laws and Incident Response Plans

Many states have updated their data breach notification laws, lowering notification thresholds, shortening notification timelines, and expanding the definition of personal information. Employers should revise their incident response plans (IRPs) to align with these changes.

Practical Tip: Ensure IRPs reflect updated laws, test them through simulated breach scenarios, and coordinate with legal counsel to prepare for reporting obligations in case of an incident.

8. AI Deployment in Recruiting and Retention

AI tools are transforming HR functions, from recruiting to performance management and retention strategies. However, these tools require vast amounts of personal data to function effectively, increasing privacy and cybersecurity risks.

The EEOC and other regulatory bodies have cautioned against discriminatory impacts of AI, particularly regarding protected characteristics like disability, race, or gender. (As noted above, the EEOC recently withdrew its AI guidance under the ADA and Title VII following an Executive Order by the Trump Administration.) For example, the use of AI in hiring or promotions may trigger compliance obligations under the ADA, Title VII, and state laws.

Practical Tip: Conduct bias audits of AI systems, implement data minimization principles, and ensure compliance with applicable anti-discrimination laws.

9. Employee Use of AI Tools

Moving beyond the HR department, AI tools are fundamentally changing how people work.  Tasks that used to require time-intensive manual effort—creating meeting minutes, preparing emails, digesting lengthy documents, creating PowerPoint decks—can now be completed far more efficiently with assistance from AI.  The benefits of AI tools are undeniable, but so too are the associated risks.  Organizations that rush to implement these tools without thoughtful vetting processes, policies, and training will expose themselves to significant regulatory and litigation risk.     

Practical Tip: Not all AI tools are created equal—either in terms of the risks they pose or the utility they provide—so an important first step is developing criteria to assess, and then going through the process of assessing, which AI tools to permit employees to use.  Equally important is establishing clear ground rules for how employees can use those tools.  For instance, what company information are they permitted to use to prompt the tool; what are the processes for ensuring the tool’s output is accurate and consistent with company policies and objectives; and should employee use of AI tools be limited to internal functions or should they also be permitted to use these tools to generate work product for external audiences. 

10. Data Minimization Across the Employee Lifecycle

At the core of many of the above issues is the principle of data minimization. The California Privacy Protection Agency (CPPA) has emphasized that organizations must collect only the data necessary for specific purposes and ensure its secure disposal when no longer needed.

From recruiting to offboarding, HR professionals must assess whether data collection practices align with the principle of data minimization. Overcollection not only heightens privacy risks but also increases exposure in the event of a breach.

Practical Tip: Develop a data inventory mapping employee information from collection to disposal. Regularly review and update policies to limit data retention and enforce secure deletion practices.

Conclusion

The rapid adoption of emerging technologies presents both opportunities and challenges for employers. HR professionals and in-house counsel play a critical role in navigating privacy, cybersecurity, and AI compliance risks while fostering innovation.

By implementing robust policies, conducting regular risk assessments, and prioritizing data minimization, organizations can mitigate legal exposure and build employee trust. This National Privacy Day, take proactive steps to address these issues and position your organization as a leader in privacy and cybersecurity.

Insider threats continue to present a significant challenge for organizations of all sizes. One particularly concerning scenario involves employees who leave an organization and impermissibly take or download sensitive company data. These situations can severely impact a business, especially when departing employees abscond with confidential business information or trade secrets. Focusing on how the theft of such information could cripple a business’s operations, competitive advantage, etc. is warranted. It is critical not to overlook, however, other legal and regulatory implications stemming from the theft of certain data, including potential data breach notification obligations.

The Importance of Safeguarding Trade Secrets

Trade secrets generally refer to information that has commercial value because it’s kept secret. Examples include formulas, patterns, programs, devices, methods, and other valuable business data. Such data are often the lifeblood of a company’s competitive edge. These secrets must be safeguarded to retain their value and legal protections under the Uniform Trade Secrets Act (UTSA) which has been adopted by most states. Businesses will need to demonstrate that they took reasonable measures to protect their trade secrets.

Reasonable safeguards under the UTSA can include:

  • Implementing access controls to restrict employees’ ability to download or share sensitive information.
  • Requiring employees to sign confidentiality agreements and restrictive covenants.
  • Regularly training employees on the importance of data security and confidentiality.
  • Using monitoring tools to detect unusual access or downloads of sensitive data.

Failing to adopt such safeguards can jeopardize a company’s ability to claim protection for trade secrets and pursue legal remedies if those secrets are stolen. Companies should consult with trusted IT and legal advisors to ensure they have adequate safeguards.

Beyond Trade Secrets: Data Breach Concerns

While the theft of confidential business and trade secret information rightly garners attention, focusing exclusively on this aspect may cause companies to miss another critical risk: the theft of personal information. As part of their efforts to remove company information, departing employees may inadvertently or intentionally take personal information, such as employee or customer data, which could trigger significant legal obligations, particularly if accessed or acquired without authorization.

Contrary to common assumptions, data breach notification laws do not solely apply to stolen Social Security numbers. Most state data breach laws define “personal information” broadly to include elements such as:

  • Financial account information, including debit or credit card numbers.
  • Driver’s license or state identification numbers.
  • Health insurance and medical information.
  • Dates of birth.
  • Online account credentials, such as usernames and passwords.
  • Biometric data, such as fingerprints or facial recognition profiles.

The unauthorized access or acquisition of these data elements together with the individual’s name can constitute a data breach, requiring timely notification to affected individuals and, in some cases, regulatory authorities.

Broader Regulatory and Contractual Implications

In addition to state breach notification laws that seek to protect personal information, companies must consider other regulatory and contractual obligations when sensitive data is stolen. For example:

  • Publicly traded companies: Theft of critical business information by a departing employee may require disclosure under U.S. Securities and Exchange Commission (SEC) regulations if the theft is deemed material. If a company determines the materiality threshold has been reached, it has four days to report to the public.
  • Critical infrastructure businesses: Companies providing services in regulated industries, such as energy or healthcare, may have reporting obligations to regulatory authorities if sensitive confidential business data is compromised.
  • Contractual obligations: Many businesses enter into agreements with business customers that require notification if confidential business information or personal data is compromised.

Ignoring these obligations could expose organizations to fines, lawsuits, and reputational harm, compounding the difficulties already created by the theft of an organization’s confidential business information.

Taking a Comprehensive Approach to Data Theft

The theft of confidential business information by a departing employee can be devastating for a business. However, focusing solely on restrictive covenants, trade secrets, or business information risks overlooking the full scope of legal and regulatory obligations. To effectively respond to such incidents, companies should:

  1. Identify the nature of the stolen data: Assess whether the data includes personal information, trade secrets, or other sensitive information that could trigger specific legal obligations.
  2. Evaluate legal and regulatory obligations: Determine whether notification is required under state breach laws, SEC or other regulations (if applicable), industry-specific rules, or contractual agreements.
  3. Leverage restrictive covenant agreements: Assess appropriate legal or contractual remedies, including under restrictive covenant, confidentiality, and other agreements, as part of a broader strategy to address the theft.
  4. Implement safeguards: Strengthen data protection measures to mitigate the risk of future incidents, including employee training, enhanced monitoring, and robust exit procedures.

While dealing with insider threats is undoubtedly challenging, taking a comprehensive and proactive approach can help businesses protect their interests and minimize legal exposure. In today’s interconnected and highly regulated world, understanding the full scope of risks and obligations tied to data theft is essential for any business.