Privacy and Data Security Alert | July 2019

Shook, Hardy & Bacon L.L.P.

States Continue to Lead the Way on Privacy Legislation

TAKEAWAY

Unless and until preemptive federal legislation is passed, the patchwork of state privacy laws will continue to expand and diversify.

New York Privacy Act Would Create Private Right of Action

Introduced on May 9, 2019, the New York Privacy Act continues the trend of states considering broader, privacy-focused legislation. The Act would require companies to disclose their methods of de-identifying personal information, place special safeguards around data sharing, and allow consumers to obtain the names of all entities with whom their information is shared. Also included is a private right of action for any violation of the Act, though no provision is made for statutory damages; plaintiffs would be limited to actual damages and attorney’s fees. The bill is currently awaiting action by the Senate Consumer Protection Committee.

Update: Maine Bill Signed into Law Requiring ISPs to Obtain Opt-In Consent from Customers

Following Governor Janet Mills’ signature, Maine’s privacy lawwill take effect on July 1, 2020. The law requires ISPs operating in Maine to obtain express, affirmative consent from customers before using, disclosing, selling or permitting access to a customer’s personal information, which would include web-browsing history, application-usage history, geolocation information, financial information and health information. With certain exceptions, the bill would prohibit a provider from discriminating against customers who refuse to provide consent.

Oregon Enacts Amendments to Data Breach Notification Law

Oregon Governor Kate Brown has approved five amendments to the Oregon Consumer Identity Theft Protection Act (including a name change to the “Oregon Consumer Information Privacy Act”), with the changes taking effect January 1, 2020. The amendments impose additional reporting requirements in the event of a breach (such as notification to the attorney general when more than 250 consumers are affected), redefine the term “covered entity,” expand the definition of personal information to include online-account information, and allow vendors and covered entities to use their compliance with federal data-security laws as an affirmative defense to violations of the Act.

Bill to Exempt Employee Information from CCPA Advances and Changes

AB 25, one of the most closely watched bills that would amend the California Consumer Privacy Act (CCPA), overcame a major hurdle by passing the California Assembly shortly before the May deadline to do so. A June 28 amendment then made significant changes to the structure and content of the bill. Previously, AB 25 modified the definition of “consumer” to exclude employees, etc., but the later amendment cancels that definition change in favor of three explicit exemptions from the CCPA for the personal information of “a job applicant to, an employee of, owner of, director of, officer of, medical staff member of, or contractor of” a business where the information is collected and used: 1) solely within the context of that person’s role; 2) as emergency-contact information; and 3) to administer benefits. (Definitions are also provided for the various individuals covered by the exemptions.)

The amendment to AB 25 would also allow businesses to require reasonable authentication of a consumer and to require a consumer to submit a request through her account if she maintains one with the business.

Seventh Circuit Victory in BIPA Suit for Improper Venue

In Miller v. Southwest Airlines, the Seventh Circuit determined that the plaintiffs—unionized employees of Southwest Airlines—must pursue their claims under the Illinois Biometric Information Privacy Act (BIPA) using the Railway Labor Act’s union-grievance procedures rather than through a class action in court. Due to the collective-bargaining agreements between Southwest (represented by Shook’s Melissa Siebert) and the employee union, the court found that “there can be no doubt that how workers clock in and out is a proper subject of negotiation between unions and employees” and is a mandatory subject of bargaining between the parties.

TAKEAWAY

Despite the Rosenbach decision lowering the bar for BIPA claims to get into court, other avenues are available for defendants to challenge the propriety of BIPA actions.

Controversial “Hack Back Bill” Reintroduced

Undeterred by vehement pushback to the original bill introduced in 2017, a bipartisan group of lawmakers has reintroduced the Active Cyber Defense Certainty Act (affectionately known as the “Hack Back Bill”). The bill aims to arm companies with the ability to use active-defense techniques that could otherwise give rise to liability under the Computer Fraud and Abuse Act (though the bill would offer no immunity from civil suits). Hacked companies would be able to turn the tables and penetrate a hacker’s system, but only to find out what happened to stolen information and to gather information for U.S. law enforcement. The bill would notallow a company to “impair essential functionality or install backdoors on the attacker’s system.”

And—thankfully—the bill requires both FBI review of defense techniques and notice to the FBI before the hacking is carried out. Numerous experts have raised concerns about the vague scope of the bill and the potential for harm to innocent individuals when hack backs go wrong.

TAKEAWAY

In the end, the Hack Back Bill is unlikely to become law, but its revival signals the onset of more high-profile efforts to enact privacy and security legislation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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