Privacy and cybersecurity risks continue to emerge for organizations large and small. While by no means exhaustive, we briefly discuss some key issues that organizations may need to focus on in 2019 and beyond.

Business Email Compromise (BEC)/Email Account Compromise (EAC) – BEC and EAC attacks are widespread and show no sign of slowing in the coming year. An FBI Report from July 2018 stated that BEC attacks have resulted in a 136% increase in identified global losses between December 2016 and May 2018, totaling $12.5 billion. BEC also known as a cyber-enabled financial fraud, often targets employees with access to company finances, enticing them through a variety of methods, including social engineering and computer intrusions, to conduct unauthorized transfers of funds. The harm may not end there as in many of these cases the attacks may also result in the access to and/or acquisition of some or all of the emails in the compromised email account(s) putting personal and other information at risk. Such attacks however, are not always associated with a request for a transfer of funds. Other variations of these attacks involve compromising legitimate business e-mail accounts and requesting personal information or wage and tax statement (W-2) forms for employees. The BEC/EAC scam continues to evolve and grow, targeting small, medium, and large business and personal transactions.

GDPR – If you’ve been following the headlines you know that in May 2018 the European Union’s General Data Protection Regulation (GDPR) took effect, marking the most significant change to European data privacy and security law in over 20 years. The GDPR can reach U.S.-based companies processing EU citizen personal data, including employee data. A main concern for companies is the significant fines the GDPR may impose for failure to comply – up to €20 million or up to 4 percent of annual global revenues – whichever is greater. 2019 will likely provide greater insight into the extent to which EU data protection authorities (DPAs) will enforce such fines. Max Schrems, founder of the European Centre for Digital Rights, anticipates that although uniformity of enforcement is supposed to be ensured, the level of GDPR enforcement may vary across the EU as approach and culture will play a role in how aggressively GDPR violations are pursued by nation state DPAs.

California Consumer Privacy Act – In June 2018 the California legislature enacted the California Consumer Privacy Act (CCPA), with several amendments passed in September (SB 1121).   Although the language of the CCPA specifically refers to consumers, the definition of “Consumer” was drafted broadly enough to include employees, and lobbying efforts to exclude employees from the definition have, to date, been unsuccessful. Key consumer rights include: a consumer’s right to request deletion of personal information, a consumer’s right to request that a business disclose the categories of information and the identity of any 3rd parties to which the information was sold or disclosed, and a consumer’s right to opt-out of sale of personal information. The CCPA, which is set to take effect January 1, 2020, will require significant preparation in 2019 for entities to ensure compliance. The CCPA will apply to any entity that does business in California and satisfies one of the following: (i) annual gross revenue in excess of $25 million, (ii) alone or in combination, annually buys, receives for the business’ commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households, or devices, or (iii) derives 50 percent or more of its annual revenues from selling consumers’ personal information.

State Law Developments – During 2018, states across the U.S. continued reassessing and amending their data privacy and security regulations. In May, Vermont passed a first of its kind law, H.764, requiring data brokers (businesses that collect and sell or license to third parties personal information of consumers with whom such businesses do not have a direct relationship) to implement a written information security program, disclose to individuals what data is being collected, and permit individuals to opt-out of the collection. In September, Colorado strengthened its consumer data protection law with a groundbreaking new bill requiring “reasonable security procedures and practices” for protecting personal identifying information, limiting the time frame to notify affected Colorado residents and the Attorney General of a data breach, and imposing data disposal rules, HB 1128.  In November, the Ohio Data Protection Act (2018 SB 220) took effect, as part of a broader CyberOhio Initiative intended to help Ohio businesses defend against cybersecurity threats. The Ohio law provides a safe harbor for businesses implementing and maintaining “reasonable” cybersecurity controls. In 2019, we expect similar state data privacy and security initiatives to continue to be proposed and enacted.

Biometric Privacy Laws – Companies collecting fingerprints, face scans, or other biometric identifiers/information from consumers and employees ( help manage employee time, permitting access to POS systems, or perimeter security) take note! Since 2015, there has been a marked increase of putative class actions based on Illinois’s Biometric Information Privacy Act (BIPA)that shows no sign of slowing. In 2019, the Illinois Supreme Court will be considering key questions concerning an individual’s right to sue. See our commentary on these issues in a recent issue of The Cybersecurity Law Report.  The Illinois law prohibits private entities from obtaining a person’s biometric identifier or biometric information unless the person is informed in writing and signs a release. While this may impact consumer relationships, this is of particular import to the workplace where many employers have implemented biometric tools to validate time entries. Although some consider Illinois the leader in biometric data protection, other states, including Washington and Texas, have enacted laws similar to the BIPA, and still others are considering such legislation. For more information on the BIPA and biometric information related concerns checkout our FAQs.

Do employers have an affirmative duty to protect employee data? – While several states mandate data security measures by statute (e.g. Massachusetts, California, Oregon, Maryland, etc.), in late November, the Pennsylvania Supreme Court issued a landmark decision, recognizing for the first time an employer’s affirmative, common law duty to “exercise reasonable care to safeguard their employees’ sensitive personal information by the employer on an internet accessible system.” The Pennsylvania Court also clarified that the “economic loss doctrine” does not preclude recovery of monetary damages, under a negligence theory, “provided that the plaintiff can establish the [employer’s] breach of a legal duty arising under common law that is independent of any duty assumed pursuant to contract”. In the coming year(s), other courts across the U.S. may address the issue of whether employers have an affirmative common law duty to protect employee data. This should prompt employers to assess their existing data and cybersecurity systems and protections, as well as what employee personal information is collected and maintained on company systems.

Telephone Consumer Protection Act (TCPA) – On November 13, the Supreme Court agreed to decide whether the Hobbs Act (also known as the Administrative Orders Review Act) requires the district court to accept the Federal Communications Commission (FCC) interpretation of the TCPA, in PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., No. 17-1705. The case could affect judicial deference to agency rules more generally. A split Fourth Circuit panel held that the Hobbs Act required the district court to defer to the FCC interpretation of the TCPA. The district court lacked authority to apply the two-step Chevron analysis in determining whether to adopt such rules, the Fourth circuit held. In other TCPA news, in March the U.S. Court of Appeals for the District of Columbia set aside the FCC’s expansive interpretation of what constitutes an ATDS and its approach to consent of reassigned wireless numbers. The court, however upheld the FCC’s approach to revocation of consent by “reasonable means” expressing a desire to receive no further messages from the caller and the scope of the FCC’s exemption for certain healthcare calls. Since that decision, a circuit court split has developed with the Third Circuit ruling that a dialer is not an ATDS unless it has the present ability to randomly or sequentially generate numbers and to dial them and the Ninth Circuit adopting a broader reading holding that the definition of ATDS includes any equipment that has the capacity to store random numbers and dial them, even if it cannot generate numbers randomly or sequentially. Further, Congress recently proposed the TRACED Act, to combat the increasing number of robocall scams and other intentional violations of telemarketing laws. The TRACED Act, if passed, broadens FCC authority to levy civil penalties and extends the time period for the FCC to catch and take civil enforcement action against intentional violations. Needless to say, 2019 should be an interesting year for the TCPA.

HIPAA Enforcement on the Rise – Federal and state enforcement activity near the end of 2018 may suggest greater enforcement in 2019. For example, in December 2018, State Attorneys General from a dozen states, including Arizona, Indiana, North Carolina and Wisconsin, joined forces to file suit against a medical software provider in the first ever multistate data breach suit alleging violations of the Health Insurance Portability and Accountability Act. The suit alleges that Medical Informatics Engineering Inc. and a subsidiary did not implement basic industry-standard security measures to protect electronic personal health information, leading to a 2015 data breach that exposed the sensitive personal information of almost 4 million people, including names, email addresses, dates of birth, Social Security numbers, lab results, health insurance policy information, diagnoses and medical conditions.

At the federal level, the Office for Civil Rights (OCR) announced resolutions in three HIPAA enforcement action. On November 26th, the OCR announced the resolution of an investigation into alleged HIPAA violations by a health practice specializing in allergies resulting from a doctor’s disclosure of patient information to a reporter. The provider agreed to pay $125,000 and adopt a two-year corrective action plan. On December 4th, the OCR announced that it had reached a settlement with the physician group over alleged HIPAA violations resulting from the sharing of protected health information (PHI) with a vendor but without having a business associate agreement in place. The provider agreed to pay $500,000 and adopt a robust corrective action plan including a complete enterprise-wide risk analysis and comprehensive policies and procedures. Finally, on December 11th, the OCR announced a settlement with a critical access hospital in Colorado, in response to a complaint that a former employee continued to have remote access to the hospital’s scheduling calendar which included patients’ electronic protected health information (ePHI). The hospital agreed to pay $111,400 and adopt a two-year corrective action plan.

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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a Principal in the Morristown, New Jersey, office of Jackson Lewis P.C. He founded and currently leads the firm’s Privacy, e-Communication and Data Security Practice, 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, Mr. Lazzarotti 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 – Mr. Lazzarotti 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 – Mr. Lazzarotti’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.

Mr. Lazzarotti 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.

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

Photo of Jason C. Gavejian Jason C. Gavejian

Jason C. Gavejian is a Principal in the Morristown, New Jersey, office of Jackson Lewis P.C. and a Certified Information Privacy Professional (CIPP/US) with the International Association of Privacy Professionals.

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

Mr. Gavejian’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.). Mr. Gavejian 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, Mr. Gavejian 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.

Mr. Gavejian represents companies with respect to inquiries from the HHS/OCR, state attorneys general, and other agencies alleging wrongful disclosure of personal/protected information. Mr. Gavejian 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.

Mr. Gavejian 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. Mr. Gavejian 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. Mr. Gavejian’s practice also focuses on advising/counseling employers regarding daily workplace issues.

Mr. Gavejian’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.

Mr. Gavejian 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,, @Law Magazine, Risk and Insurance Magazine, LXBN TV, Business Insurance Magazine, and

Mr. Gavejian is the Co-Chair 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. Mr. Gavejian 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, Mr. Gavejian served as a judicial law clerk for the Honorable Richard J. Donohue on the Superior Court of New Jersey, Bergen County.