UPDATE: The changes to the Massachusetts data breach notification law described below are now in effect. Thus, if you have discovered a data incident involving the personal information of Massachusetts residents you will want to review these changes carefully – they are significant and the Commonwealth is intent on educating the public about them. Because we have coached many clients through data breaches affecting Massachusetts residents, we recently received a letter from the Massachusetts Office of Consumer Affairs and Business Regulation (OCABR) alerting us of these changes. The same office published a set of FAQs about the law changes which emphasize some key points. For example, as discussed below, the new law expanded the content requirements for notifications to the Attorney General and OCABR to include, among other things, whether the business that experienced the breach maintains a written information security program (WISP) and whether they have updated the WISP. Businesses maintaining personal information of Massachusetts residents should revisit their incident response plan (or develop one).

Observers of the recent changes in the Massachusetts data breach notification law likely will focus on the addition of the obligation to provide 18 months of credit monitoring following a breach involving Social Security numbers (42 months, if the breached entity is a consumer reporting agency). This certainly is a significant change, making Massachusetts only the fourth state to have enacted a similar mandate (See also, California, Connecticut, and Delaware). However, other changes are perhaps much more significant for an organization that has a breach triggering the updated Massachusetts law, which becomes effective April 10, 2019.

Data security and breach notification legislative developments are off to a running start in 2019. On January 1, 2019, Vermont began regulating data brokers and South Carolina’s adoption of the National Association of Insurance Commissioners’ (NAIC’s) Insurance Data Security Model Law became effective adding significant breach notification and information security requirements for entities licensed by state insurance regulators, including insurers and agents. The North Carolina Attorney General announced a proposal to make significant changes to that state’s notification law, among them requiring notification for ransomware attacks. The trend continues in Massachusetts, where last week Gov. Charlie Baker signed legislation substantially updating the state’s breach notification law.

Here is an overview of some of key changes:

Organizations that experience a breach must report to the Attorney General and the Office of Consumer Affairs and Business Regulation whether they have a written information security program (WISP). Nearly ten years ago, Massachusetts enacted one of the most comprehensive set of data security regulations affecting certain organizations in the state. (Read more about that and get a compliance checklist here.) Organizations that have not adopted a WISP will have to inform the government that they have not done so, which likely will lead to a follow up inquiry concerning compliance and potentially significant penalties. But that is not all, they also will have to report information such as the type of personal information involved in the incident (e.g., social security number, driver’s license number), steps the organization has taken or plans to take relating to the incident, including updating the WISP, and a certification that they have offered compliant credit monitoring services, if applicable.

Parent companies may have to answer for breaches by subsidiaries. Organizations that must report a breach under the new law and that are owned by another person or corporation, must inform affected residents of the name of the parent or affiliated corporation. This provision is sure to create some confusion. For example, there is no level of ownership that is needed to be listed in the notice to affected residents. Additionally, because a breached entity might be owned by a few different entities, it is unclear if all of those entities would have to be listed. Clearly, this provision may create some unfavorable publicity for organizations whose subsidiaries experience a breach. As such, it might spur them to be more actively involved with the date security compliance and breach response efforts of their subsidiary and affiliated entities. Parents and affiliated companies may also want to revisit their cyber insurance policies to assess coverage for losses that may arise out of a subsidiary’s breach. For the breached subsidiary, this provision may result in them involving their parent companies sooner and more extensively in the breach response process.

Once an organization knows about a breach affecting a Massachusetts resident, it must notify the resident as soon as practicable and without unreasonable delay, and cannot wait to determine the total number of residents affected by the incident. Security incident investigations sometimes take time and it is not uncommon during those investigations for the number affected persons to grow as the investigation continues. With this change, businesses need to notify continually, and not wait for the investigation to conclude before sending notification. Additionally, because state agency notifications must include the number of affected persons, business will need to keep these agencies apprised of the growing number of residents affected.

The Office of Consumer Affairs and Business Regulation will be reporting about your breach on its website. When an organization reports a breach to the Office of Consumer Affairs and Business Regulation (OCABR), under the new law OCABR must post on its website copies of the sample notice sent to affected residents within 1 business day of receipt and continually update the site with information learned from the investigation. OCABR also will be helping affected residents file public records requests to obtain the notices that organizations that experienced the breach have filed with the Attorney General and OCABR.

A number of the updates to the Massachusetts data breach notification law are not the typical changes we see made in many other states – e.g., expanding the definition of personal information, establishing a set number of days by which notice must be provided. Some of the changes seem intent on drawing attention to organizations that had a breach and their related companies (posting of OCABR website, helping affected residents get more information about the breach, requiring the name of parent companies be listed in the notice, etc.) and pushing for greater enforcement of data security safeguards (requiring reporting on whether a WISP is maintained). Organizations will need to revisit their overall incident response plans, as well as confirm their compliance with the state’s data security mandate, now nine years old.

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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.