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Safeguarding Confidential Employee Records

By Seema Tendolkar and Samantha Ferris
April 28, 2006

The electronic age has increased numerous workplace efficiencies, the most significant of which are obtaining, storing, using and transferring data. Yet these benefits to data management have not come without burdens. Because information has become increasingly easy to obtain and transfer, employers must take precautionary measures to ensure that confidential data is adequately protected. This applies not just to proprietary business information, but also to confidential employee data. This article provides an overview of statutory, constitutional and common law concerns with respect to obtaining and maintaining confidential employee information, and penalties that employers may face for failing to protect the security of confidential employee records.

State Privacy Statutes

Many states have enacted laws requiring businesses that maintain computerized data including personal information to notify individuals of security breaches and unauthorized access to their personal information. (States with such security breach notification statutes include: Arkansas, California, Connecticut, Delaware, Florida, Illinois, Louisiana, Minnesota, Montana, North Carolina, North Dakota, Ohio, Pennsylvania, Rhode Island, Tennessee, Texas and Washington.) The California Security Breach Notification Act of 2003 (the California Act), Cal. Civ. Code '1798.80 et seq., was the first such law to be enacted, and precipitated similar statutes in sister states. The majority of state security breach notification statutes are modeled after the California Act. Accordingly, in order to provide a general overview of the landscape of this type of legislation, we outline the California Act while highlighting key differences in sister state statutes.

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