When we think about protecting customer and employee data, we often think that the biggest hazards are outside hackers.

But a recently publicized incident involving AT&T shows that the threats may also be from within. As The New York Times reported:

“[I]t serves as a cautionary tale about the types of information that employees at technology and communications companies can retrieve just by breaking the rules, no hacking required.”

What happened? According to the Times, “AT&T, the telecommunications provider, said on Monday that it had fired an employee who inappropriately gained access to customer information this year, possibly including Social Security and driver’s license numbers.”

While the breach was relatively small (1600 people affected), the company dealt with the breach by sending out letters to those affected and paying for credit monitoring services.

What else should you do in a breach? Well, next week, I’m heading up a major Data Privacy & Cybersecurity Summit where we will discuss exactly that topic — particularly as it applies to employee data. The summit is scheduled for October 16th in Cromwell.  Co-sponsored with the Connecticut chapter of SHRM, the program includes speakers from GE, ESPN and the Connecticut Attorney General’s office.  The cost is just $75 and includes breakfast, lunch and materials.  You can register here.

For more details, click here. 

 

A few weeks ago, I indicated (in posts here and here) that the AT&T Mobility v. Concepcion case would have a huge impact on forcing arbitrations of employment matters and limiting class actions.

An important new federal District Court case in Connecticut decided yesterday, D’Antuono v. Service Road Corp., (download here) has shown that to be the case exactly.

But, coming from the school of “you can’t make this stuff up”, it is remarkable that the case that is deciding this issue is one grounded in the claims of “exotic dancers” who allege that they were misclassified as independent contractors instead of employees.

(How can the strip club claim that the individuals were independent contractors? While it is not relevant to the court’s decision here, the dancers signed “leases” to the “performance space”.  Within those leases were arbitration provisions.  The Court did not decide that issue, though if you’re interested, I discussed a similar case back in January here. )

What is important for all employers to know is that here, the central issue in this case was whether the agreement to arbitrate (found in a lease agreement between the exotic dancer (as “tenant”) and the strip club (as “landlord”) was enforceable. The Court said that it was. In doing so, the Court forced the plaintiffs to arbitrate their FLSA claims and remove the specter of a collection action, finding that the plaintiffs gave up that right in their case.

Continue Reading In Titillating Case, Court Compels Strip Club Dancers to Engage Individually …in Arbitration

Now that the dust has settled a bit, it’s time to look at the long-term impact of last month’s Supreme Court decision in AT&T v. Concepcion for employment matters.  (For a great analysis of the decision itself, see this SCOTUSblog post.) 

All the analysis that has been coming out seems to suggest that there are two main areas that seem ripe for adoption in the employment arena.  

First, employers may want to use it as a preemptive strike against potential class actions by employees (such as suits challenging the exempt/non-exempt classification).  How? By including a waiver of class claims in employment arbitration agreements. 

Easy enough, right? Not exactly.  Employers will still want to be sure that the arbitration process that they are pushing employees into is procedurally and substantively fair. The best post-AT&T Mobility analysis I’ve seen that discusses this even further has been this excellent post in Lexology.  

But besides being used for current employees, employers may want to consider adding provisions in their settlement agreements of wage & hour class actions as well.  Employers who have been through those suits know that a settlement for past actions typically doesn’t prohibit lawsuits in the future for events that haven’t yet occurred. 

By including a provision that prevents settling class members from starting a class action in the future, the employer buys a bit of protection.  (And for those concerned that such a provision may fall through, the employer could still include a liquidated damages provision if the employee joins the class action.)  

Of course, adopting the Supreme Court’s case isn’t a slam dunk for all employers. For example, by eliminating class actions, is the employer able (or ready) to face numerous individual arbitrations across the country? And is the employer ready to pay costs and attorneys fees as these types of arbitrations may require? 

At the very least, however, all employers should consider discussing the case with their trusted advisor or attorney to determine if an arbitration and class action waiver provision is appropriate.

The U.S. Supreme Court, in a 5-4 decision,  yesterday held that the Federal Arbitration Act preempts state laws that discuss or limit arbitration agreements on the availability of class action arbitration procedures. 

The case, AT&T Mobility v. Concepcion (download here) isn’t an employment law case (it concerns whether AT&T should have charged consumers sales tax on supposedly "free" cell phones. But in so holding, the Supreme Court has opened the door wide that make arbitration agreements an important consideration for employers.

The Employment Class Action blog has a detailed summary of the case and its impact here:

The importance of this decision cannot be overemphasized and will likely be a topic of discussion for months or years. At its most basic level, the Concepcion case means that an employer can avoid class actions by providing for arbitration of employment claims and limiting arbitration to the resolution of claims on an individual basis. The decision also appears to limit other court-made restrictions to arbitration and my make arbitration overall a much more favorable alternative for employers trying to control their litigation costs.

The Bottom Line: The Supreme Court has now recognized that employers can avoid class actions through their arbitration agreements. Expect much more from courts, commentators, and Congress over this issue.

For employers, this decision at a minimum means that employers should revisit the topic internally. Is this a practice you want your company to follow? If so, how will you go about creating procedures and policies to meet this? 

It could be a very busy spring and summer for employers and their attorneys. 

For more background, see also this post by Michael Fox of Jottings by Employer’s Lawyer.

UPDATED 5/19/09

The U.S. Supreme Court has been very busy this morning.

First, in a 7-2 decision, the Court held that an employer (inthis case AT&T) did not violate the Pregnancy Discrimination Act when it gave less retirement credit for pregnancy leaves that occurred prior to the passage of the act. 

In addition, the Court found that because the company’s pension payments were in accord with a bona fide senior seniority system, they were insulated from challenge under Title VII.  

You can read the court’s decision in AT&T v. Hulteen here (including an interesting dissent by the Court’s only female Justice, Justice Ginsburg.

The Workplace Prof blog did a good job at recapping oral argument several months back and predicting a fact-based decision.  Ultimately, I think the decision is a bit of a surprise, particularly because it was not a close vote. 

For employers who have long-standing pension plans, the decision provides some much needed clarity on what laws should apply for long-serving employees and whether the PDA applied retroactively.  However, this decision is not going to have much impact for most employers because changes to the law in 1978 now require employers to treat pregnancy-related absences the same as other medically-related conditions. 

In other business, the U.S. Supreme Court solicited the views of the U.S. government in the case of Lewis v. City of Chicago to decide the following question:

Where an employer adopts an employment practice that discriminates against African Americans in violation of Title VII’s disparate impact provision, must a plaintiff file an EEOC charge within 300 days after the announcement of the practice, or may a plaintiff file a charge within 300 days after the employer’s use of the discriminatory practice?

(Note: An earlier version of this post suggested that the court granted certiorari in the Lewis matter; that has been corrected.)

(H/T SCOTUSblog)