October 23, 2016

Is Your Organization About To Be Sued Because Your Website Is Inaccessible To People with Disabilities?

Is your organization about to be sued in a class action, or receive a demand from the Department of Justice, because its website or app is not accessible to people with disabilities?


Wheelchair symbol on keyboard key and image of computer keyboard
When the Americans with Disabilities Act was first drafted in 1988 (and adopted in 1990), it is unlikely that even a single member of Congress contemplated that it could be applied to the Internet.  The ADA (and specifically Title III) was applied to brick-and-mortar facilities and intended to ensure that disabled people could access and enjoy them.  Common examples are wheelchair ramps and braille menus. In the quarter-century since, almost everything that was once only brick-and-mortar now has a presence on the Internet.


One of the greatest ADA questions of our day is whether the ADA applies to websites, apps, and other online interfaces.  Only a few courts have addressed this issue, and the results have been mixed, and sometimes very fact-specific.   Courts must decide whether a given website is a "public accommodation" and, if so, whether the website operator has made "reasonable modifications" to make the website available to people with disabilities. 


One example of how websites can be more accessible is as follows:  If a website has an image that shows a product, that image can be "tagged" (or "alt tagged") with a clear written description of the image so that a visually-impaired person's "reader" program can read the description to the person (either audibly or in braille). 


The ADA is enforced by the U.S. Department of Justice (DOJ) and through private litigation.  The DOJ is reviewing organizations' websites to determine whether they comply with the law’s access requirements. In addition, a number of plaintiffs' law firms across the country are filing lawsuits alleging that organizations' websites are in violation of the ADA. Internet companies, including Netflixhave settled cases that alleged their websites were inaccessible to people with disabilities.


Several North Carolina companies have recently received demand letters from plaintiffs' law firms alleging that their websites are in violation of the ADA.  So far, these demands have not resulted in litigation, and some are still being addressed.


There are currently no specific federal standards for websites under the ADA. Since 2010, the DOJ has been telling us that it is in the process of developing regulations for website accessibility, but those standards are not expected until 2018 or later.  In the meantime, the DOJ says it expects organizations to make their websites accessible to the disabled.  The DOJ has indicated that it considers the Web Content Accessibility Guidelines (WCAG) [2.0 Level AA] to be satisfactory for the time being (and perhaps these standards go further than legally necessary), and many organizations have been working towards compliance with those standards on the assumption that any future DOJ standards will be consistent with them (although there are no promises). 


If your organization receives correspondence from the DOJ or a plaintiffs' law firm regarding website or app ADA issues, I strongly suggest you talk to a knowledgeable attorney immediately.




- MAC




Matt Cordell is a lawyer in the Research Triangle of North Carolina with significant experience in technology law, software development and license agreements, website development and license contracts, and e-commerce.  Matt Cordell is one of the best known lawyers in the region in the fields of privacy law and information security law.







October 16, 2016

HIPAA Privacy Officer and Security Officer: Too Much for One Person?

Perhaps your organization is becoming a HIPAA covered entity or a business associate for the first time, and you now understand that your organization will have to comply with HIPAA. One of your first, and most important, tasks will be to designate a Privacy Officer and Security Officer.  This post describes some considerations you should think through when making this decision.

One person or two?
The HIPAA Privacy Rule requires a privacy officer be designated and the HIPAA Security Rule each requires a security officer be designated.  It is legally permissible to have on person designated as both, or split the roles. You'll need to decide whether to combine or bifurcate these roles.  




First, you need to decide whether you have one person within your organization who has the capabilities required for both roles.  The Privacy Officer is responsible for understanding who is allowed to access protected health information (PHI), and will need to answer questions about practices, address requests for information, and handle training and monitoring of other staff. The Security Officer is primarily focused on protecting electronic protected health information (ePHI) from unauthorized access (e.g., meeting encryption requirements, etc.). If the person you would prefer to designate as the Privacy/Security Officer does not have an understanding of the technological aspects of protecting ePHI, there are two solutions: (a) designate someone with the technological understanding to be the Security Officer, or (b) instruct someone with the technological understanding (either inside or outside of the organization) to assist the Privacy/Security Officer.


What is most effective? The benefit of designating two officers is that each can be more specialized, and potentially more effective in their respective areas. However, the risk associated with having two officers is that things that are not clearly just privacy or just security might fall through the cracks if the two do not coordinate well.

What is most efficient? For administrative purposes, it's hard to argue that having one designated officer isn't substantially easier than having two. There is so much overlap in the two areas of responsibility that if you can have one person be responsible for both, it may avoid a lot of duplication of effort. Combining the roles is more common in smaller organizations.

All that said, there's no legally incorrect answer here. Just like the debate over whether a CEO should also be the Chairman of the Board, there are good arguments on either side, and the answer often boils down to the size of the organization and administrative ease.
 

Can (and should) an organization have more than one Privacy Officer or Security Officer?  Some organizations are both a HIPAA "covered entity" (e.g., healthcare provider or sponsor of an employee health plan) as well as a "business associate" (e.g., service provider to a covered entity). Those organizations will need to decide whether the Privacy and Security Officer(s) they designate for themselves as a covered entity should be the same person(s) designated for purposes of the protected health information they acquire as a business associate.  Generally speaking, an organization's obligations as a covered entity are similar to its obligations as a business associate. With the exception of contractual obligations in business associate agreements, the basic legal obligations are almost identical. (The Security Rule obligations to protect ePHI are basically identical. The Privacy Rule obligations are very, very similar.)  


Generally, I don't think there is a compelling reason to have separate Privacy Officers (or Security Officers) for these two capacities in which an organization might be acting, and I don't believe that is a common practice.  I think it is most efficient to have one Privacy Officer and Security Officer who is responsible in both contexts, and who understands the subtle differences in those contexts.  Organizations that find themselves acting as both a covered entity and a business associate should be aware of the distinctions, however, and should have policies and procedures that reflect those distinctions.  Here is one practical example:  Most employees should be shielded from access to PHI that is held by a plan sponsor of an employee benefit plan.  However, within the same organization, far more employees might have a legitimate need to access the PHI of in the capacity as a business associate of other organizations. 




Once you've made this important decision, you can begin building a HIPAA compliance policy and procedures around the basic structure you've chosen. (Let me know if you'd like some help with that.) - Matt





















YOU CAN READ MORE ABOUT THIS AND SIMILAR ISSUES ON MY OTHER BLOG: THE NORTH CAROLINA PRIVACY AND INFORMATION SECURITY LAW BLOG AT WWW.PRIVACYLAWNC.COM.






October 9, 2016

Customer Data: Asset or Liability (or Both)?

Customer data can be a treasure trove for an organization.  Many organizations believe customer and prospect data to be their most valuable asset.  Unfortunately, some have discovered that, unless handled with care, it can also be their greatest liability.




Organizations of all kinds collect, store, analyze, use, and share consumer data for myriad reasons.  Consumer data may help an organization maintain contact with a customer or prospective customer.  Properly analyzed, it can often predict customer behavior, allowing an organization to tailor its communications and offerings.  It can reveal patterns that help increase revenue, minimize expenses, and ultimately drive profitability.  Data can be leveraged and monetized by sharing with affiliated and non-affiliated entities.  Given the immense value of consumer data, it is no surprise that some of the most valuable companies in North Carolina and the world are data analytics firms.






Over the past few years, however, it has become widely acknowledged that such valuable data can also be a liability of the greatest magnitude.  The costs of the largest data security breaches have made headlines.  But these sensational headlines sometimes create the misleading impression that only large organizations incur massive costs, and that the losses are solely attributable to hackers.






The Risks, by the Numbers
One of the best sources of information about risks associated with consumer data is NetDiligence's annual study of "cyber insurance" policy claims.  Although the information is limited to incidents for which the targets had insurance coverage, and is limited to covered losses, it is still an excellent source of data.  The most recent study, covering claims data from 2012 to 2015, showed the average insurance claim amount was $673,767, with average legal fees of $434,354.






Smaller Organizations Face Increasing Risks
In the NetDiligence study, organizations were categorized by size (revenue), which provides some interesting insights.  The smallest organizations represented the largest raw number of incidents, probably due to the fact that there are simply more small organizations than there are large ones.  While the three smallest categories of organizations accounted for a combined 71% of the reported incidents in 2015, they were responsible for only 38% of records exposed.  It was surprising, however, that, according to NetDiligence, some of the largest claims came from smaller organizations.  This may be a result of the smaller organizations being less aware of their exposure or having fewer resources to provide data protection and security awareness training for employees.  By contrast, mid- and large-revenue organizations accounted for only 17% of incidents, but were responsible for 60% of the consumer records exposed.  This seems intuitive, because larger organizations would be expected to have more consumer records, on average, than smaller organizations.






Risks Are Spread Across Industries
The NetDiligence study also reveals a good deal about the source of recent risks.  While risks in prior years were concentrated in certain industries, they are becoming less concentrated year by year.  According to the study, recent losses were more evenly dispersed among business sectors, with healthcare reporting the most at 21% and financial services coming in second at 17%.  In other words, the categories of affected data resulting in the highest losses, from all industries, were health information and financial data, but the majority of losses were incurred outside of these two historically most targeted industries.






Vendors: The Weak Link?
Vendors are a common source of privacy and data security risk.  Vendors include service providers and others with access to an organization's data or systems.  In 2015, 25% of claims were attributable to vendors.  Of those claims, approximately half were hacking incidents, with the other half largely accidental or intentional disclosures.  Another interesting observation is that the vendor events exposed significantly more consumer records than events that occurred at the organization itself, indicating that failures by vendors may tend to be more systemic than failures at the level of the primary organization.






Healthcare providers and other HIPAA-covered entities, financial institutions, and defense contractors have long been required to extract certain contractual agreements requiring security protection from their vendors.  Following the breach of a Target vendor resulting in a massive theft of Target's customer data, organizations of all kinds began imposing contractual privacy, security and, importantly, indemnity terms on vendors, and these terms are sometimes heavily negotiated.






Data Use Violations: A Bigger Risk Than Breach?
Data-related liability in the context of nefarious hackers breaching security systems from foreign lands dominate the headlines, but much less dramatic circumstances lead to large numbers of significant incidents every year.  An analysis of what triggered the losses that gave rise to cyber liability claims in 2015 reveals that targeted security breaches are not the only source of loss.
There were many reported causes of claims, and while the most expensive were malicious hacking attacks, the second greatest cause was the wrongful collection of data—in other words, data use (or "privacy") claims.  Data use violations involve the intentional collection, storage, use, or sharing of consumer information in a way that violates the law, a contract, or an individual's right. 
Organizations and individuals throughout the United States are collecting, using, and sharing data in ways that expose them to liability, often without realizing it.  One of the most frequent violations involves collecting consumer information without consent, followed closely by using consumer information for purposes that were not consented to at the time of collection.




An Ounce of Prevention
Perhaps nowhere else is the axiom "an ounce of prevention is worth a pound of cure" more appropriate than in the context of the modern explosion in the collection and use of customer data.  Preventing a data security- or privacy-related loss involves more than just purchasing defensive technology.  According to reports, simply adopting and implementing good policies and procedures for correctly collecting, storing, using, and sharing data would have prevented a large portion of the reported losses.  Data governance policies and precures should be carefully crafted and followed, and should cover the following areas:
  • Document retention and data destruction
  • Consumer consent practices and electronic signatures
  • Payment card information
  • Employee email and telephone monitoring
  • Website and application monitoring and advertising
  • Email marketing
  • Telephone and text message marketing
  • Fax marketing
  • International consumers and international data transfers
  • Password administration and limited access
  • Background checks and credit reports
  • Identity theft and "red flags"
  • Employee and consumer health information
  • Educational records
  • Sharing customer information with affiliates
  • Sharing customer information with non-affiliates
The policies should address the following:
  • Designated categories of data based on sensitivity (low risk, high risk, etc.) and business necessity (critical, valuable, low-value, etc.); and,
  • Established guidelines for collecting, using, storing, and sharing various categories of data.


Telling the World
Organizations frequently publish privacy policy statements to inform their customers and others about their privacy practices.  Financial institutions, healthcare providers, and website operators are all required by law to make such statements publicly available.  Many organizations, unfortunately, misunderstand the purpose of this document.  A privacy policy statement is not the same as an internal policy or procedure; it is a public-facing disclosure that should be simple and flexible.
Organizations are often their own worst enemies in misconstruing the purpose of privacy statements.  They frequently draft and distribute privacy policy statements that include lofty language and make promises the organizations are not required to make, only to later fail to fulfill those unnecessary promises, thereby creating unnecessary liability.  Practices that do not live up to the statements made in a privacy policy statement are the number one source of Federal Trade Commission enforcement actions.  

Not If, But When
It is natural for an organization, just like an individual, to hope that it is immune from risks that others face.  If, however, the federal government, the United States military, and major multinational corporations are susceptible to major privacy and data security incidents, your organization probably is as well.  Therefore, it is most reasonable to think of a data security or privacy incident not in terms of "if," but rather "when."





Breaches and intentional, but unauthorized, data disclosure events trigger reporting obligations to federal and state officials, customers, and sometimes the media, and often result in regulatory enforcement actions and litigation (including class action lawsuits).  There are, however, steps that an organization can take to prepare for such unwelcome events and that can help mitigate resulting losses.  Two of the most important steps an organization can take are:
  • Purchase cyber insurance; and,
  • Adopt a breach response plan.
Cyber insurance is a term that refers to a category of insurance policies that transfer, in return for the payment of a premium, some of the financial risk of a data security incident to an insurance company.  Cyber insurance policies are not standardized, and they vary dramatically in the scope of coverage.  For example, the direct loss of funds from a hacked bank account is almost never covered by a cyber insurance policy, but many potential liabilities and defense costs can be covered.  It can be helpful to have the assistance of a knowledgeable attorney when evaluating cyber insurance coverage options.





Having an incident response plan in place is always a good idea.  Once an incident has occurred, the required timeframes for reporting the incident and mitigating any resulting harm can be very short (sometimes less than a week).  Having a plan in place, and a designated team ready to implement the plan, can make a tremendous improvement in your organization's response and potentially limit losses associated with the incident.  Additionally, incident response assistance (such as forensic computer expertise, call centers, printing and mailing services, and public relations) can be vetted and prices negotiated in advance, with potentially massive savings.






Ready or Not, It's Time
Complying with privacy laws, mitigating risks, and preparing for the possibility of a loss may seem daunting.  Given the scope and magnitude of the risks, however, it is simply a necessity in today's environment.  The task is manageable with some professional guidance, and the peace of mind that preparation can bring is well worth the effort.




YOU CAN READ MORE ABOUT THIS AND SIMILAR ISSUES ON MY OTHER BLOG: THE NORTH CAROLINA PRIVACY AND INFORMATION SECURITY LAW BLOG AT WWW.PRIVACYLAWNC.COM.












Matt Cordell is the leader of the Privacy and Information Security practice group at Ward and Smith, P.A., a full-service law firm with five offices and approximately 100 attorneys across North Carolina.  He is a Certified Information Privacy Professional (CIPP/US) and a member of the International Association of Privacy Professionals.  Matt is also the chair of the NC State Bar privacy and information security specialization exploratory committee. 










Matt Cordell has been frequently rated one of the best lawyers in North Carolina.  Data security lawyer in RTP.  Information security lawyer in Raleigh.  Best North Carolina business lawyer.