A Cost-Imposing Law that may Indirectly Save Millions

July 6, 2015

by Jay Marshall Wolman, CIPP/US

This past June, the Connecticut General Assembly enacted Public Law No. 15-142, ostensibly to improve data security in the state.  It follows on the heals of the Anthem Data Breach earlier this year.  The first major provision governs state contractors in receipt of confidential information received from the state.  The second major provision, addressed to Anthem and other health insurers, creates specific obligations to secure data under a regulatory scheme.  The third major provision addresses all other businesses.

Previously, reasonable notice of a data breach (release of certain unencrypted personal information) was required to be given.  A specific 90 day notice is now required.  More important is the remedy provision–in the event of a data breach, businesses (including health insurers), must implement identity theft prevention and/or mitigation services.  This also includes incidents where there is no actual proof of a data breach, only reasonable suspicion.  Normally, regulatory burdens such as these impose greater costs on the marketplace.  This may not be the case here.

Following Clapper v. Amnesty International, USA, most federal courts addressing standing (i.e. whether you can claim a right to sue) have found that the increased risk of injury from identity theft does not suffice to have been sufficiently injured to confer standing.  Novel theories to avoid this claim have included the costs of identity theft protection services incurred by breach victims.  This theory has been rejected at the trial court level.  See, e.g. In Re: Barnes & Noble Pin Pad Litigation.

Many companies experiencing a data breach automatically, for public relations reasons, offer identity theft protection services.  Thus, the formal obligation under law would not likely add significant cost.  And, assuming cases like the Barnes & Noble one were reversed on appeal, the claimants would no longer suffer the costs of such services, since the companies are now required (at least in Connecticut) to provide those identity theft services.  The practical effect will be that more consumer data theft class actions will likely be won on the defense of lack of subject matter jurisdiction (how a defense of lack of standing is brought).  With dismissal, there would be no settlement and no claim for millions of dollars in attorneys’ fees.  As a result, companies experiencing a breach (and their cyber insurers) would potentially save millions by doing what they already do, merely because the services are now required.

Of course, if increased regulation with a de jure cost burden has a de facto cost savings due to costs imposed by the court system, it may be time to take a closer look there as well.


The Expansion of Regarded-As Discrimination

June 17, 2015

by Jay Wolman

The Americans with Disabilities Act protects three categories of individuals:  those presently disabled, those previously disabled, and those perceived to be disabled.  The latter is deemed “regarded as”; it does not require the member of the protected class to actually have or have had a physical or mental impairment that substantially limits a major life activity.  This is the only statute explicitly providing for “regarded as” protection.  However, caselaw seems to be filling the gaps in other laws.

In Macy v Holder, the EEOC explicitly found that discrimination against transgendered individuals is unlawful under Title VII, discussing the difference between sex and gender.  It also reviewed cases finding that failure to conform to gender stereotype is actionable discrimination.  Of note, Title VII does not speak to gender.

Recently, in EEOC v Abercrombie & Fitch, the Supreme Court ruled that where an employer perceived that an employee might require a religious accommodation, even if that perception is wrong, and discriminates against the employee on the basis of that perception, such discrimination is unlawful under Title VII.  In that case, as you may recall, a Muslim job applicant was perceived to potentially need a modification of the dress policy, even though the employer disavowed actual knowledge of the need.  For all intents and purposes, it is now deemed unlawful to discriminate on the basis of being regarded as having a specific religious belief if the motive is then to deny a reasonable accommodation to that belief.

Taking it a further step is the case of Rachel Dolezal who regards herself as African American.  Let’s assume she is actually Caucasian.  If she applies for a job and is denied because she is perceived to be African American, does she have a claim?  She has not been discriminated against on the basis of her actual race.  However, she might have a claim based on color, as Title VII does cover both “race” and “color”.  But, she could lose if the employer replaces her with another bronzed or tanned Caucasian–“color” might not be sufficient.  Yet, expanding on Macy and cases cited therein, Ms. Dolezal may be viewed as not conforming to racial stereotype.  Thus, a white person, regarded as being black, might have an actionable claim.  And, if so, others may have actionable claims for not being white, black, asian, hispanic, or native american “enough“.


The Future of Restrictive Covenants in Settlements and Severance

June 5, 2015

by Jay Wolman

The law is ever changing and what is common may, at some point, become unlawful (or already is without folks realizing it).  Recent developments in statutory law and enforcement actions in existing law have really made me think about all of those clauses that commonly appear in agreements with former employees, whether as part of a severance agreement or as a settlement of claims.

For instance, many of these agreements include a confidentiality clause that prohibits the former or soon-to-be former employee from disclosing how much is being received in severance or settlement.  Many of these agreements contain new restrictions on the disclosure of trade secrets (or reaffirmations of prior such covenants), including personnel practices and wage scales.  Many of these agreements contain nondisparagement clauses prohibiting the employee from saying anything that might be deemed as negative against the employer.  Each of these may be or may soon be unlawful.

As noted by Connecticut attorney Dan Schwartz, the Connecticut legislature just passed a bill that prohibits employers from taking action that would bar an employee from disclosing his/her wages or that of another employee.  As noted therein, “wages” means “means compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation”.  Certainly, to the extent severance or settlement represents such compensation, the law could be read to make settlement/severance payments that were confidential now free and open.  It also would render inapplicable any trade secret clause that prohibits disclosure of a wage scale or other compensation basis.  In fact, in the situation where there was a confidential settlement, where the claimant employee settled for, perhaps, too little, and thus wanted confidentiality, another employee with knowledge might now be free to publicize the settlement amount.

But wait, you might ask, the law says “employee”, not “former employee”, so isn’t that inapposite?  Not necessarily.  In Robinson v. Shell Oil, that noted liberal Justice Clarence Thomas, writing for the Court, held that “employee” for Title VII purposes, included “former employee” in order to effectuate anti-retaliation policy.  Connecticut courts may follow this rationale, and other states may adopt similar legislation.

That said, some of these provisions may already be unlawful nationwide.  Last year, the EEOC challenged CVS severance provisions that, among others, included nondisparagement clauses and prohibitions on disclosing personnel information. CVS won, but on a technicality, not substantively.  And the NLRB has found success in the 5th Circuit in the Flex Frac Logistics case, where a ban on discussing “personnel information and documents” interfered with employee section 7 rights to discuss wages with coworkers and non-employees.  As a hypothetical, imagine that the former employee wants to get hired as a union organizer to organize the workforce of the employer–the nondisparagement, nondisclosure, confidentiality clauses of a severance or settlement would likely interfere with the ability to organize and would probably not survive.

These clauses are very common, but likely are not long for this world.  In the interim, employer counsel may want to rethink the standard severability clause.  Although employers are certainly keen on obtaining as much a release as possible, it may be time to reconsider whether the agreement should survive if the former employee can simply ignore these clauses.  This also might not bode well for former employees, as employers are apt to pay less in severance/settlement if the amount will be subject to public scrutiny.


If you ever wonder if being a lawyer is hard…. (City of Inglewood v. Teixeira)

June 3, 2015

Do you?

Are you a law student, worried that you might not pass the bar?

If you’re that worried, read this shit and remember that the idiot who filed this idiotic lawsuit is not only licensed, but has clients. See Inglewood, California Sues YouTube Critic For Copyright Infringement Over Use Of City Council Videos (here)

The City of Inglewood is suing the author of this youtube clip for copyright infringement. Come at me, bro. I’m re-publishing it. (wags dick at fucking idiot mayor of Inglewood)

Seriously, read this garbage. If you think you can’t make it as a lawyer, just remember that the author of that piece of shit has a bar license and managed to snag the City of Inglewood as a client.


Negotiation Theory in Action

May 30, 2015

Nevada Senate Bill 444 – Groundhog Day

May 27, 2015

On SB444 – Wynn Resorts’ lobbyist proposed a compromise. The compromise was reasonable. We might not have liked it, but there was no reason not to agree to the compromise.

The Senate did not agree to the compromise.

Now it is back to the Assembly. But, the Assembly has been a bipartisan body of reason on SB444.

How you can help stop SB444.

1. Go to this page.

2. Enter “SB444″ without any spaces or use the drop down menu and scroll aa.

3. Click the “Get Bill Information” button.

Make sure you comment on SB444 (not AB) and choose the April 14 version from the drop down menu.

Make sure you comment on SB444 (not AB) and choose the April 14 version from the drop down menu.

4. Type in your comments.

5. Enter your name and address, which is kept confidential.

6. Click submit.

What if you don’t want to post a comment using your real address?

No problem.

You can signal boost this article or any other articles on Twitter under the #SB444 or #StopSB444 hash tags.

Click here to go to Twitter to signal boost articles opposing censorship.

Even better – write to your assembly member or to Governor Sandoval

To write to your Assembly Member, follow these steps:

1. Find out who your assembly member is by using this interactive map.

2. Or look here – if you already know.

3. Write them an email or a letter about how you feel toward SB444

If you want a short tutorial on the different sides of this debate, watch below:

My Testimony

And this is the guy pushing to gut Nevada’s Anti-SLAPP law.

(Note, this is an edited version. My prior version was vituperative and immature, and I have edited it to remove those elements)


Il Soldato — Natale C. Misuraca

May 24, 2015

marcorandazza:

This is a re-run, but I watched a lot of re-runs with my grandfather, Natale. One of my favorite parts of doing so was how he would sit in silence, but then point out which actors in the movie were dead. And, he would laugh his ass off at any movie that had a monkey in it.

If Papa was a film critic, his only reviews would be how many monkeys were in it and if they were funny, and how many actors in it were dead. “The Papa Scale.”

Anyhow, this story has no monkeys, but the main character is, indeed, dead. So, as you start reading, point to his picture and say “ohhh, he’s dead.” That’s how he would have read it.

With that introduction, I bring you the Memorial Day rerun of “Il Soldato” – the story about my favorite war hero ever, Natale.

Originally posted on The Legal Satyricon:

Meeeeeee what handsome!!!! Pvt. Natale Misuraca Today being Memorial Day, I thought I’d write about my favorite war hero, my grandfather Natale Misuraca – or as we all knew him, “Papa.”

Natale Misuraca was born in Boston to immigrants from Terrasini, Sicily. Like most Terrasinese, his family wound up in Gloucester, Massachusetts—a town where they could replicate the fishing culture they left behind in Sicily.

Given how many Sicilians settled in Gloucester, they retained their distinct identity. In fact, despite born in the United States, my grandfather always spoke English as if it were his second language.

From what I know of his childhood, it wasn’t easy. He was one of 13 siblings, and the Great Depression was not kind to them. Although nobody ever starved to death, hunger knew their names, where they lived, and visited frequently. Gloucester being a fishing town, there was always some food available at the docks, and…

View original 2,171 more words


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