In today’s digital age, data security is a critical concern for individuals, businesses, and governments alike. With the increasing use of technology, the risk of data breaches, unauthorized data access, and theft of sensitive information has become a major concern for organizations of all sizes.

At Bean, Kinney & Korman, we often advise clients on the legal protections and best practices for securing their data and minimizing the risks of data breaches. In this blog, we will discuss some of the risks of data security in a technological world, the technological safeguards that can help prevent data breaches, internal company policies that can reduce the risk of data breaches, and legal protections that are available to organizations to help them secure their data.

Risks of Data Security in a Technological World

One of the biggest risks to data security in an increasingly technological world is the potential for data breaches. This can occur when unauthorized individuals or groups gain access to sensitive information, either through hacking, theft, or other means. Data breaches can result in significant financial losses, damage to reputation and brand, and loss of customer trust.

In addition to data breaches, there is also a risk of unauthorized access to sensitive information by employees, contractors, or other third parties. This can occur through the theft or loss of electronic devices, such as laptops, smartphones, or USB drives, or through the intentional or accidental sharing of sensitive information.

Technological Safeguards to Prevent Data Breaches

There are a few readily available technological safeguards that organizations can use to help prevent data breaches and unauthorized access to sensitive information. These include:

1. Encryption: Encrypting sensitive information can help prevent unauthorized access, even if the information is stolen or lost.
2. Firewalls: Firewalls can help prevent unauthorized access to an organization’s network by blocking access from unauthorized sources.
3. Access Controls: Access controls can help prevent unauthorized access to sensitive information by requiring users to provide authentication, such as a password or biometric data, before accessing the information.
4. Data Loss Prevention (DLP) Systems: DLP systems can help prevent the accidental or intentional loss of sensitive information by detecting and blocking the transmission of such information.

Internal Company Policies to Prevent Data Breaches

In addition to technological safeguards, businesses and organizations can also implement internal policies to help minimize the risk of data breaches and unauthorized access to sensitive information. These policies can include:

1. Employee Training: Providing employees with training on the importance of data security and the steps they can take to protect sensitive information can help minimize the risk of data breaches.
2. Password Management: Requiring employees to use strong passwords and to regularly change them can help prevent unauthorized access to sensitive information.
3. Data Retention and Disposal: Implementing policies for the retention and disposal of sensitive information can help prevent the loss or theft of sensitive information.
4. Incident Response: Developing a plan for responding to data breaches and unauthorized access to sensitive information can help minimize the impact of such incidents.

Legal Protections

Employees, in particular departing employees, pose a significant risk to a business’ trade secrets and other intellectual property.

1. Policies: The employee manual embodies company policy. Its purpose is to establish and clearly communicate employee performance expectations. It is important to make sure the employee knows how to recognize confidential or trade secret material and understands how it is to be treated. Among the policies to be included should be a provision permitting inspection of personal electronic devices that are used on the job, to the extent permitted by federal and state law. If electronic devices are issued by the company, personal use should be prohibited, inspection permitted and terms of use clearly stated, again, within the restrictions imposed by federal and state laws.
2. Agreements: Because the employee manual is generally not deemed to be a contract, an employer’s remedies for violation will be limited. While the employee may face discipline, including up to termination upon violation, a confidentiality agreement can provide for specific contract remedies, such as injunctive relief and monetary damages, and provide for an award of attorneys’ fees. While such an agreement may be contained in an employment or independent contractor agreement, the better practice is a stand-alone agreement which can be separately enforced.
3. External Threats: In the course of many proposed business transactions, critical business information may be disclosed to third parties. Whether contemplating the sale or acquisition of business assets or equity, entertaining the prospect of obtaining third party investment, or offering an equity interest to a business associate, the disclosure of sensitive material is unavoidable. Be sure that all such disclosures are subject to a strict, fully endorsed non-disclosure agreement which includes a clear definition of the information to be kept confidential, an acknowledgment of your ownership of that information, definitive instructions for the return or destruction of the confidential materials, and effective remedies upon breach.

If you have questions or need any assistance concerning data risk management policies and protections, please contact Doug Taylor at (703) 525-4000 or rdougtaylor@beankinney.com.

This article is for informational purposes only and does not contain or convey legal advice. Consult a lawyer. Any views or opinions expressed herein are those of the authors and are not necessarily the views of any client.