Presentation is loading. Please wait.

Presentation is loading. Please wait.

Legal Considerations: “Privacy & Security In the 21 st Century” Van Vleck Turner & Zaller LLP A T T O R N E Y S Counsel to California Employers RSA RESEARCH.

Similar presentations


Presentation on theme: "Legal Considerations: “Privacy & Security In the 21 st Century” Van Vleck Turner & Zaller LLP A T T O R N E Y S Counsel to California Employers RSA RESEARCH."— Presentation transcript:

1 Legal Considerations: “Privacy & Security In the 21 st Century” Van Vleck Turner & Zaller LLP A T T O R N E Y S Counsel to California Employers RSA RESEARCH SECURITY ADMINISTRATORS Presented by Brian F. Van Vleck

2 Van Vleck Turner & Zaller LLP

3 OVERVIEW I.The Dilemma of The Corporation In The Information Age II.Why Companies Must Investigate III.The Legal Limits on Corporate Investigations IV. Who Should Investigate? V.How To Investigate

4 THE DILEMMA OF THE ORPORATION IN THE INFORMATION AGE More threats to Corporate assets, information and people More threats to Corporate assets, information and people More legal duties to investigate More legal duties to investigate At the same time, more legal restrictions are being imposed on corporate investigations At the same time, more legal restrictions are being imposed on corporate investigations

5 HEWLETT-PACKARD: CASE STUDY OF AN INVESTIGATION GONE WRONG Criminal Complaint filed by California Attorney General against HP Chairwoman, Patricia Dunn, and HP's Chief Ethics Officer, Kevin Hunsaker Charges also filed against Ronald DeLia, the managing director of Security Outsourcing Services, the Company hired by HP and two of its private investigators

6 HEWLETT-PACKARD: CASE STUDY OF AN INVESTIGATION GONE WRONG (CONT.) The Criminal Complaint alleges counts for “fraudulent use of wire communications; wrongful use of computer data; and identity theft.” Violation of Penal Code sections 538.5, 530.5(a) and 502(c)(2) Together, all four counts carry a maximum prison sentence of three years and maximum fines of $55,000

7 WHY COMPANIES MUST INVESTIGATE Corporate officers have a fiduciary duty to shareholders to prevent waste, fraud and misappropriation of assets Corporate officers have a fiduciary duty to shareholders to prevent waste, fraud and misappropriation of assets To Protect Company’s Physical Property

8 WHY COMPANIES MUST INVESTIGATE (CONT.) In order to preserve legal trade secret status, a company must take all reasonable efforts to maintain the confidentiality of its proprietary information To Protect Company’s Intellectual Property

9 WHY COMPANIES MUST INVESTIGATE (CONT.) Labor Code Section 6301 requires California employers to maintain a “safe workplace” To Protect Company’s Workers and Customers

10 WHY COMPANIES MUST INVESTIGATE (CONT.) “A director’s obligation includes a duty to attempt in good faith to assure that a corporate information and reporting system” exists, which is “adequate to assure the board that appropriate information will come to its attention in a timely manner as a matter of ordinary operations.” “Flagrant organizational indifference” to misconduct is sufficient to establish corporate criminal intent To Comply with Fiduciary Duties and Sarbanes Oxley

11 WHY COMPANIES MUST INVESTIGATE (CONT.) The California Fair Employment and Housing Act (“FEHA”), requires an employer “to take all reasonable steps to prevent discrimination.” “Good cause” for terminating an employee due to misconduct requires a “reasoned conclusion... supported by substantial evidence gathered through an adequate investigation on a reasonable inquiry into the facts.” To Avoid Legal Liability

12 WHY COMPANIES MUST INVESTIGATE (CONT.) California’s “reasonably avoidable consequences doctrine” may cut off damages to any plaintiff who fails to utilize the company’s established complaint and investigation policy Failure to investigate employee misconduct may lead to vicarious liability or punitive damages based on alleged “ratification”

13 LEGAL LIMITS ON COMPANY INVESTIGATIONS Private Right of Action Private Right of Action Elements: Elements: (1) A legally protected privacy interest (2) A reasonable expectation of privacy in the circumstances and and (3) Conduct by defendant constituting a serious invasion of privacy Right of Privacy – California Constitution

14 LEGAL LIMITS ON COMPANY INVESTIGATIONS (CONT.) Balancing of Interests Defense Even where a significant privacy intrusion is found it may still be justified based on a “weighing” or “balancing” of the privacy interests against the employer justification. Consent Defense An employee’s knowing consent to the disclosure of private information is usually sufficient to remove any reasonable expectation of privacy and waive his or her privacy rights. Right of Privacy – California Constitution

15 LEGAL LIMITS ON COMPANY INVESTIGATIONS (CONT.) Job Applicants may be subjected to mandatory drug testing. Current employees may generally be tested only where the employer has a “reasonable suspicion” of drug use. Certain special categories of employees, such as security personnel and workers with a special impact on public safety may probably be subjected to random, suspicionless testing. DRUG TESTING

16 LEGAL LIMITS ON COMPANY INVESTIGATIONS (CONT.) To the extent that an employer has a policy putting employees on notice, there is no reasonable expectation of privacy in the use of employer-provided computers or in workplace communications. SEARCHING WORKPLACE , PHONE LOGS AND COMPUTER FILES

17 LEGAL LIMITS ON COMPANY INVESTIGATIONS (CONT.) Employees may have a reasonable expectation of privacy in various workspaces But this may be waived if employees are given prior notice of potential searches SEARCHING DESKS, LOCKERS, AND OTHER WORK SPACES

18 LEGAL LIMITS ON COMPANY INVESTIGATIONS (CONT.) Federal Omnibus Crime Control and Safe Streets Act of 1968, as amended by the Electronic Communications Privacy Act of 1986, establishes criminal and civil liability for illegally intercepting communications and for illegally accessing stored communications. (18 U.S.C. § 2500 et seq.). The California Privacy Act (“CPA”) also prohibits electronic “wiretapping” or “eavesdropping.” (Penal Code §§ ). Silent video surveillance is presumably not covered by state or federal statutes, but may violate privacy rights depending on time, place and manner of videotaping (e.g., in bathrooms or locker rooms). “WIRETAPPING”AND ELECTRONIC EAVESDROPPING

19 LEGAL LIMITS ON COMPANY INVESTIGATIONS (CONT.) Federal law permits recording of conversations when one of the parties consents to the recording. The California law imposes criminal and civil liability unless there is consent of all parties to the communication. The California Supreme Court has recently held that California’s law requiring consent of all parties applies whenever at least one of the parties is in California. “WIRETAPPING”AND ELECTRONIC EAVESDROPPING (Cont.)

20 LEGAL LIMITS ON COMPANY INVESTIGATIONS (CONT.) Federal Employee Polygraph Protection Act of 1988, prohibits employers from even requesting an employee to submit to lie detector test except based on reasonable suspension as part of an on-going investigation involving economic loss. Significantly, the definition of restricted “lie detector” tests is not limited to polygraphs, but includes any “voice stress analyzer,” “psychological stress analyzer,” or “any similar device (whether mechanical or electrical).” USE OF “LIE DETECTORS” OR POLYGRAPHS

21 LEGAL LIMITS ON COMPANY INVESTIGATIONS (CONT.) Extortion is defined as “the obtaining of property from another, with his consent, induced by the wrongful use of force or fear” The definition of “fear” includes threats of criminal prosecution Valuable information as “property” under the extortion statute? THREATS CONSTITUTING EXTORTION

22 LEGAL LIMITS ON COMPANY INVESTIGATIONS (CONT.) Wrongfully restricting the physical movement of an individual – for example, requiring a subject to remain in an interrogation room FALSE IMPRISONMENT

23 LEGAL LIMITS ON COMPANY INVESTIGATIONS (CONT.) Violation of federal law to take any letter “before it has been delivered to the person to whom it was directed” Application to mail delivered to employer’s business? INTERCEPTING U.S. MAIL

24 LEGAL LIMITS ON COMPANY INVESTIGATIONS (CONT.) “Obtaining Phone Records by false pretenses is prohibited by California Penal Code sections and 530.5(a). “Hacking” confidential computer files is prohibited by California Penal Code section 502(c)(2). Business & Professions Code et seq. generally prohibits any “illegal, unfair, or fraudulent” business practices Forthcoming FTC regulations and federal statutes will undoubtedly create new restrictions “PRETEXTING”

25 WHO SHOULD CONDUCT THE INVESTIGATION In-House Personnel? Outside Private Investigators? Outside Legal Counsel?

26 WHO SHOULD CONDUCT THE INVESTIGATION? Advantages More Knowledge of Company and facts Less expensive Disadvantages Perceived lack of objectivity Lack of legal or technical expertise Lack of privilege In-House Personnel

27 WHO SHOULD CONDUCT THE INVESTIGATION? Advantages Technical Expertise Lack of Company responsibility for methods and techniques Disadvantages More expensive Lack of company control over methods and techniques Outside Private Investigators

28 WHO SHOULD CONDUCT THE INVESTIGATION? Advantages Attorney-client privilege may protect investigation results from disclosure Knowledge of legal parameters on investigations Disadvantages Most expensive alternative Limitations on Ex Parte Contacts if Target is Represented by Counsel Outside Legal Counsel

29 WHO SHOULD CONDUCT THE INVESTIGATION? Outside counsel and outside investigators are independent contractors and not employees Company’s degree of responsibility for such agents may depend on the type of information sought and the extent of the Company’s knowledge, instructions and supervision Is Outsourcing A Defense To Improper Investigation Tactics?

30 WHO SHOULD CONDUCT THE INVESTIGATION? Depends on Type of Incident Being Investigated Depends on Type of Incident Being Investigated Typical In-House Investigation Typical In-House Investigation Interview the complainant first Interview the complainant first Give the accused fair notice and an opportunity to respond Give the accused fair notice and an opportunity to respond Written Report of findings and actions taken Written Report of findings and actions taken How Should A Typical Investigation Be Conducted?

31 Van Vleck Turner & Zaller LLP


Download ppt "Legal Considerations: “Privacy & Security In the 21 st Century” Van Vleck Turner & Zaller LLP A T T O R N E Y S Counsel to California Employers RSA RESEARCH."

Similar presentations


Ads by Google