Trends in Privacy Law for 2015

January 22, 2015

Privacy is back in 2015. Just when many observers were ready to declare privacy dead, consumers and businesspeople have developed new concerns about how information is being collected, sold, manipulated and even accessed by government agencies. The hacking scandals continued; Snapchat images, to the horror of many people, really do not disappear. And now the international community has become involved in the effort to protect consumers, as well.

Small to mid-size businesses need to keep a close eye on 5 developing privacy law trends this year. These include the consequences of data breach, the expanding definition of what private consumer information is entitled to legal protection and the increasing importance of international norms.

What is Private Information?

At the beginning of 2014, California rolled out amendments to its Online Privacy Protection Act that required commercial websites and online services to disclose whether they honored “Do Not Track” requests. Websites and online services were subject to the law if they collected consumers’ information that included:

  • first and last name,
  • physical address, including street name and name of a city or town,
  • e-mail address,
  • telephone number,
  • social security number or
  • any other information that would permit an individual to be contacted, either physically or online

The protection offered by the law is startlingly weak, but the list is expansive.  Ultimately, the comprehensive nature of list may be the most important feature. In some ways it mirrors the schedule of personal identifiers protected by the Health Insurance Portability and Accountability Act of 1996, which includes all these and another dozen factors.

Following California’s lead, other states have also begun to expand the kind of information that will be protected under privacy statutes. In mid-2014 Florida expanded its definition of “personally identifiable information,” disclosure of which would trigger its breach notification law. New York Attorney General Eric Schneiderman has just proposed adding protection of email addresses and passwords to New York’s breach notification law in an effort to craft the strongest privacy protections in the nation. Given the trend, it is reasonable to expect these larger lists of protected information to appear in more new statutes as they are enacted.

What Happens If There’s a Breach?

There are actually three areas to watch in the consequences department. The first relates to the notification requirement for individuals whose data may have been compromised.  The second is the apparent resurgence of class action lawsuits, and the third is the new enforcement activity on the part of the Federal Communications Commission and the Federal Trade Commission. None of this is good for businesses that lose control of customer information.

Breach Notification Requirements are Becoming More Complicated

Forty-seven states, D.C., Puerto Rico, Guam and the U.S. Virgin Islands now have data breach notification laws — nearly all political jurisdictions.

In California and New York, among other states, the laws require notification on the basis of where the customer lives, not where the corporation “resides” for legal purposes. This means that an interstate, tech-savvy enterprise will have to comply with the data breach notification laws of every state in which it has customers.

In addition, Massachusetts requires that companies have a written data security program, and in Florida a company must provide a copy of that program to the state attorney general when it notifies the state that it has suffered a data breach.

Bottom line: The burden of compliance with multiple state requirements is likely to increase in 2015.

Class Action Lawsuits

Here is where the difference between state enforcement and the plaintiff’s bar becomes important. State law enforcement tends to be about procedure. Civil actions tend to be about substance.

Class action lawsuits tend to be about whether personal data (whatever that includes) was adequately protected rather than the procedural issues of notice or disclosure.  Class actions are also generally understood to give individual consumers a fighting chance against the infinite litigation budgets of giant corporations.

Last year saw an increase in the number of class action suits that were brought on the basis of data breaches.  The suit against Target was perhaps the highest profile case, but other class actions or threatened class actions focused on Sony Pictures, eBay, Home Depot, and the Midwestern supermarket chain, Schnuck’s Markets, among others. This development gives an advantage to the consumer, can be devastating to a corporate defendant and shows no signs of abating.

FTC and FCC Enforcement Activity

FCC Action

In October 2014, the Federal Communications Commission brought its first enforcement action against TerraCom Inc. and YourTel America Inc. for failure to protect the data of more than 300,000 low income consumers.

Imagine living without a phone. These consumers were the most vulnerable people. They depended on limited low-cost phone service to build economic stability and protect them from physical danger. TerraCom Inc. and YourTel America Inc. allegedly stored their personally identifiable customer data online without firewalls, encryption or password protection.

The FCC’s action resulted in a $10 million fine. Travis LeBlanc, the FCC’s top enforcement official, has promised that although this was the first data security enforcement action by the FCC, it would not be the last.

FTC Enforcement Action

Public companies can also expect scrutiny from the Federal Trade Commission’s Bureau of Consumer Protection when consumer data is lost as the result of a data breach. The FTC is taking a proactive approach, also investigating companies on the basis of bad data management practices even before a breach occurs.

The interesting legal wrinkle in all of this involves a challenge to the FTC’s authority to monitor data security.  In 2012, the FTC filed suit against Wyndham Worldwide Corporation and three of its subsidiaries for alleged data security failures that led to three data breaches at Wyndham hotels in less than two years.

The FTC alleged that these failures led to fraudulent charges on consumers’ accounts, millions of dollars in fraud loss, and the export of hundreds of thousands of consumers’ payment card account information to an Internet domain address registered in Russia. Wyndham challenged the FTC’s jurisdiction to bring the action.

The action has wound its way through the court system for several years now, but in early 2014, U.S. District Judge Esther Salas in New Jersey upheld the Commission’s power to regulate corporate data security practices. The case is now on appeal to the U.S. Court of Appeals for the Third Circuit. It is a situation that bears watching, as it will define the FTC’s future sphere of action in the area of data breach.

International Trade Law

International trade law is a big driver of U.S. data security policy. Tech savvy businesses tend to have interstate and international clients.  As with the plaintiff’s bar, these actions focus on substance rather than procedure. The EU, in general, offers far greater privacy protections to consumers than U.S. law does.

The EU Privacy Directive, implemented through national legislation in the EU member states, restricts the transfer of personal information out of the EU to any country whose laws fail to offer adequate protection unless the company transferring the information is located in an adequate jurisdiction or falls under other exceptions. The U.S. does not make this list.

However, a safe harbor exists for companies located in the U.S.  The safe harbor requires the company to self-certify compliance with the EU Privacy Directive. but in doing so the company subjects itself to FTC scrutiny.

In 2014, the FTC, acting in furtherance of the EU Privacy Directive, brought 12 actions alleging businesses had falsely claimed to hold current certifications under this international framework. There is every reason to believe that safe harbor enforcement will continue in 2015.

Other cases have arisen outside the U.S.  In France, the French data protection authority warned Orange, the cellular phone company, after a security lapse led to a data breach involving 1.3 million users. The U.K. Information Commissioner’s Office fined the travel services company Think W3 Limited after a hacker stole  the credit and debit card details of more than 1 million customers.

After a period of realtive quiet, data privacy concerns show no sign of disappearing in 2015. Small and middle-sized business, who are often at the greatest risk of breach, will have a lot to follow as the law forms and develops through this and following years.

Among the hot spots to watch are the  multiple compliance requirements imposed by state laws, and the progress of class action lawsuits. The future is more likely to be shaped, however, by substantive federal enforcement action on the part of both the FCC and the FTC. Both agencies appear to be taking proactive roles to protect consumer information. Congress may also be spurred to take up legislation, as well.

The most important force, however, may be international conventions and norms.  As trade is globalized. these rules may shape the future of data protection in ways that are even more important than state or federal law.

Think you have your data privacy taken care of?


Anne Wallace is a New York lawyer who writes extensively on legal and business issues. She also teaches law and business writing at the college and professional level. Anne graduated from Fordham Law School and Wellesley College.

Get Business Legal Updates

Please provide your full name.
Please provide a valid email address.
We respect your privacy, and we will never share your information. Unsubscribe at any time.

Related Publications

Even before HIPAA, healthcare providers were generally obligated at a state level for certain levels of privacy protections for their patients. HIPAA compliance, though a significant part of risk management, has become well-engrained in everyone’s policies and procedures and training. However, since 2018, healthcare providers that meet the criteria are now forced to comply with…

June 8, 2021

Data Privacy and Cybersecurity have been buzzwords for a while, but became even more prevalent after the Cambridge Analytica scandal in 2018. What are your business obligations for data security or reporting in the event of a breach? Learn more in our article:

January 28, 2021

At this point, everyone has their data breach nightmare story. Perhaps you thought you could leave your laptop in the car and run into the store for just a second, but then came out to find the laptop gone and your window smashed. Maybe the business’ servers went down for a few hours, only to…

July 17, 2019

Nasir and Matt get into the story about a California woman who was fired for deleting an app on her phone that allowed her employer to track where she was at all times.

May 18, 2015

Nasir and Matt discuss the app that allows employees to post anonymous messages about their employers. They also talk about the legalities of banning gossip in the workplace.

January 26, 2015

It’s a truism that the law lurches awkwardly along behind technology. Nowhere is this more obvious than in the case of social media marketing strategies. Even if the financial benefits are hard to quantify, the advertising potential of the viral tweet/selfie/video featuring your product is just too good to pass up, especially given the relatively…

March 25, 2014
Legally Sound Smart Business cover art

Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
Apple Podcast badge
Google Podcast badge
Spotify Podcast badge

Latest Episodes

November 21, 2023

In this episode, Nasir Pasha and Matt Staub explore the legal implications of Artificial Intelligence in the business world. They delve into the most talked-about issue of 2023: AI and its impact on the legal landscape. Although AI isn’t necessarily a new topic, it has many unanswered questions in the legal world. Nasir and Matt…

July 12, 2023

In this episode, Attorney Nasir Pasha and Attorney Matt Staub delve deep into the complexities of mass layoffs and offer valuable insights, real-life examples, and practical advice to employers grappling with the aftermath of such challenging situations. Nasir and Matt emphasize the critical importance of effective communication when executing mass layoffs. They stress the need…

January 9, 2023

As the COVID-19 pandemic swept across the globe, businesses scrambled to adapt to the new reality it presented. In this blog post, we dive into the case of Goldman Sachs, a financial services giant, to examine their response to the crisis and the lessons other businesses can learn from their return-to-office strategy. From prioritizing employee…

October 28, 2022

Full Podcast Transcript NASIR: Finally, my two favorite worlds have collided – both the law and the chess – right here at Memorial Park in Houston, Texas. Windy day. We have some background noise – ambient noise. What are the two worlds that collided? Well, Hans Neimann has sued Magnus Carlsen for defamation in one…

September 26, 2022

Through a five-round championship bout, Matt travels to Texas from California to determine which state is better for business. Will it be a knockout with a clear winner or will it go to the scorecards?

July 7, 2022

Whether you are buying or selling a business, the transaction goes through the same steps. However, they are viewed from different perspectives. Sellers may not want to fully disclose all the blind spots while Buyers will want otherwise. Nasir and Matt battle it out in this Buyer vs. Seller to determine who has the advantage!…

May 12, 2022

When it comes to Restrictive Covenants, employers are fighting to keep their company safe while employees may use them to their advantage. Keep listening to find out if the Employer or the Employee wins this battle. Round 1: Trade Secrets A company’s trade secrets encompass a whole range of information and are one of the…

February 14, 2022

The Supreme Court rejected the nation’s vaccine mandate. Businesses with 100 or more employees are NOT required to have their employees vaccinated or go through weekly testings. However, this policy remains in effect for health care facilities. In this episode of Legally Sound | Smart Business, the team sat down to discuss their thoughts on this ruling.

December 1, 2021

In this episode of Legally Sound | Smart Business by Pasha Law PC, Nasir and Matt cover the Business of Healthcare. There is more to the healthcare industry than just doctors and nurses. Many Americans have health insurance to cover their yearly needs, but most Americans are not aware of what really goes on behind…

October 12, 2021

In our latest episode, Nasir and Matt are covering the legal issues on Social Media. The average person spends most of their day on social media, whether they are scrolling for hours or publishing their own content. However, just because you publish your own content on Instagram does not equate to you owning that image….

September 28, 2021

What is a Non-Disclosure Agreement, and when do I need one? In this episode, Nasir and Matt shares why you need to use Non-Disclosure Agreements, basic facts about NDA’s, and discuss about the infamous Jenner-Woods story. Having the right Non-Disclosure Agreement in place not only protects you and your business, but it also makes the…

June 16, 2021

Covered in this episode of Legally Sound Smart Business are some typical business mistakes blunders small businesses often make and how to avoid them. Blunder #1: Copying and pasting agreements It may sound like a good idea at the time, but this blunder comes with hidden pitfalls. Having an attorney draft terms that are specific…

February 4, 2021

How you terminate an employee can make the difference between a graceful transition to avoidable negative outcomes like a dramatic exit or even a lawsuit. We gathered a panel of experts and asked them – is there a “right way” to fire an employee? We would like to thank our guests for this episode: Amr…

December 2, 2020

The COVID-19 pandemic has turned nearly every aspect of life on its head, and that certainly holds true for the business world. In this episode, Matt and Nasir explain how the early days of the pandemic felt like the Wild West and how the shifting legal playing field left a lot open to interpretation and…

November 16, 2020

After plenty of ups and downs, our buyer has finally closed on the purchase of their business. While we’re marking this down in the ‘wins’ column, it never hurts to review the game tape. In this final episode, our hosts, Matt Staub and Nasir Pasha, return to the deal almost a year later to reflect…

September 15, 2020

The ink is drying on the signature line and things are looking great for our buyer. After so much hard work, the finish line is in sight and the cheering within ear shot.   Though the landlord is still serving friction, things seem safe to move forward and for now, our buyer will be keeping…

July 31, 2020

Though things are coming along well, the journey would not be interesting if it was purely smooth sailing. After our buyer opens escrow, they are forced to push the closing date back when suddenly a letter from an attorney was received claiming the business, we are buying has a trade mark on the name!  Now…

June 12, 2020

With frustration at an all-time high and professionalism at an all-time low, our friend the Buyer has “had it” with the Seller and quite frankly their lack of knowledge. At present our Buyer is rightfully concerned that the latest misstep from our loose-lipped Seller will threaten not only the entire operation of the businesses but…

May 11, 2020

As we go deeper into the buying process, we start to uncover more challenges from our seller and encounter some of the wrenches they are tossing our way. When we last left off in episode three our team was knee deep in due diligence for our buyer, had already penned and signed the Letter of…

April 4, 2020

One word–interloper! When a new mysterious broker enters the transaction and starts to kick up dust, Nasir and Matt take the reins. The seller signed off on the letter of intent (see episode 2), yet this “business broker” serves only friction and challenges by refusing to send financials, whilst demanding more of a firm commitment…

April 4, 2020

Just as most stories and deals start out, everyone is optimistic, idealistic and full of hope for clear skies. It’s a perfect outlook with a perfect setup for the ups and downs yet to come. Peek further behind the curtain and into the first steps of buying a business: the letter of intent. After the…

April 4, 2020

When a savvy buyer hears opportunity knocking to purchase a prime positioned business, she decides not to go it alone and taps in the professionals to help navigate what could potentially be a fruitful acquisition. “Behind the Buy” is a truly rare and exclusive peak into the actual process, dangers, pitfalls and achievements, that can…

August 7, 2019

GrubHub is subject to two “matters of controversy” that have likely become common knowledge to business owners: “fake” orders and unfriendly microsites.

May 28, 2019

In this podcast episode, Matt and Nasir breakdown the legal issues of the subscription industry’s business on the internet. Resources A good 50-state survey for data breach notifications as of July 2018. California Auto-Renewal Law (July 2018) Privacy Policies Law by State Why Users of Ashley Madison May Not Sue for Data Breach [e210] Ultimate…

March 12, 2019

In recording this episode’s topic on the business buying process, Matt’s metaphor, in comparing the process to getting married probably went too far, but they do resemble one another. Listen to the episode for legal advice on buying a business.

December 3, 2018

Nasir and Matt return to discuss the different options available to companies looking to raise funds through general solicitation and crowdfunding. They discuss the rules associated with the various offerings under SEC regulations and state laws, as well as more informal arrangements. The two also discuss the intriguing story about a couple who raised over…

July 24, 2018

Flight Sim Labs, a software add-on creator for flight simulators, stepped into a PR disaster and possibly some substantial legal issues when it allegedly included a Trojan horse of sorts as malware to combat pirating of its $100 Airbus A320 software. The hidden test.exe file triggered anti-virus software for good reason as it was actually…

April 17, 2018

Attorneys Matt Staub and Nasir Pasha examine Mark Zuckerberg’s congressional hearings about the state of Facebook. The two also discuss Cambridge Analytica and the series of events that led to the congressional hearings, the former and current versions of Facebook’s Terms of Service, and how businesses should be handling data privacy. Full Podcast Transcript NASIR:…

March 10, 2018

The Trump presidency has led to a major increase in ICE immigration enforcement. It’s critical for business owners to both comply with and know their rights when it comes to an ICE audit or raid. Nasir, Matt, and Pasha Law attorney Karen McConville discuss how businesses can prepare for potential ICE action and how to…

February 5, 2018

New years always bring new laws. Effective January 1, 2018, California has made general contractors jointly liable for the unpaid wages, fringe benefits, and other benefit payments of a subcontractor. Nasir and Matt discuss who the new law applies to and how this affects all tiers in the general contractor-subcontractor relationship. Click here to learn…

January 2, 2018

With a seemingly endless amount of new mattress options becoming available, it is unsurprising that the market has become increasingly aggressive. As companies invest in more innovative solutions to get in front of customers, review sites, blogs and YouTube videos have moved to the forefront of how customers are deciding on their mattresses and how…

December 7, 2017

In recent months explosive amounts of high profile allegations of sexual harassment, assault, and varying acts of inappropriate behavior have transcended every sector of our professional world. With a deluge from Hollywood and politics, and the private workforce, accusations have inundated our feeds and mass media. This harassment watershed has not only been felt within…

November 16, 2017

If you are not familiar with the EB-5 program started in 1990 to give green cards to certain qualified investors in the United States, then you may not have been alone a few years ago. Currently, the EB-5 program has since exploded since its inception and now hits its quotas consistently each year. The program…

October 10, 2017

Government requests come in multiple forms. They can come in as requests for client information or even in the form of investigating your company or your employees. Requests for Client Information General Rule to Follow Without understanding the nuances of criminal and constitutional law and having to cite Supreme Court cases, any government requests for…

August 24, 2017

Nasir and Matt suit up to talk about everything pertaining to employee dress codes. They discuss the Federal laws that govern many rules for employers, as well as state specific nuances in California and other states. The two also emphasize the difficulty in identifyingreligious expression in dress and appearance, how gender-related dress codes have evolved…

June 28, 2017

Nasir and Matt discuss the life cycle of a negative online review. They talk about how businesses should properly respond, how to determine if the review is defamatory, the options available to seek removal of the review, how to identify anonymous reviewers, whether businesses can require clients to agree not to write negative reviews, and…

June 7, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Mattbreak down social media marketing withguests Tyler Sickmeyer and Kyle Weberof Fidelitas Development. They first discuss contests and promotionsand talk about where social media promotions can go wrong,when businesses are actually running an illegal lottery, and the importance of a soundterms and conditions. Next, they…

April 3, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Matt go in depth with the subscription box business. They discuss where subscription box companies have gone wrong(4:30), the importance of a specifically tailored terms and conditions(6:30), how to structure return policies (11:45), product liability concerns (14:45),the offensive and defensive side of intellectual property (19:00),…

February 1, 2017

Nasir and Matt discuss the suit against Apple that resultedfrom a car crashed caused by the use of FaceTime while driving. They also discuss howforeseeable use of apps can increase liability for companies. Full Podcast Transcript NASIR: Hi and welcome to Legally Sound Smart Business! I’m Nasir Pasha. MATT: And I’m Matt Staub. Two attorneys…

January 5, 2017

The guys kick in the new year by first discussing Cinnabon’s portrayal of Carrie Fisher as Princess Leia soon after her death, as well as other gaffes involving Prince and David Bowie. They alsotalk about right of publicity claims companies could be held liable for based on using someone’s name or likeness for commercial gain.

December 22, 2016

Nasir and Matt discuss the recent incidentat a Victoria’s Secret store where the store manager kicked out all black women after one black woman was caught shoplifting. They then each present dueling steps businesses should take when employees are accused of harassment.

December 8, 2016

Nasir and Matt return to talk about the different types of clients that may have outstanding invoices and how businesses can convert unpaid bills to getting paid.

November 10, 2016

After a long break, Nasir and Matt are back to discuss a Milwaukee frozen custard stand that is now revising it’s English only policy for employees. The guys also discuss how similar policies could be grounds for discrimination and what employers can do to revise their policies.

October 6, 2016

The guys discuss the new California law that allows actors to request the removal of their date of birth and birthdays on their IMDB page and why they think the law won’t last. They also discuss how age discrimination claims arise for business owner.

September 29, 2016

Nasir and Matt discuss the racial discrimination claims surroundingAirbnb and how it’s handled the situation. They also discuss some practical tips for businesses experiencing similar issues.

September 8, 2016

Nasir and Matt discuss whyAmazon seller accounts are getting suspended and banned without notice and how business owners can rectify this situation through a Corrective Action Plan.

August 25, 2016

Nasir and Matt talk about the accusations surroundingfashion giant Zararipping off the designs of independent artists like Tuesday Bassen and howsmaller companies can battle the industry giants.

August 18, 2016

Nasir and Matt discuss Brave Software’s ad replacing technology that has caught the eye of almost every national newspaper and has a potential copyright infringement claim looming. They also welcome digital marketing expert Matt Michaelree to speak on the specifics of what Brave is attempting to do and whether it has the answers moving forward.

July 28, 2016

Nasir and Matt discuss the sexual harassment lawsuit filed by Gretchen Carlson against Fox CEO Roger Ailes. They also talk aboutthe importance of sexual harassment training and properly handling such allegations in the office.

July 15, 2016

Nasir and Matt talk about the changes at Starbucks that have led to many disgruntled employees and customers.

We represent businesses.
That’s all we do.

Oh, and we love it.

We love our work. We love reviewing that lease for your new location. We thrive on closing that acquisition that nearly fell through. We’re fulfilled when we structure a business to grow, raise capital, and be legally protected.

We focus on developing close relationships with our clients by being like business partners. A partner who provides essential, personalized, proactive legal support.

We do all of this without utilizing the traditional billable hour model. You pay for the value we bring, not the time spent on calls, emails, and meetings.

Our team is made up of attorneys and staff that share these values and we are retained by clients who want the same.

Pasha Law PC operates in the states of California, Illinois, New York, and Texas.

Meet Our Team

Fractional General Counsel Services

Pasha Law Select offers the expertise of a high-end general counsel legal team for every aspect of your business at a fixed monthly rate. Pasha Law Select is deliberately designed to allow our legal team to be proactive, to anticipate, and to be comprehensive in serving our clients. To be great lawyers, we need to know our clients. We can’t know our clients unless we represent a select number of clients in the long-term. This is Pasha Law Select.

Learn More