You are sitting at your desk and receive a call from a client who tells you that an unencrypted laptop computer with sensitive customer data was stolen from an employee during a trade show chock full of competitors. Another frantic call comes in from a client who has learned that a brand-new HR assistant accidentally emailed the company’s employees’ names and Social Security numbers to every email address in the company database. These types of calls are becoming more common in this era of electronic communications, laptops, iPads, iPhones, flash drives and mobile network access. What do these clients need to do? Among other steps and considerations, you should counsel your clients regarding California’s Data Breach Notification statute, commonly referred to as SB 1386, as codified in California Civil Code §1798.24, et seq.
If your client does business in California, and maintains computerized personal information of state residents, then you and your client should be cognizant of SB 1386 data breach notification obligations. Failure to comply with the notification obligations can subject a client to significant statutory penalties and civil liability. What you ultimately recommend and the steps your client might take may involve a cost-benefit analysis, but being familiar with the requirements of SB 1386, so you can be conversant regarding these issues and your client able to make an informed decision, is critical.
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