The following is an excerpt from a long article which addresses several Federal Wiretap Act land mines in the corporate environment.
One vulnerability, not fully explored, is the potential for employee lawsuits based on electronic eavesdropping (authorized or not) which the company failed to protect the employee against.While not every employee can reasonably be expected to be a target of electronic surveillance, top executives and persons handling unusually valuable information could very well expect their employer to take reasonable security measures to protect them from being victimized.
One wiretap, undiscovered for just a day, could bring a judgment of $10,000.00, not to mention damages and attorneys' fees.
There are many other financial reasons quarterly Eavesdropping Detection Audits (TSCM) make good sense. The Federal Wiretap Act is just one of the reasons people don't think about very often.
via Philip Gordon, Corporate Counsel,
Once seen only in the shadows of the war against organized crime, the Federal Wiretap Act should now be moving steadily and rapidly toward the top of the corporate compliance checklist. Robust civil remedies, recent court decisions and technological developments have transformed the act's risk profile from a nonevent to a statute worthy of significant attention.
Although principally a criminal statute, the Federal Wiretap Act is unique among privacy laws in that it provides for substantial monetary damages without proof of actual harm.
Under the act, an aggrieved party can recover a minimum award of $10,000 or $100 per day of violation — whichever is greater, or, actual damages, plus punitive damages, attorneys' fees and costs. Comparing recent class action litigation involving security breaches with potential class actions involving the Federal Wiretap Act demonstrates the significantly pro-plaintiff aspect of this remedial scheme.
To date, the vast majority of security breach class actions have been dismissed, or resolved in the defendant's favor on summary judgment, because the plaintiff failed to plead or prove that the security breach at issue proximately caused any cognizable damage to class members.
By contrast, under the Federal Wiretap Act, proof that the violation proximately caused cognizable harm is unnecessary, and each individual plaintiff can recover a minimum of $10,000 even in the absence of actual damages. (more)
Although principally a criminal statute, the Federal Wiretap Act is unique among privacy laws in that it provides for substantial monetary damages without proof of actual harm.
Under the act, an aggrieved party can recover a minimum award of $10,000 or $100 per day of violation — whichever is greater, or, actual damages, plus punitive damages, attorneys' fees and costs. Comparing recent class action litigation involving security breaches with potential class actions involving the Federal Wiretap Act demonstrates the significantly pro-plaintiff aspect of this remedial scheme.
To date, the vast majority of security breach class actions have been dismissed, or resolved in the defendant's favor on summary judgment, because the plaintiff failed to plead or prove that the security breach at issue proximately caused any cognizable damage to class members.
By contrast, under the Federal Wiretap Act, proof that the violation proximately caused cognizable harm is unnecessary, and each individual plaintiff can recover a minimum of $10,000 even in the absence of actual damages. (more)
Philip L. Gordon is a shareholder in Littler Mendelson's Denver office, where he is the Chair of Littler's Privacy and Data Protection Practice Group.
