BYOD: Has Your Company Addressed Its Privacy and Data Security Risks?

By Cameron G. Shilling

(co-authored by: Colleen Karpinsky Cone, VP Talent & Culture, DYN)

As published in ACC Docket (October 2015)

Bring your own device, or BYOD, presents significant privacy and data security risks to companies. To reduce these risks, businesses should implement appropriate written data security and information use policies and procedures, before a disaster occurs.

BYOD appeals to both companies and their employees. Employees prefer to select the type of mobile device they want to use for business and personal purposes. Companies use BYOD to avoid some or all the costs of purchasing and supporting mobile devices for employees, and to simplify the processes when hiring employees and when employees depart.

When an employee uses a personal device to perform work and access the data systems of the company, valuable business information accumulates on the device. The presence of that data on the device is a security risk if the device is lost, stolen, or compromised, and privacy concerns can arise if the company needs to access the device to recover its data. These issues should be properly addressed in written data security and information use policies.

Several state and federal laws require companies to implement security measures to safeguard sensitive information. The Massachusetts and California data security laws and the Health Insurance Portability and Accountability Act, or HIPAA, are good examples. These laws require encryption of ‘data in motion’, such as data transported on mobile devices, laptops, and USB drives, and data transmitted electronically by email and in other ways. BYOD companies often do not encrypt data in motion on employee-owned mobile devices, and devastating data breaches have resulted from the loss, theft, and compromise of such devices.

Mobile device management, or MDM, is currently a good technology solution for encryption of business data on personal devices. MDM is not only generally commercially available and technologically viable, it also provides companies with other benefits, such as the ability to monitor an employee’s remote business activities, and to remotely erase company data from lost and stolen devices and from the devices of departing employees.

Encryption technology also is readily available for laptops and business email systems; dual authentication virtual private networks, or VPNs, provide employees with encrypted access to company systems from offsite; and secure portals and similar technologies can be implemented for the encrypted transmission of large amounts of data. In short, encrypting sensitive data on personal mobile devices and during data transmission, like email, is no longer optional under data security laws.

Privacy concerns with personal devices present equally serious issues. The company data that accumulates on such devices mixes with personal data of the employee. Because the employee owns the device, the company does not have unfettered access to its data on the device, particularly for disgruntled and departed employees, and even cooperative employees can have legitimate concerns about handing over their personal devices to corporate officials. Also, the company has little (if any) control over apps that employees download to their personal mobile devices, and malicious apps pose threats to company data on the device and can provide access through the device to company servers and other data stores.

In addition to these difficult personnel issues, recovering business data from a personal mobile device can be a legal minefield. An unauthorized interception of an electronic communication, such as an email or text sent to a personal email account or cellphone number connected to the device, can violate the federal Electronic Privacy Communications Act. Likewise, unauthorized access to stored electronic communications, such as an employee’s Facebook, LinkedIn, or other social media account, can violate the Stored Communications Act.

Beyond those two federal statutes, an employee also may assert a common law claim that the company’s intrusion into the employee’s personal device violates the employee’s legitimate expectation of privacy. In 2014, the U.S. Supreme Court recognized in Riley v. California that, as a society, we have developed a strong sense that the data on our personal mobile devices is private. The Court explained its reasoning as follows:

Modern cell phones are not just another technological convenience. With all they contain and all they may reveal, they hold for many Americans ‘the privacies of life’ …. The fact that technology now allows an individual to carry such information in his hand does not make the information any less worthy of the protection for which the Founders fought.

Sound information use policies and technology practices are the best solutions to avoid data privacy problems. A company should clearly notify its employees in its information use policy that the company owns its business data, and that employees cannot have any expectation of privacy with respect to their possession or use of it. A company also should notify its employees that the company has a right to access employee-owned devices to recover business data, and the company should establish parameters in its policy for doing so. And, company IT personnel need to be properly trained to avoid intentional and inadvertent violations of the federal statutes mentioned above when accessing personal devices.

BYOD is not likely to subside – if anything, its prevalence will increase. Companies that foster this practice should address the privacy and data security concerns of BYOD, by implementing appropriate written data security and information use policies and by adopting sound technology practices, like MDM and encryption.

Employee Communications with Attorney on Company Owned Accounts Are Not Privileged

By Cameron G. Shilling (originally published 10/18/2013)

Emails, texts and other communications that an employee has with an attorney using a company account may not be privileged, according to the most recent decision on the issue from a court in Delaware. That state has now joined a growing list of others (Arizona, California, Florida, Idaho, Illinois, New Jersey, New York, Oklahoma, Pennsylvania, Texas, Washington, and West Virginia) where courts have found that an employee waived privilege by communicating with an attorney on a company email account.  However, some courts distinguish between an employee’s communications on a company account, and communications on a personal account using a company electronic device. Thus, a company should ensure  that its technology use policy covers both company accounts and devices, and that the company can permissible review communications between an employee and attorney before doing so.

 The Delaware court adopted a well-recognized four-part test to determine if an employee waived privilege by using a company account or device to communicate with an attorney:

  • Did the company have a policy informing employees that personal communications on company accounts or devices are not private?
  • Did the company monitor and review, or inform employees that it may monitor and review, such personal communications?
  • Did the company have a right and ability to access company accounts and devices?
  • Did the company notify employees, or was the employee otherwise aware, of the company’s policy?

In addition to the states listed above, courts in other states (including Connecticut, the District of Columbia, Maryland, Minnesota, and Kansas) have applied this four-part test, but found on the facts of the particular case that the company did not satisfy each element of the test, and thus that the employee did not waive privilege.

While courts are relatively settled on applying that test to company accounts, there is a split of authority concerning a company’s right to review an employee’s communications with an attorney using a personal account accessed on a company device.  For example, an employee may communicate with an attorney on a webmail account (such as Gmail or Yahoo!) using a company computer, laptop, tablet (e.g., iPad), or smartphone (e.g., iPhone, Droid or Blackberry).  The company may be able to recover such communications from the device if the webmail account was configured to create a backup file on the device, or if the webmail data can be forensically extracted from the “residual” space of the hard drive.

Courts in three states (New Jersey, Massachusetts, and Washington) found that such webmail communications remain privileged.  Two other courts (New York and Washington) disagreed.  They found that, while the differences between a company email account and a personal webmail account accessed on a company device may affect the outcome under the four-part test, the test still should be applied to determine whether the employee waived privilege.

An employee’s communications on company accounts and devices (including with attorneys) can be a treasure trove of valuable evidence.  To ensure that the company has the best possible right to review such communications, it should adopt a technology use policy that appropriately informs employees that all data created, stored, sent or received on a company account or device is the property of the company, and may be monitored and reviewed by the company at any time and for any reason, and therefore that employees cannot expect any such data to be private or confidential from the company.  The policy should be sent to all employees, and each employee should acknowledge that he or she received, reviewed, and will comply with it.  Companies should behave in accordance with the policy, and refrain from doing anything that may lead an employee to expect privacy with respect to such data.  Finally, when a company encounters employee communications with an attorney on a company account or device, it should ensure that it has the right under applicable law to review such communications before doing so.