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Privacy Issues in the News - 2/10/2009

Greenebaum Doll & McDonald PLLC's Privacy Team is a multidisciplinary group formed to assist clients in understanding and complying with the increasing number of privacy and security laws and regulations being passed by state and federal government. Members from Greenebaum's Privacy Team bring knowledge from a broad range of practice areas including health care, insurance, employee benefits, labor, intellectual property, information technology, corporate, banking and finance, and education. 

The following is a summary of recent privacy issues in the news.  If you have questions regarding privacy law issues, please contact us.

In this issue:

Job Denial for Rx Use Discovered in Drug Screen Can Violate ADA

IRS Okays Sharing SSNs with Offshore Tax Preparers with Proper Security

Labor Department Issues Final SSN Rule

Jiangsu Internet Users Face Fines for Releasing Information

Ponemon Institute Studies Human Factor in Laptop Encryption


Job Denial for Rx Use Discovered in Drug Screen Can Violate ADA - Plaintiff (prospective senior VP of defendant bank) alleged violation of the ADA by denial of employment based on a pre-employment drug screen that revealed her use of a lawfully prescribed drug. The District Court for the Northern District of Illinois denied the bank's motion to dismiss, saying that an employer testing for illicit drugs may rely on the screen only to make employment decisions based on use of those illicit drugs. The court continued, "the [ADA] exemption for drug testing was not meant to provide a free peek into a prospective employee's medical history and the right to make employment decisions based on the unguided interpretation of that history alone." Further, the plaintiff had standing without having to allege that she was disabled or regarded as disabled. Companies conducting pre-employment drug screens should take care to use the results only for the stated purpose of denying employment based in illicit drug use. 

IRS Okays Sharing SSNs with Offshore Tax Preparers with Proper Security - The IRS published a final rule regarding disclosures of SSNs by U.S.-based tax preparers to offshore preparers. The rule maintains the IRS's prohibition of sharing SSNs with offshore preparers, even with the taxpayer's consent. However, the rule creates a limited exception where the U.S. preparer (i) secures consent, (ii) discloses the number through the use of an adequate data protection safeguard, and (iii) ensures that the offshore preparer has adequate data security measures in place. Be aware that there are numerous federal and state laws prohibiting or restricting the use and/or disclosure of SSNs, even where the SSN holder does not object.  

Labor Department Issues Final SSN Rule  - In December, DOL's Wage and Hour Division published its final rule governing the use of personal information on payroll statements contractors submit to federal agencies. While needing to ensure contractor payment of prevailing wages, DOL has become increasingly concerned with worker privacy as well as the government's need to reduce unnecessary collection and disclosures that increase the risk of identity theft. Under the new rule, contractors are no longer required to include workers' home addresses or full social security numbers on weekly certified payroll statements. Identification numbers are required, but these should be the last four digits of the social security number, not the entire number. Using redacted social security numbers for identification also minimizes contractors' exposure for workers' identity theft. Read more about the rule at 73 Fed. Reg. 77504, 12/19/08.  

Jiangsu Internet Users Face Fines for Releasing Information -Jiangsu is the first Chinese province to regulate online privacy. Violation of the new regulation, which prohibits the release of another individual's personal information, may result in a $731 fine and a six-month block of the violator's IP address. "Personal information" includes addresses, occupations, salary information - and women's ages. Other provinces are expected to issue similar regulations.  

Ponemon Institute Studies Human Factor in Laptop Encryption  - Key findings of the recent Ponemon study of encryption include: (i) 92% of IT security practitioners report that someone in their organization has had a laptop lost or stolen, with 71% reporting a resulting data breach; (ii) 57% of business managers record their passwords on a sticky note or similar to jog their memory or to share the password with someone else; and (iii) 56% of business managers have disengaged their laptop's encryption solution, 48% admitting this violates company policy. A lost or stolen laptop is the number one cause of data loss, and instituting reasonable security policies is not enough if the company's IT security practitioners are the only ones complying with them.

Even though the content of the above Greenebaum Doll & McDonald e-bulletin is primarily informative, state and federal law obligates us to inform you that this is an advertisement. You have received this advisory because you are a client or friend of the firm.

About Greenebaum Doll & McDonald PLLC
Greenebaum Doll & McDonald PLLC is a widely-respected business law firm with approximately 200 legal professionals in six offices, serving local, national and international clients in virtually every industry. A forward-thinking business law firm, Greenebaum is committed to the practice of Breakthrough Law®. For more information, visit

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