A lesson for employers: AT&T sued for alleged violations of the FLSA

AT&T and two of its subsidiaries have been hit by a class action lawsuit brought by approximately 5,000 of its employees who allege that AT&T violated the overtime pay requirements of the federal Fair Labor Standards Act (the “FLSA”). The employees are claiming an estimate $1 Billon in unpaid overtime and damages, stemming from a company-wide policy in which AT&T classified first-level managers as exempt from overtime pay requirements.

This case serves as an object lesson for employers of all sizes of the perils that can lie in the decisions surrounding how to compensate employees. Federal labor laws are complex and fraught with subtle distinctions and grey areas which can lead even companies with sophisticated HR departments and legal counsel into uncertain and perilous ground. The danger for many companies, particularly either smaller or struggling business, is that violations of the FSLA carries with it not only a requirement that the employer pay out any unpaid overtime pay, but a violating company is also subject to additional damages equal to the unpaid overtime, as well as the attorneys’ fees incurred by the employees in recovering the unpaid overtime.  This sort of “double damages” provision can be ruinous for business that already struggle with costs of doing business in a difficult economy.

Further complicating matters is the fact that, unlike many other federal employment laws, the FLSA applies to business of all sizes, ranging from companies with a single employee to ones with tens of thousands of employees.

Cases such as the AT&T case are good example of why it is vital for business, regardless of size or industry, understand how federal and state labor laws apply to it, and likewise ensure that their policies and practices are fully compliant. The cost of not doing so makes the relatively minimal expense of such an “ounce of prevention” far more attractive than either the “pound of cure” or, even worse, the cost of an adverse judgment.

Data Secutiy Laps Costs ChoicePoint $275,000 in Fines

In a further sign that the Federal Trade Commission ("FTC") is increasingly serious about regulation and enforcement of data privacy and data security regulations, ChoicePoint was fined $275,000 for a data breach that exposed the personal information of over 13,000 people.

According to a report by the Atlanta Business Chronical, the data breach occurred as a result of ChoicePoint failing to detect that it had deactivated a key security tool used to monitor access to one of its databases.

See the full Atlanta Business Chronical article: http://atlanta.bizjournals.com/atlanta/stories/2009/10/26/daily1.html

While traditionally regulation of data privacy and data security has been applicable to only key industries such as the financial, medical, and legal industries, more and more new regulations are coming into existence on both state and federal levels to draw in more and more businesses in widely varying industries. It is anticipated that new regulation could soon cover any business which accept credit cards for payment for goods and services, subjecting them to stringent data security requirements.

Given the rapidly changing regulatory landscape, it is becoming increasingly important for businesses of all sizes and types to carefully examine the data they handle and/or retain and come up with effective plans to deal with this data from not only a technology standpoint, but also from a legal and business-decision-making standpoint.

As always, an ounce of prevention....

 If you have questions, comments, or general thoughts on the implications and impact of data security and data privacy on businesses, feel free to chime in!

Data Security and Privacy Issues

It is becoming increasingly clear that data security and privacy-related issues will become a matter of concern for more and more businesses, as the states and federal government alike have begun to pass more and more laws and regulations regarding the handling of their clients' and customers' personal information.

States such as Massachusetts and Nevada are leading the charge by extending their laws and regulations regarding the handling of "personally identifiable information" to companies that handle the information of their citizens, even if the company is not located or  even does business within their borders.

Likewise the Federal Trade Commission is implementing more and more regulations and guidelines which will impact businesses in many different fields, ranging from financial institutions to retail stores, which will place very specific requirements on how companies must handle and protect their customers' data.

Businesses of all sizes need to be aware of these developing regulations and have a full understanding of how they may impact the way companies do business. More to the point, business of all types need to identify what sort of new and perhaps unexpected liabilities may now confront them in this changing, information-driven economy in which we now live.

Now more than ever, an ounce of prevention is worth a pound of cure.

Georgia Technology Law Institute today

Today is the 24th annual Technology Law Institute, sponsored by the Georgia Bar Association. We are participating in this event to gain new tools to enable our clients to better navigate the myriad of legal implications which our information economy is creating for businesses of all type. We are looking forward to bringing some of these new tools and perspectives to bear to give BC&S' clients one more "leg up" in our current, challenging business environment!