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data-protection-represents-forbidden-secured-and-wordcloud-266x300Have you thought about or bolstered your cybersecurity lately?

Because while government agencies, corporations and banks might be the top targets of would-be cyber attackers, small businesses need to make sure they’re protected, too, lest hackers succeed in their attempts to intrude and, in some form or fashion, monetize their information and data.

Such efforts start with educating yourself and your employees about malware and phishing attempts, ensuring that everyone knows not to open an attachment or click on a link—whether on their computer, phone or another device—if they don’t recognize the source.  You must regularly remind your employees and family never to open questionable emails or emails from an unknown source.   In particular, never open any attachments from people you don’t know or recognize.

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identity-fingerprint-represents-log-ins-and-brand-300x225The Biometric Information Privacy Act, which the Illinois legislature passed in 2008, has led to a barrage of class action lawsuits in the past six months. Thought to be the nation’s most stringent law protecting biometric identifiers—which include fingerprints, iris or face scans, and voice identification—BIPA has spurred about 30 such suits in Cook County alone.

Filed against employers such as gas stations, restaurants, and retail outlets, mostly stemming from employer time clocks that use fingerprint identification, the cases allege that businesses did not obtain proper informed consent from their employees, or did not maintain or inform employees about the company’s use, storage and destruction of biometric data, as required by the law. Some of the cases also claim the employer improperly shared with time clock vendors the biometric data, and some go so far as name these third parties as defendants.

These local cases follow on the heels of five class-action lawsuits that were filed in 2015, four against Facebook and one against Shutterfly, which allege that these social media companies used facial recognition software without asking for consent or following under procedural requirements under BIPA, which allows an “aggrieved” person to recover $1,000 for each negligent violation and $5,000 for each intentional or reckless violation.

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data-protection-represents-forbidden-secured-and-wordcloud-266x300Small business owners with customers based in the European Union will want to circle May 25 on their calendars. That’s the date that the EU’s General Data Protection Regulation (GDPR) goes into effect, significantly impacting enterprise cybersecurity and data governance policies and practices among organizations that handle data on EU citizens and residents.

In the U.S., businesses do not face an overarching data protection law—measures related to data protection are contained in various statutes and regulations, many of them at the state level, with California and Massachusetts, home to major tech companies, having probably the strictest requirements.

Stateside small businesses will need to continue to keep track of the patchwork quilt of U.S. laws and regulations while gearing up to become 100 percent compliant with GDPR, which means they need to begin implementing the necessary technologies yesterday.

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George Bellas business lawyerThe growth of e-commerce and the resulting physical distance between parties in various transactions, along with advances in technology more broadly, have helped lead to the rise of online dispute resolution, a digital offshoot of traditional alternative dispute resolution that provides greater efficiency and convenience to the parties involved.

While online dispute resolution does not necessarily arise from online transactions—and can be used in marital separations, property tax appeals, no-fault insurance claims and other types of cases—many believe it applies especially well to e-commerce given that it resides in the same jurisdiction, so to speak, of cyberspace.

A third-party mediator or arbitrator is still often involved in resolving such disputes, however, the process also includes a “fourth party” automated tool that can, for example, schedule meetings, organize information germane to the case, and tone down inflammatory language found in communications by blocking certain verbiage.

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George Bellas Business LawyerThe burgeoning science of biometrics both excites and unnerves people, the subject of both a razzle-dazzle upgrade in the new iPhone X and a growing body of privacy-related litigation in Illinois stemming from the 2008 passage of the Biometric Information Privacy Act.

That law requires companies using biometric data—which includes facial scans, fingerprints, iris scans and any other identification data except for a person’s name and demographics—to obtain a consumer’s consent to use the data, explain how it will be used, and tell them how long it will be retained. The consumer must sign a written release acknowledging this.

Companies and other organizations that violate the terms of that release can be and have been sued under the law, which is designed to protect individuals against the risk of identity theft in financial transactions and security screenings. Biometrics are considered a better security risk than even a Social Security number, since that can be changed; but they’re also a greater risk for individuals since they’re biologically unique and once compromised leave a person permanently vulnerable.

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Bellas-Business-Lawyer-300x194Should your small business be dealing in the online currencies (“cryptocurrencies”) like Bitcoin? What are they, anyway, and what are the risks and benefits?

Bitcoin is what’s known as a “cryptocurrency,” a digital coin that buyers and sellers of goods and services can use to undertake transactions over the Internet such as restaurant bills and tuition fees. Bitcoin is not the only such cryptocurrency—Ethereum is another example—but it’s probably the best known.

One acquire Bitcoins in one of several ways: as payment for goods or services, by purchasing them at a Bitcoin exchange, by exchanging them with a willing partner, and through what’s called competitive mining, which involves using special software to solve math problems. They are stored in one’s encrypted online “wallet” and transmitted via a “blockchain” when a transaction is consummated, assuming the price of the good or service does not exceed the buyer’s available balance. One can convert Bitcoins to cash if another party agrees to buy them.

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George Bellas Business LawyerIt’s the holiday season: time for small businesses to plan their annual parties and give employees a chance to celebrate, unwind and get to know one another better, right?

The correct answer is yes, but. But you need to make sure that employees understand they are still at a work-related function and certain behavior remains out of bounds. But if you are planning to serve alcohol, employees need to comprehend that’s no excuse for being sloppy drunk and obnoxious.

But if they are over-served, employees need to know that’s no excuse for sexual harassment–nor, in the age of #metoo, is anything else. It’s not only morally and ethically wrong but can result in a legally problematic morning after for not only the perpetrator but also your business.

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George Bellas Business Attorney
The Federal Communications Commission will vote December 14 on whether to repeal so-called “net neutrality” rules.  Those in favor of the current rules, established in 2015, say this would mean a playing field tilted toward those with money to pay Internet service providers for rapid content delivery speeds, giving them a fast lane to consumers’ desktops, tablets and phones.  What would that mean for small businesses?

The plan, put forth by current FCC Chairman Ajit Pai and supported in writing by the two other Republican appointees on the five-person commission—thus making its passage likely—would reverse the Obama era decision classifying Broadband Internet Access Service (BIAS) as a telecommunications service. Instead these providers—which include wired telephone companies, wireless carriers and cable television service providers—would be reclassified as offering information services.

The 2015 classification, which received a 3-2 affirmative vote in the then-Democratic-controlled FCC, was affirmed in June 2016 by the U.S. Courts of Appeals for the District of Columbia Circuit. In declaring broadband providers as telecommunications services, the FCC promulgated rules that stopped providers from blocking access to content and applications, slowing the speed with which users could access content, and charging fees to those willing to pay to have their content disseminated more rapidly.

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The new iPhone X uses facial recognition instead of a thumb print.  That is cool, right?ransomware-300x211

Not so fast.  Facial recognition software is just one of a group of metrics that is referred to biometrics, which includes facial scans, fingerprints and iris scans and all verification or identification data excluding the individual’s name and demographics.   And there are serious privacy concerns with the use of this biometric data.

What makes this more interesting is that Illinois has a very strict law about the use of this data.   The Illinois Biometric Information Privacy Act was adopted in 2008 and requires companies using biometric data to get the consumer’s consent to use the data and to explain how it will be used and how long the data will be retained.  And, it gives consumers the right to sue the companies for using the biometric data.   It is this penalty which is promoting a number of suits that have been filed in Illinois regarding the use of the biometric data.

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https://www.businessattorneychicago.com/files/2017/11/agreements11.1.17.jpg
Under a new Illinois law, non-compete agreements must be premised on a legitimate business interest and narrowly tailored in terms of time, activity, and place.  In addition, under the newly enacted Illinois Freedom to Work Act, employers are prohibited from entering into non-competes with employees who make less than $13/hour.

To prove the point, the Illinois Attorney General filed a suit in October against a payday loan company (Check Into Cash) because the employer required all store employees, including those making under $13 an hour, to agree to a one-year non-compete.  The suit alleges that the non-compete prohibits all store employees from working “directly or indirectly . . . as an employee, officer, consultant, or in any other capacity, for any individual, firm or entity, which provides deferred presentment, deferred deposit, and/or any other payday advance services, . . . and/or any other consumer lending services or https://www.businessattorneychicago.com/files/2017/11/11.1.17-1-300x150.jpgmoney services.”  The suit contends that the non-compete in question: (1) prohibits employees from working within 15 miles of any Check Into Cash location, not just the store the employee works in; (2) prohibits employees from working for any company that directly or indirectly provides consumer lending services, regardless of whether that company competes with Check Into Cash; (3) applies equally to all store employees, regardless of position or time spent with the company; and (4) applies to employees who make less than $13 an hour.  See: http://www.illinoisattorneygeneral.gov/pressroom/2017_10/20171025d.html

Employers should review their non-compete agreements to ensure compliance with Illinois law.  All restrictive covenants should: (1) be supported by adequate consideration; (2) narrowly tailored, in time, activity, and geography, to protect the employer’s legitimate business interests; and (3) not apply to low-wage employees as defined by the Freedom to Work Act.  If the employer is concerned about a low-wage employee’s exposure to trade secret information, they should also consider other means of protection, such as confidentiality agreements.

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