HR Specialist: Pennslyvania Employment Law

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by Jonathan Kane, Pepper Hamilton LLP

A lost laptop containing the Social Security numbers of more than 50,000 people. A misplaced disk that contains account information for an entire state. Vital trade secrets and product formulas sold to a company’s chief rival.

Potential security threats like these are the stuff of HR directors’ nightmares. Each example has one thing in common: Employees’ actions—whether by mistake, negligence or outright theft—led to the loss of vital information.

Your company’s greatest security threat probably comes not from outside sources but from your own employees.

To protect against such internal threats and loss of information, you need to take specific measures to reduce potential risks. Just checking an employee’s background is not enough. You also need to establish and enforce confidentiality policies and contracts, and ensure that those policies can change with advancing technology. In addition, establishing good employee morale can help prevent some security threats.

Detecting the problem

In today’s computer-driven world, information technology specialists and accounting employees have access to many of a company’s most vital records and information. Other risks stem from employees habitually taking computers or other confidential work to locations outside the office. Still other threats lurk in the form of employees who have problems with gambling, alcohol or drug addictions, or massive personal debt. (See box below.)

Diminishing the threat

Employers can diminish possible security breaches by taking concrete steps such as these:

• Conduct background checks. Before hiring someone, companies should conduct an employee screening that includes prior references, a criminal background check and a credit check. Although the screening will not necessarily pick up bad behaviors, it will give the employer a better understanding of the person it is hiring. Always check with counsel if the background check reveals a criminal history. Some states, including Pennsylvania, restrict an employer’s option not to hire an applicant based on his or her criminal history.
• Establish a social contract. The social contract between an employer and an employee is quickly deteriorating. People are not as loyal to their employers as they once were. More important, employees do not feel as valued and appreciated as they once did. To establish a loyal work force, pay more attention to the way the company treats employees on a daily basis. It goes a long way toward boosting employee morale, an important factor in diminishing security threats.
• Make employees aware of confidentiality policies. Problems can arise in the transfer of trade secrets or other confidential information to someone outside the company. Inform employees of the company’s general confidentiality policies, especially with regard to e-mail. Often these clauses are buried in an employee handbook, even though they are essential to maintaining a company’s key assets. Make it a point to train employees on confidentiality policies. Send out policy reminders on a regular basis.

• Adapt company policies to new technologies. Stay informed as technology continues to evolve. Be prepared to adapt policies accordingly. Now that cell phones can take pictures and external hard drives can easily download a computer’s entire content, there are more ways to compromise a company’s sensitive information. 

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Jonathan Kane is a partner at Pepper Hamilton LLP (www.pepperlaw.com), a Philadelphia-based, multi-practice law firm with 450 lawyers in seven states and the District of Columbia. He is chairman of the firm’s Labor and Employment Group and can be contacted at (610) 640-7803 or kanej@pepperlaw.com.