Why does cybersecurity matter in employment law?

Companies often focus on preventing external cyberattacks, forgetting that internal threats can be more devastating.
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Employees can engage in corporate espionage by illegally accessing and sharing confidential company data. Examples include tax returns, names, addresses, social security numbers, and pay stubs. Such internal breaches can have various unwanted consequences. Disgruntled employees can sell proprietary information to competitors or bad actors who might use it for criminal activities.

How Lax Cybersecurity Systems Expose You to Internal Threats

Does your company have measures to detect sabotage attempts? Most perform routine checks while an employee is leaving to ensure they haven’t shared any confidential data. However, this could be too late if the organization has been steadily losing data for years.

While it’s mostly an external threat, social engineering only works by tricking employees into providing sensitive information. The ongoing BYOD (bring your own device) phenomenon also exposes your organization to potential attacks.

Because employees can carry their work home, it increases the likelihood of uninvited guests accessing your sensitive content. You can also lose data through the theft of company devices and accessories such as flash drives.

Do Cybersecurity Regulations Influence Employment Law?

Although there’s no single overarching law that guides cybersecurity matters, various regulations are applicable. One of them is the Computer Fraud and Abuse Act (CFAA). This federal law prohibits unauthorized access to computers holding national security, interstate, and foreign commerce data. Other relevant laws are:

  • Electronic Communications Protection Act (ECPA): This law protects sensitive data during transport or in storage. The Stored Communications Act of the ECPA prohibits unauthorized access to facilities that offer electronic communications services (ECS). The Wiretap Act also forbids the intentional interception of electronic communications while in transit.
  • The Cybersecurity Information Sharing Act (CISA): This law empowers organizations to monitor their network traffic and implement defensive measures. It also encourages private organizations to share sensitive cyberattack data with the government.

Some federal laws are sector-specific, such as the Gramm-Leach-Bliley Act (GLBA), which regulates financial institutions. It requires organizations to have written policies guaranteeing the privacy of customer data and protect against unauthorized access.

The Health Insurance Portability and Accountability Act (HIPAA) applies to the healthcare industry. The provisions include the protection of data held by particular covered businesses and associated entities.

In addition to federal laws, some states also have regulations to enforce cybersecurity measures. Examples are New York’s SHIELD Act and California’s Consumer Privacy Act.

Why Employers Should Prioritize Cybersecurity

In addition to consumer data, cybersecurity practices should also consider employee and organizational interests. These three aspects of data protection present business and legal risks for your company. A breach caused by employees could spell a PR disaster and existential threat if you lose consumer trust.

Customer-focused federal laws such as FACTA and FCRA may hold your business responsible if an internal data breach by rogue employees results in identity theft. The Consumer Finance Protection Bureau (CFPB) analyzes customer complaints and lawsuits as part of exam prioritization.

Risk prioritization is also a part of the process. A data breach significantly increases your company’s overall risk profile. Due to the ever-rising incidents of attacks, cybersecurity insurance is growing as one of the mitigation measures.

What Steps Should HR Managers Take to Reduce Internal Threats?

One of the most effective actions involves hiring an expert on employment to assist with your recruitment process. A licensed and competent lawyer will help an organization fulfill the need for skilled and ethical employees.

If you’re facing punishment for alleged involvement in an internal data breach, an experienced attorney can help you mount an appropriate defense. Other tips for enhancing cybersecurity are:

  • Create risk management policies for all employees, which should educate them on data security best practices. They should include monitoring personal devices used by remote employees.
  • Uphold employee privacy by informing them of the device and network monitoring details. It’s also advisable to have non-disclosure agreements and access levels for employees in sensitive roles.
  • Anticipate skill requirements to cope with the ever-evolving nature of cybersecurity challenges. This readiness involves assessing organizational preparedness and comparing it with individual competencies.

That undertaking requires close cooperation with various internal and external parties. In addition to an expert on employment, it incorporates the IT department, policy advisors, and trainers.

As an employee working in such sensitive environments, ensure you understand the legal implications of cybersecurity regulations. Don’t hesitate to contact your labor and employment lawyer if you have doubts about some policies.


When it comes to cybersecurity, you can’t afford to slack off. That’s because bad actors are always looking for loopholes to exploit. Whatever position you hold in the organization, you have a responsibility to prevent data breaches. In the unfortunate event that they occur, the law will offer you protection and justice. You’ll do a better job of handling the challenges if you remain on high alert.