Law Requiring Confidentiality of Social Security Numbers Passed by CT Legislature

In an age of increasing identity theft, the State of Connecticut has become the second state (after Michigan) to pass a law requiring that all businesses and their employees safeguard and protect the confidentiality of social security numbers. In signing the new bill into law, Governor M. Jodi Rell, said that “[i]n our fast-paced world, it takes only moments for someone to steal an identity and commit significant, long-lasting damage to a credit record.” “This bill protects not just Social Security numbers, but any personal information,” continued the Governor. “The law requires anyone possessing such information to safeguard it, along with the computer files and documents containing it, and specifically mandates that businesses that collect Social Security numbers develop a privacy protection policy.”

The new law requires businesses to not only safeguard the personal information of their customers, but their employees as well. Although the law does not give individuals whose information is improperly divulged a right to file a lawsuit, it does provide for penalties and fines up to $500,000. A thoughtful description of the new law is set out in Daniel Schwartz’s Connecticut Employment Law Blog.

Federal agencies and their employees, like IRS agents, have long been prohibited from disclosing taxpayer’s financial information to third parties, pursuant to 26 U.S.C. 6103 and related laws and regulations. However, CT is only the second state to apply this prohibition to private citizens.

I recently counseled a client whose personal financial information was improperly disclosed by his employer to a group of his coworkers. While this client undoubtedly suffered embarassment and emotional injury due to his employer’s thoughtless actions, I had to advise him that he did not have a case. Unfortunately, New Jersey does not have a similar statute and common law claims such as invasion of privacy did not apply to his situation.

I strongly feel that Connecticut and Michigan have done the right thing by passing legislation requiring employers and businesses to maintain confidentiality of financial information. I would like to see our New Jersey legislators follow suit.