Assignment #3 Privacy Law

ASSIGNMENT 3 PRIVACY
LAW
Paul Robinson is the
Chief Compliance Officer for Lucid Marketing Company (Lucid), a prominent
company that specializes in streamlining business operations with marketing
strategies. Over the past year, Paul has made some questionable decisions at
work; decisions that may now cost him his job. He comes to your law firm
seeking counsel on what potential legal issues the company (or he) may face.
One year ago, the U.S.
government passed a law called the Do-Not-Email National Registry Act. The
Act was designed to prohibit commercial email solicitations to an individual
unless the business was able to obtain express written consent from the
individual to receive commercial email solicitations. The framework was
originally designed by the FTC, which reasoned that user privacy rights were at
issue and that consumers needed protection from harassing business email
solicitations. The FTC briefly considered an approach similar to the National
Do-Not-Call Registry, but it was quickly shot down when consumer advocate
groups began protesting the FTC for putting big business before the little
guy. The law will take effect one year from today.
Since Lucids primary
area of business is offering total marketing solutions to its business clients,
this law could potentially cripple the organization. Accordingly, Paul felt the
need to hire outside counsel to challenge the law. Last month, outside counsel
recently filed a complaint on Lucids behalf against the FTC. Legal bills
already total $100,000 and the proceedings have just started. It is estimated
that the total legal bill will be over $1 million dollars. Lucids Board of
Directors is very concerned with Pauls decision to challenge the law. They are
not sure if Lucid will be successful. They wanted to sell the company while it
still had value, but now they have no choice but to take their chances in
litigation since Paul blew through a good portion of their liquid assets on the
pending litigation.
One bright spot in
Lucids operation is their affiliated company, Lucid News (LN). Over the years,
Lucid has benefited greatly from having a sister relationship with LN. LN has
managed to provide a good spin to Lucids otherwise disastrous past year.
However, the State police authorities have been recently investigating LN for a
variety of alleged illegal activity, including fraud, money laundering and drug
trafficking. As Chief Compliance Officer for both operations, Paul was shocked
when State police authorities stormed LNs headquarters and ransacked it
searching for evidence of criminal activity. Paul was caught off guard largely
because the police supplied the search warrant five minutes before entering the
premises. Paul expected that the police would have issued a subpoena for all
the documents seized as part of the search. Paul argued that a subpoena would
have been more appropriate for what the police wanted to obtain. Some of the
evidence obtained indicated that LN had been collecting large sums of cash
(over $800,000) and depositing it in a local bank over a period of time. The
cash was deposited in ten even installments and left no paper trail.
Paul has also been
dealing with Human Resources over the past few months Lucids recent
implementation of a drug testing policy. One employee was discharged for
refusing to submit to a drug test after the employee learned that Lucid tested
for illegal drugs, legal prescription medication and diabetes. Paul had no
choice but to release the employee since Lucids Employee Handbook
specifically states that, as a condition of employment, Lucid may test for
illegal drugs, legal prescription medication and diabetes. In addition to
providing notice through the Employee Handbook, Lucid also sent out a
company-wide email notifying all employees of the new drug testing program.
Another employee was
discharged after Lucids information security team recorded an incoming call
from a client to the employee. The first ten minutes of the conversation was
spent discussing what types of services Lucids provides and obtaining general
pricing information. However, during the last five minutes of the conversation,
the caller began to flirt with the employee, even asking the employee out for a
drink after work. The employee was flattered, and agreed to skip out a few
minutes early so they could meet at a local pub. Lucids Employee Handbook
states that, as a condition of employment, all incoming and outgoing calls may
be monitored.
Instructions:

Your supervising
attorney asks you to prepare a memo discussing all potential
privacy-related issues in Pauls case. You are to advise your supervising
attorney on the likely outcome of each issue, citing appropriate authorities.

Format must be in IRAC Issue/ Rule/ Analysis/ Conclusion
A case make be citied in relation to the above case
dealing with privacy Law.

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