Data security is a crucial concern for businesses, especially in industries that deal with sensitive personal information. The Wakefern settlement is a recent example of how mishandling customer data can lead to severe consequences. In this blog post, we will explore the details of the Wakefern settlement, the allegations against the company, and the measures taken to ensure better data protection in the future.
About Wakefern
Wakefern is a cooperative that supplies and supports over 350 supermarkets, primarily ShopRite stores, across the Northeast. Many ShopRite locations have in-store pharmacies that collect and handle protected health information (PHI) from customers filling prescriptions.
Case Background
The case revolves around how Wakefern and two ShopRite pharmacies disposed of old electronic devices used to collect customer data without properly erasing the PHI from them first. This is a clear violation of the Health Insurance Portability and Accountability Act (HIPAA).
By failing to destroy the data before disposing of the devices, Wakefern exposed the private information of over 9,700 pharmacy customers. This included sensitive details like names, phone numbers, birthdates, drivers license numbers, and prescription information.
Allegations Against Wakefern
The New Jersey Attorney General alleged that Wakefern and the ShopRite pharmacies violated both HIPAA and the New Jersey Consumer Fraud Act through their mishandling of customer PHI.
Specifically, they failed in their duty to ensure that sensitive data was destroyed before disposing of the electronic devices that stored it. This put thousands of customers’ personal and medical information at risk.
Settlement Details
Wakefern has been involved in two major settlements recently. The first involves underpayment of overtime to employees due to a payroll software error. This affected Wakefern subsidiaries like Village Supermarket, ShopRite, Dearborn Markets, and Fresh Grocer in NY and NJ.
The company discovered and fixed the issue before a lawsuit was filed. The settlement is awaiting court approval. If approved, affected employees will be notified on how to claim a portion of the settlement.
The second settlement is about improper disposal of electronic devices containing protected health info from ShopRite pharmacies. In 2016, Wakefern replaced old devices but disposed of them in dumpsters without destroying the sensitive data first. This violated HIPAA laws and the NJ Consumer Fraud Act.
To settle, Wakefern agreed to pay $235,000 in penalties and fees. They also have to appoint a chief privacy officer, execute business associate agreements, and have HIPAA privacy/security officers complete online training. This ensures ShopRite pharmacies protect consumer health data going forward.
Eligibility For Compensation
Employees who believe they were underpaid due to the payroll software error can file a claim for a portion of the settlement proceeds in the overtime underpayment settlement. However, it is crucial to note that the employees have the option to opt out of the settlement or file objections.
In the data security and privacy settlement, the compensation is more of a company-wide penalty. Wakefern has agreed to pay $235,000. This includes $209,856.50 in civil penalties and $25,143.50 for attorneys’ fees and investigative costs.
Procedures & Deadlines
To be part of the settlement or take other actions, there are some important steps and dates to remember. If you want to opt out of the settlement, you need to fill out and send back the Opt-out Statement by September 25, 2023. This is also the last day to send a letter if you want to object to the settlement and think it’s unfair.
The court will hold a hearing around October 19, 2023, to decide if the settlement is fair. If you do nothing, you’ll automatically be included and will get your payment once you cash the settlement check. It’s important to follow these deadlines, or you won’t be able to sue the Defendants for these issues later.
Distribution Of Settlement Funds
The settlement money will be shared with everyone involved in the case. If you do nothing, you will automatically receive a payment. If you were part of the group that had pay problems, you will get some of the $969,000 set aside for that issue. The rest of the money will be divided equally among everyone who is part of the settlement.
The amount you get depends on your situation during the covered time period. To find out how much you might receive, you can contact the Settlement Administrator. Any leftover money will go to a charity that helps people with disabilities, and none of it will be returned to the companies.
Contact Wakefern Support
If you have questions about the Wakefern Settlement, you can get assistance by contacting the settlement administration directly. Call 516-699-2784 or email [email protected] for help with your inquiries. Feel free to reach out to them for more information or support regarding the settlement.
Conclusion
The Wakefern Settlement highlights the need for careful handling of customer data and fair treatment of employees. Wakefern faced problems with protecting customer information and paying employees correctly, which led to settlements to address these issues.
The company has agreed to pay fines and take steps to improve data security and follow the rules better. Those affected should act quickly to understand their options and meet deadlines if they want to be part of the settlement or raise concerns.
Also Read: Circles Of Care Data Settlement
