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Ex-employee phishing attack class action reopened



A federal appeals court has overturned a lower court and reinstated a putative class-action lawsuit filed by a former drug company employee whose personal information was released on the dark web following a phishing attack.

Jennifer Clemens, a former employee of ExecuPharm Inc., a unit of Parexel International Corp., whose U.S. headquarters are in Newton, Mass., was required as a condition of her employment to provide sensitive personal and financial information, such as her Social Security and bank and financial account number, according to Friday’s ruling by the 3rd U.S. Circuit Court of Appeals in Philadelphia i Jennifer Clemens v. ExecuPharm Inc.; Parexel Int’l Corp. The company promised to take appropriate measures to protect the information.

In March 2020, a hacker group gained access to ExecuPharm̵

7;s services through a phishing attack and installed malware to encrypt data stored on its servers, the ruling said. Either because ExecuPharm did not pay the ransomware or for other reasons, the company’s data was released on the dark web.

To mitigate potential damage, Clemens immediately took steps, including moving to a new bank and purchasing credit monitoring services.

She filed a putative class action against the companies in U.S. District Court in Philadelphia, alleging breach of contract, fiduciary duty and reliance.

The district court dismissed the case, stating that Clemens had not yet experienced actual identity theft or fraud. It was overturned by a unanimous three-judge appeals court panel.

ExecuPharm “expressly agreed” to protect Clemens’ information in its employment agreement, the ruling said, adding: “As employment agreements have become routine, information security provisions” such as those in this case “have assumed a new prominence.

“Similarly, the failure to enforce these provisions – especially in the digital age – can have uniquely drastic consequences,” the judgment said, reinstating the case and recalling the judgment for further proceedings.

Plaintiff attorney J. Austin Moore, a partner with Stueve Siegel Hanson LLP in Kansas City, Missouri, said in a statement: “We appreciate the panel’s thorough and well-reasoned analysis and look forward to pursuing the merits of these claims before the district court.”

Parexel’s lawyers did not respond to a request for comment.


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