Michael A. Kakuk  |  April 18, 2016

Category: Labor & Employment

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seagate logoA class action lawsuit filed on April 14 alleges that computer hard drive manufacturer Seagate Technology LLC allowed hackers to obtain the financial data of 10,000 employees.

“On or about March 1, 2016, a Seagate employee responded to an Internet ‘phishing’ scam by forwarding to unknown cybercriminals the 2015 Forms W-2 data for all of Seagate’s and Seagate’s affiliates’ current and former employees,” the complaint states.

The class action claims that employees are already falling victim to identity theft from the private information leak. The complaint alleges that “Almost immediately, the cybercriminals exploited Seagate’s wrongful actions and filed fraudulent federal and state tax returns in the names of the Employees.” The complaint also notes that some of those fraudulent tax returns were filed as joint returns, meaning that the hackers also have at least the social security numbers of employees’ spouses.

The Seagate employee data breach class action lawsuit asserts that the cyber-criminals “may continue to exploit the data themselves and/or sell the data in the so-called ‘dark markets,’” and that “the Employees and Third-Party Victims are now, and for the rest of their lives will be, at a heightened risk of identity theft.”

Seagate notified its employees of the data breach on or about Mar. 4, 2016, and former employees around Mar. 9. According to the class action, Seagate claims the data was released due to a “phishing” scam which involved fake emails to Seagate employees involved with human resources and payroll. The complaint states that an email from Seagate’s Chief Financial Officer told employees that “This mistake was caused by human error and lack of vigilance, and could have been prevented,” and that Seagate offered its employees a free credit monitoring service for two years.

However, “Seagate has not offered any compensation to Third-Party Victims,” the class action notes. In addition, the complaint argues that Seagate’s offer of credit monitoring is inadequate, because “it will not provide Employees any compensation for the costs and burdens associated with the fraudulent tax returns that were filed prior to an Employee signing up” for the program.

Plaintiffs Everett Castillo and Wendy Tran are employees of Lyve Minds Inc., which was acquired by Seagate in 2015. Castillo and Tran state that their W-2 information went to Lyve Minds; regardless, their personal information was still part of the Seagate data breach. Plaintiff Linda Castillo is Everett Castillo’s wife, and states that she is a third party victim of the Seagate data breach. All three plaintiffs claim that false tax returns were filed using their stolen information.

The plaintiffs seek to represent an employee Class of “All current and former Seagate or Seagate affiliates’ employees whose PII was compromised as a result of the Data Breach” as well as a third party victim Class of “All non-current or former Seagate or Seagate affiliates’ employees whose PII was compromised as a result of the Data Breach, including but not limited to spouses, children or other individuals associated with Employees.” The class action asks for restitution and damages from Seagate’s negligence.

The plaintiffs are represented by Mark S. Greenstone, Lionel Z. Glancy, and Marc L. Godino of Glancy Prongay & Murray LLP, and David J. Stone, Jeffrey H. Squire, and Lawrence P. Eagel of Bragar Eagel & Squire, P.C.

The Seagate Employee Data Breach Class Action Lawsuit is Everett Castillo, et al. v. Seagate Technology LLC, Case No. 3:16-cv-01958, in the U.S. District Court for the Northern District of California.

UPDATE: On July 27, 2017, Seagate has agreed to settle a class action lawsuit alleging the company was duped by a phishing scam leading to a massive data breach in 2016 that exposed employees’ sensitive financial data. According to settlement documents, Seagate will provide each employee and family member affected by the data breach two years of identity theft protection and up to $3,500 to reimburse any costs associated with the breach.

UPDATE 2: April 2018, the Seagate data breach class action settlement is now open. Click here to file a claim.

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