On October 1, 2020, the Hamburg Data Protection Authority (“Hamburg DPA”) fined H&M, the Swedish clothing company, over €35 million for illegally surveilling employees at its service center in Nuremberg.  This fine is the largest financial penalty issued by a German DPA to date for a violation of the European General Data Protection Regulation (“GDPR”), and the second highest in Europe issued by any DPA (although other DPAs have announced their intention to issue other larger fines).

According to a statement issued by the Hamburg regulator, H&M acquired “extensive recordings of the private-life circumstances” of several hundred employees at the service center since 2014.  This information included details of employees’ holiday experiences, symptoms of illness and diagnoses, family issues and religious beliefs.  H&M recorded this information during one-on-one “Welcome Back Talks” following periods of sick leave or vacation, as well as during additional one-on-one meetings and corridor discussions.  The company permanently saved the information on a network drive that “up to 50 other managers” could access.  H&M used all of this information in “meticulous” performance evaluations; more broadly, it served to “obtain a profile of the employees for measures and decisions in the employment relationship”.

As with so many compliance failings, this issue came to light because of a security breach.  H&M discovered a security breach in October 2019 when a configuration error made the information about employees accessible, company-wide, for several hours.  On learning about the breach, the Commissioner of the Hamburg DPA ordered that the contents of the network drive be frozen and subsequently released.  The DPA then initiated an investigation.

In its announcement about the decision, the Hamburg DPA stated that the combination of research into employees’ private lives and the ongoing recording of activities led to a “particularly intensive interference” with employees’ rights.  He also added that the amount of the fine was appropriate to deter companies from similar privacy violations.

In an online statement, H&M said it will review the decision carefully.  Meanwhile, it has issued an apology to all employees affected and announced that those employed at the service center for at least one month since May 2018, when the GDPR came into force, will receive financial compensation.  We will continue to monitor developments.

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Photo of Helena Milner-Smith Helena Milner-Smith

Helena Milner-Smith helps clients navigate international HR-legal compliance issues. Her practice includes implementing global employment contracts, policies and codes of business conduct, managing multi-country reviews and projects, advising on the employment aspects of large-scale corporate reorganisations, handling disciplinary and grievance matters and dismissals…

Helena Milner-Smith helps clients navigate international HR-legal compliance issues. Her practice includes implementing global employment contracts, policies and codes of business conduct, managing multi-country reviews and projects, advising on the employment aspects of large-scale corporate reorganisations, handling disciplinary and grievance matters and dismissals, and negotiating settlement agreements. She has successfully defended clients in the UK employment tribunal. Ms. Milner-Smith has also gained valuable in-house experience while on secondment at three large multinational corporations, including a pharmaceutical company.

Stacy Young

Stacy Young is a trainee solicitor who attended the University of Law.

Photo of Mark Young Mark Young

Mark Young advises clients on data protection, cybersecurity and other tech regulatory matters. He has particular expertise in product counselling, GDPR regulatory investigations, and legislative advocacy. Mr. Young leads on EU cybersecurity regulatory matters, and helps to oversee our internet enforcement team.

He…

Mark Young advises clients on data protection, cybersecurity and other tech regulatory matters. He has particular expertise in product counselling, GDPR regulatory investigations, and legislative advocacy. Mr. Young leads on EU cybersecurity regulatory matters, and helps to oversee our internet enforcement team.

He has been recognized in Chambers UK as “a trusted adviser – practical, results-oriented and an expert in the field.” Recent editions note that he is “deeply knowledgeable in the area of privacy and data protection,” “fast, thorough and responsive,” and has “great insight into the regulators.”

Mr. Young has over 15 years of experience advising global companies, particularly in the technology, health and pharmaceutical sectors, on all aspects of data protection and security. This includes providing practical guidance on analyzing and using personal data, transferring personal data across borders, and potential liability exposure. He specializes in advising in relation to new products and services, and providing strategic advice and advocacy on a range of EU law reform issues and references to the EU Court of Justice.

For cybersecurity matters, he counsels clients on practices to protect business-critical information and comply with national and sector-specific regulation, and on preparing for and responding to cyber-based attacks and internal threats to their networks and information. He has helped a range of organizations respond to cyber and data security incidents – including external data breaches and insider theft of trade secrets – through the stages of initial detection, containment, notification, recovery and remediation.

In the IP enforcement space, Mr. Young represents right owners in the sport, media, publishing, fashion and luxury goods industries, and helps coordinate a team of internet investigators that has nearly two decades of experience conducting global notice and takedown programs to combat internet piracy.