Dumpster Diving Law in Wisconsin

WISCONSIN’S NEW "DUMPSTER DIVING" LAW

As a result of recent Wisconsin legislation, certain employers need to exercise care when disposing of records, particularly those records containing an individual’s "personal information." Wisconsin Statute Section 895.505, or the "Dumpster Diving" law, effective February 2000, imposes civil liability on "covered businesses," which are "financial institutions, medical businesses or tax preparation businesses, to properly dispose of records. The law also makes it a crime for any person to possess a document or record disposed of by a financial institution, medical business or tax preparation business if the person intends to use it for "any purpose."

Consequently, the law allows individuals to sue financial institutions, medical businesses or tax preparation businesses that improperly dispose of personal information which could allow the unauthorized possession and use of such information by a third party (i.e., "dumpster diver"). Therefore, covered businesses must be more attentive to the manner in which records containing "personal information" are handled.

Even if your company is not a "covered" business, there is some concern. Read most broadly, all companies may be liable if the company possesses and later disposes of documents that state a medical condition (such as an FMLA medical certification) or relate a person’s finances (e.g., credit card receipts, expenses).

WHAT IS "PERSONAL INFORMATION"?

Personal information includes:

• Data about an individual’s medical condition which is not considered public knowledge;
• Records that contain an individual’s account number or similar information;
• Information provided by an individual to a financial institution; or
• Information about an individual’s tax returns.

WHAT ARE "RECORDS"?

"Records," under the new law, refers to any material on which written, drawn, spoken, visual or electromagnetic information is recorded or preserved, regardless of physical form or characteristics. This definition includes computer files.

WHAT SHOULD BUSINESSES DO TO COMPLY?

Fortunately, the statute is clear in stating the necessary steps to be taken by covered businesses to ensure compliance. Covered businesses may not dispose of a record containing personal information unless one of the following steps is taken. The company must:

• Shred the record before disposing of it; or
• Erase the personal information contained in the record before disposing of it; or
• Modify the record to make the personal information unreadable before disposing of it; or
• Take action to ensure that no unauthorized person will have access to the personal information contained in the record during the period between the record’s disposal and the record’s destruction.

If your company is covered, compliance with the law is not difficult. Review your company’s current recordkeeping policies to ensure that they are in accordance with the law. If necessary, add provisions that deal with proper disposal of records containing "personal information." This definition again includes both paper and computer files. Alert all employees to the new law and make sure the company’s policies and procedures relating to record disposal are well known and adhered to by all employees.

This new "Dumpster Diving" law provides a great opportunity for all Wisconsin businesses to audit their existing recordkeeping and disposal practices. For a copy of this new law, send a request via facsimile to Wessels Pautsch & Sherman P.C. at (414) 291-0200. Our attorneys will "fax back" a complimentary copy to you.

Posted 7/3/00