A federal judge has given preliminary approval to a settlement reached by Sony Pictures Entertainment and employees who sued over the exposure of their personal information resulting from a hack of the company's computers in 2014. Even though the US government blamed North Korea for the attack, employees sued on the grounds that Sony had failed to protect their information. Under the terms of the settlement, Sony will pay current and former employees up to $4.5 million to compensate for their losses and up $3.5 million in legal fees. Individual employees will receive up to $10,000 under the settlement, including up to $1,000 for claims without documentation and an additional two years of ID theft protection. The settlement is expected to be finalized in March 2016.
While employees have sued employers over data breaches for many years now, this is one of the largest awards of compensation on record. When reviewing their budgets for data security, employers would be well-advised to consider that an ounce of prevention can be worth a pound of cure.