24 Seven Awarded Damages in I.D. Theft Case
The crime of identity theft has hurt consumers, but a recently resolved court case has shown how companies can fall victim to identity theft, as well.
24 Seven Inc., a New York–based temporary-staffing company that focuses on fashion clients, was awarded more than $1 million in damages Jan. 17 by the New York State Supreme Court. The court determined that a 24 Seven competitor, New York–based Gromwell Group, had used stolen employee information as well as details of 24 Seven’s billing history with its clients.
24 Seven also maintains offices in Los Angeles; Orange County, Calif.; San Francisco; and London. The stolen information included names, Social Security numbers, and employment and pay histories of free-lancers whom 24 Seven had sent to fashion companies. Some of 24 Seven’s past clients include Target, Victoria’s Secret and Nine West.
Gromwell declared Chapter 11 bankruptcy on Jan. 17. 24 Seven may never collect on damages or further prosecute the case because of the bankruptcy filing, said Richard M. Reice, the lawyer who represented 24 Seven. Reice is a partner in the New York firm Seyfarth Shaw. Gromwell President Tom Foley did not answer a request for comment.
The suit started in 2004 after three former 24 Seven employees stole print-outs of files of freelancers’ personal information as well as the company’s billing and sales information with its clients.
After the theft, 24 Seven’s clients and employees fielded calls from Gromwell. 24 Seven filed a restraining order against Gromwell in 2004 and demanded its information be returned.
The data were not returned, and Gromwell did not stop contacting 24 Seven free-lancers or clients. The $1 million damages were awarded because Gromwell violated the restraining order, Reice said.
Since 2005, 24 Seven has spent more than $300,000 on security measures such as watermarking documents and installing security cameras in company offices, said Stuart Kagel, chief operating officer of 24 Seven. The company sends more than 800 free-lancers to fashion jobs across the world each week. —Andrew Asch
