Data Breaches: When the Risk Is Closer Than You Think

Nowadays, it is essential for companies of all sizes to be well prepared against various threats that can compromise data protection, such as cyberattacks or employee errors. However, few realize that their own internal management processes — as well as their suppliers, no matter how close they are — can easily become a vector for the leakage of sensitive information.

In this article, we illustrate this situation through a real-world scenario that frequently occurs in organizations. Through this example, our goal is to highlight the actual risks associated with relationships with external partners and gaps in contractual management — and to raise awareness about the importance of maintaining constant vigilance toward them.

 

When Hiring Freelancers Involves Intermediaries

To simplify the process of hiring freelancers, many organizations rely on staffing agencies. Some companies even refuse to contract directly with independent workers and prefer to go through an agency with which they already have a master agreement in place.

In this context, the company may send its own employment contract to the staffing agency. However, the agency usually has a separate master contract — one that the client company has often never seen. The freelancer must then sign that master agreement, to which the company’s contract is attached as an annex.

 

Contract Clauses to Watch Out For

The problem arises when the agency’s master contract includes provisions that differ from those of the company. For instance, by signing it, the freelancer may be required to consent to share all project-related information with the agency at any time — without the company’s knowledge.

Typically, the justification for such clauses revolves around “quality control of the consultant’s work,” even though no one at the agency is actually qualified to evaluate that work. The rationale may also involve periodic project updates or the possibility of the agency terminating the contract. The end result: the company loses control over confidential data.

The risks don’t end there. If the staffing agency’s headquarters — or its IT services — are located abroad, sensitive information could be stored in a data center outside Canada, thereby falling outside Canadian jurisdiction. Even if the contract between the agency and the consultant states that Canadian laws apply, some provisions in the master agreement may still stipulate that foreign law could, in certain cases, override a Canadian court decision.

Finally, some clauses in the agency’s contract may even expose the freelancer to personal liability. This puts them at risk of serious legal consequences for breaching the agency’s contract if they refuse to share files related to their work.

 

The Limits of Security Measures

In many cases, a company hiring an external consultant requires them to sign a confidentiality agreement and complete information security training — just like any other employee. Yet, as mentioned earlier, the staffing agency’s contract may undermine these precautions and place the consultant “between a rock and a hard place.” This creates a blind spot in the organization’s risk management — one that is often completely overlooked.

 

How to Manage the Risks Effectively

Several measures can be implemented to prevent such situations — both by the company and by the freelancer.

For the Company

• Request all contractual documents: Obtain complete copies of all contracts, appendices, and terms and conditions applicable to the consultant, including the agency’s master agreement.
• Review sensitive clauses: Ensure oversight of provisions related to confidentiality, intellectual property, subcontracting, governing law, and data transfer.
• Involve legal counsel: Establish a clear procedure with internal or external legal advisors for reviewing or negotiating sensitive contract clauses.
• Assess data localization risks: Verify where the agency’s or its partners’ servers are located and whether cross-border data transfers are possible.
• Raise awareness among managers: Train hiring managers and procurement officers to identify risky clauses in staffing agency contracts.
• Integrate contract management into governance: Include this dimension within the organization’s information security policy.
• Maintain a register of critical third parties: Document all agencies, consultants, and suppliers with access to sensitive information, along with their compliance status and protection measures.

For the Freelancer

• Read the contract carefully: Review all clauses, including annexes and cross-references, before signing.
• Consult a legal advisor if needed: Have an attorney or notary review the agreement, especially clauses related to confidentiality, personal liability, governing law, or data transfers abroad.
• Understand your responsibilities: Be aware of legal, fiscal, and confidentiality obligations arising from the contract, as well as any personal risks.
• Keep records of exchanges and signed versions: Archive contractual communications, revisions, and signed electronic copies for future reference.
• Clarify information-sharing boundaries: Confirm with the client company what can and cannot be shared with the staffing agency.
• Protect your own data and devices: Use separate accounts, encryption solutions, and secure communication channels for all data transfers.
• Obtain professional liability insurance: Ensure that your coverage includes confidentiality and cybersecurity-related risks.

 

Conclusion

Data breaches are not always caused by careless employees or cybercriminals; they can also stem from weak contractual management processes. Fortunately, this vulnerability can be easily avoided when a company implements appropriate measures and adopts strong governance over its procurement contracts to better protect its strategic information.

 

Strategic Support to Prevent Disruptions

At Benoit Racette Services-conseils inc., we help organizations protect their critical operations, ensure the safety of their teams, and maintain customer trust — even when faced with major disruptions.

With over 27 years of specialized experience in business continuity, crisis management, emergency preparedness, and IT disaster recovery planning, Benoit Racette provides rigorous, confidential support — transforming complex challenges into practical, tailored solutions.

• Diagnostic de résilience
• Plan de continuité des affaires à jour
• Plan de gestion de crise fonctionnel
• Plan de relève informatique réaliste
• Tests et exercices pour valider vos plans et renforcer vos équipes
• Formation ciblée en continuité, gestion de crise et préparation opérationnelle

These are the tools that distinguish organizations that suffer from those that respond with mastery. Would you like to assess your vulnerabilities, update your plans, or prepare effectively?

Contact us: [email protected]

 

Important Notice

This article presents a perspective on organizational risk management and is not intended to provide legal advice. Situations may vary depending on contractual context, applicable jurisdiction, and organizational practices. It is strongly recommended to consult a legal advisor or attorney specializing in business or labor law before entering, modifying, or interpreting a contract with a staffing agency or external consultant.