Clorox Sues Vendor Over Data Breach Passwords

Clorox Blames Cybersecurity Giant Cognizant for Devastating 2023 Breach

The Clorox Company is pointing the finger at its outsourced IT service provider, Cognizant, for a massive cybersecurity breach in 2023 that resulted in an estimated $380 million in damages.According to a new lawsuit filed by Clorox, the breach was facilitated by what it describes as a “devastating lie” and a failure to follow basic security protocols by Cognizant.

the lawsuit details how hackers gained access to Clorox’s network not through sophisticated means, but by simply calling Cognizant’s service desk and requesting password resets and multi-factor authentication (MFA) authentications for Okta and Microsoft.Clorox alleges that Cognizant’s employees, allegedly aware of inadequate training, handed over the necessary credentials without proper identity verification.

“Cognizant was not duped by any elaborate ploy or sophisticated hacking techniques,” the lawsuit states, emphasizing the alleged lack of security. “The cybercriminal just called the Cognizant service Desk, asked for credentials to access Clorox’s network, and Cognizant handed the credentials right over.” Clorox further claims that Cognizant is “on tape handing over the keys to Clorox’s corporate network to the cybercriminal-no authentication questions asked.”

For a decade, from 2013 to 2023, Cognizant was responsible for managing Clorox’s service desk, handling crucial access requests related to passwords, VPNs, and MFA, effectively guarding the company’s digital “front door.” Clorox contends that Cognizant “failed to show even scant care” in its duties, leading to the notable breach.

what specific security standards did Clorox contractually obligate the vendor to uphold, and how did the vendor allegedly fail to meet those standards?

Clorox Sues Vendor Over Data breach: Passwords and Potential Fallout

The Core of the Dispute: A Vendor Data Breach

Clorox is currently engaged in legal action against a third-party vendor following a significant data breach impacting employee passwords. While details are still unfolding as of July 24, 2025, the lawsuit alleges negligence on the vendor’s part in protecting sensitive employee data.This incident highlights the growing risks associated with supply chain vulnerabilities and the importance of robust cybersecurity measures for all organizations, regardless of size. The breach specifically involved compromised employee credentials,raising concerns about potential access to Clorox’s internal systems.

What We Know About the Breach & password Security

The lawsuit, filed [insert court details if available – research needed], centers around the vendor’s failure to adequately safeguard employee passwords. Key aspects of the breach currently understood include:

Compromised Credentials: The primary issue is the exposure of employee usernames and passwords. The method of compromise is still under inquiry, but potential vectors include phishing attacks, malware, or vulnerabilities in the vendor’s security infrastructure.

Vendor responsibility: Clorox argues the vendor had a contractual obligation to maintain a certain level of data security and failed to do so. This is a common point of contention in third-party breach lawsuits.

Potential Impact: The compromised credentials could perhaps grant unauthorized access to Clorox’s systems, including sensitive financial data, intellectual property, and customer details.While Clorox has stated they are working to mitigate risks, the full extent of the damage is still being assessed.

Password Management Practices: The incident raises questions about the password management practices of both Clorox and its vendor. Were strong, unique passwords enforced? Was multi-factor authentication (MFA) utilized? These are critical areas of scrutiny.

Legal Ramifications & Third-Party Risk Management

This lawsuit isn’t just about Clorox seeking damages; it’s a significant case study in third-party risk management. here’s a breakdown of the legal implications:

Breach of Contract: The core of Clorox’s claim is likely a breach of contract, alleging the vendor violated agreed-upon security standards.

Negligence: clorox may also argue negligence,claiming the vendor failed to exercise reasonable care in protecting sensitive data.

Data Breach Notification Laws: Depending on the nature of the data compromised and the location of affected employees, Clorox may be obligated to comply with various data breach notification laws (e.g., GDPR, CCPA).

Vendor Due Diligence: This case underscores the importance of thorough vendor due diligence. companies must assess the security posture of their vendors before granting them access to sensitive data. this includes reviewing security policies, conducting audits, and ensuring vendors have adequate cybersecurity insurance.

Mitigating the Damage: Clorox’s Response & Best Practices

Clorox has taken several steps to address the breach, and these actions provide valuable lessons for other organizations:

1. Password Resets: Immediately initiated a mandatory password reset for all potentially affected employees.
2. System Monitoring: Increased monitoring of internal systems for suspicious activity.
3. Forensic Investigation: Launched a forensic investigation to determine the scope of the breach and identify vulnerabilities.
4. Enhanced Security Measures: implementing enhanced security measures, including strengthening access controls and improving intrusion detection systems.
5. Multi-factor Authentication (MFA): A strong recommendation for all organizations is to implement MFA across all critical systems. this adds an extra layer of security, even if a password is compromised.

The Growing Trend of Supply Chain Attacks & Cybersecurity Insurance

The Clorox lawsuit is part of a larger trend of supply chain attacks. Hackers are increasingly targeting vendors and third-party providers as a way to gain access to their clients’ systems.

SolarWinds Hack (2020): A prime example of a devastating supply chain attack, where hackers compromised SolarWinds’ Orion software, impacting thousands of organizations.

Kaseya Ransomware Attack (2021): Another significant incident where ransomware was deployed through a vulnerability in kaseya’s VSA software.

These attacks highlight the need for:

Cybersecurity Insurance: Organizations should consider cybersecurity insurance to help cover the costs associated with a data breach, including legal fees, forensic investigations, and notification expenses.

Continuous Monitoring: Regularly monitor vendor security posture and conduct ongoing risk assessments.

Incident Response Plan: Have a well-defined incident response plan in place to quickly and effectively respond to a data breach.

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