Computer Fraud and Abuse in Employment Cases (8/20/2007)

In certain circumstances, the CFAA can enable an employer to recover damages and obtain an injunction against a departing employee without jumping through the hoops required under traditional trade secrets and unfair competition laws. For example, an employer does not have to prove that the information accessed by the former employee was a trade secret, and does not have to show that the employee or a competitor is actually using or threatening to use the information.

Of course, businesses must be aware that there is some risk involved; if it is easy to accuse someone of stealing information, it is just as easy to be accused. Every time a former employee accesses information from a current employer’s computer after accepting new employment, or downloads materials and forgets to return them before starting a new job, then the new employee and the former employer could face exposure to civil and criminal penalties.

In order to establish liability, a plaintiff must show that a defendant:

· Either fraudulently or intentionally accessed a protected computer without authorization or in excess of authorized access; and

· Caused damages of at least $5,000.

The law is increasingly being used to control regulate the activities of former employees. All that the former employer needs to show is that the employee was acting on behalf of the new employer at the time when the employee accessed the former employer’s computer, and that the access caused $5,000 in damage. Damages are interpreted broadly, and are easy to prove. Even if an employee simply deletes certain files, the standard can be met.

Employers can protect themselves by notifying all new hires in writing that they are not to gather information from their old employer at any time, by requiring all new hires to certify that they have returned all electronic data to their former employer before starting work, and should instruct new employees not to transfer any preexisting data or information to the new employer’s computer without express consent from the new employer. The new employer has a defense if the employee accessed materials for his or her own benefit, and if the employee was not acting as the new employer’s agent at the time.

The goal of this article is to provide employers with current labor and employment law information. The contents should neither be interpreted as, nor construed as legal advice or opinion. The reader should consult with Saqui & Raimondo at (831) 443-7100 in Salinas, (916) 782-8555 in Sacramento, or at (559) 449-8585 in Fresno, for individual responses to questions or concerns regarding any given situation.