Posts in Computer Fraud and Abuse Act.
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The Faithless Servant Doctrine: Can an Employer Claw Back Compensation from an Employee Who Binge-Watches “Friends” During Work Hours?
Categories: Computer Fraud and Abuse Act, Duty of Loyalty / Fiduciary Duty, Litigation
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New York is known for having many protections for its employees in the workplace, but a long-standing legal doctrine can furnish a remedy to employers with regard to employees who engage in repeated acts of disloyalty during their employment. The “faithless servant doctrine” permits an employer to “claw back” an employee’s compensation when an employee is found to be disloyal to the employer. While the doctrine may seem antiquated, it continues to have vitality.  For example, in March 2018, a New York appellate court confirmed an arbitration award that directed, based on ...

Blogs
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Hiring from a Competitor: Practical Tips to Minimize Litigation Risk
Categories: Computer Fraud and Abuse Act, Post-Employment Restrictions, Unfair Competition
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Thomson Reuters Practical Law published a Practice Note co-authored by Peter A. Steinmeyer and Robert D. Goldstein, Members of the Firm, “Hiring from a Competitor: Practical Tips to Minimize Litigation Risk.”  This Practice Note discusses potential statutory and common law claims when hiring from a competitor, the need to identify any existing contractual restrictions a potential new hire may have, how to avoid potential issues during the recruitment process, ensuring the new hire is a “good leaver” during the resignation process, responding to cease ...

Blogs
Clock 4 minute read
Criminal Enforcement Protects Trade Secrets Taken By Departed Employees
Categories: Computer Fraud and Abuse Act, Trade Secrets and Confidential Information
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[caption id="attachment_2116" align="alignright" width="113"] James P. Flynn[/caption]

In the recent case of United States v. Nosal, the United States Court of Appeals for the Ninth Circuit confirmed the applicability of both the Computer Fraud and Abuse Act and the Economic Espionage Act as safeguards against theft of trade secrets by departed former employees.  Importantly, Nosal applied such laws to convict a former employee in a case involving domestic businesses and personnel without any alleged overseas connections.  Because of civil enforcement provisions in the CFAA ...

Blogs
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Federal Court in California Sheds Light on Computer Fraud and Abuse Act: Allegations of Indirect Access Held Insufficient To State Claim
Categories: Computer Fraud and Abuse Act
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On March 20, 2015, a California federal court rejected an expansive reading of the Computer Fraud and Abuse Act (“CFAA”) urged by two plaintiff corporations that sought to hold a competitor and two of its directors liable under the CFAA, under an agency theory, for the actions of a former employee who allegedly downloaded and stole the corporations’ confidential trade secrets.

The plaintiffs, Koninklijke Philips N.V. and Philips Lumileds Lighting Company (“Lumileds”) are engaged in the business of Light Emitting Diode (“LED”) technology.  They alleged that Dr ...

Blogs
Clock 4 minute read
The Courts Continue To Wrestle With The Interpretation Of The Computer Fraud And Abuse Act
Categories: Computer Fraud and Abuse Act
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A recent decision from the District of Massachusetts highlights an ongoing split in the case law concerning the Computer Fraud and Abuse Act.
Blogs
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Congress Considers Companion Bills That Could Have Far Reaching Consequences For Companies Facing Trade Secret Theft And/Or Computer Fraud And Abuse
Categories: Computer Fraud and Abuse Act, Trade Secrets and Confidential Information
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A California legislator recently introduced two bills in Congress which, if passed, could have profound effects for companies seeking to pursue claims relating to trade secrets and confidential information - one bill would create a new private right of action under federal law for trade secret theft, while the other bill would appear to limit plaintiffs' abilities to pursue existing remedies for computer fraud and abuse.
Blogs
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Massachusetts Federal Court Weighs In On Computer Fraud And Abuse Act
Categories: Computer Fraud and Abuse Act
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In a recent case, the United States District Court for the District of Massachusetts issued the latest opinion regarding whether former employees violated the Computer Fraud and Abuse Act before they joined a competitor by downloading electronic information without authorized access.
Blogs
Clock 5 minute read
Fallout From Nosal Verdict
Categories: Computer Fraud and Abuse Act
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Practitioners in the area of trade secret protection and employee mobility law are still trying to sort out the impact of a federal court jury verdict in San Francisco last month finding former Korn Ferry executive David Nosal guilty of two criminal counts stemming from his alleged misappropriation of the Company's proprietary information after his departure.
Blogs
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Fourth Circuit Adopts "Narrow Reading" of Authorization under the Computer Fraud and Abuse Act
Categories: Computer Fraud and Abuse Act
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Last week, the U.S. Court of Appeals for the Fourth Circuit issued a decision regarding the scope of liability under the Computer Fraud and Abuse Act ("CFAA"), and sided with the Ninth Circuit in adopting a narrow reading of the statute. In affirming dismissal, the Fourth Circuit adopted "a narrow reading of the terms 'without authorization' and 'exceeds authorized access' and held that they apply only when an individual accesses a computer without permission or obtains or alters information on a computer beyond that which is authorized to access." The Fourth Circuit further rejected any CFAA liability grounded on an agency theory, noting that such a theory for liability has far-reaching effects unintended by Congress.
Blogs
Clock 2 minute read
The "Authorized Access" Issue Under the Computer Fraud and Abuse Act
Categories: Computer Fraud and Abuse Act
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An action pending in federal court in New York demonstrates that the Computer Fraud and Abuse Act ("CFAA") should not simply be added to an employer's complaint against its former employees and a competitor, primarily alleging common law claims sounding in misappropriation of trade secrets and unfair competition, in connection with the alleged poaching of the employer's clients. In a recent decision, the Court dismissed the state law claims, finding that they formed the real body of the case, and retained jurisdiction over the CFAA claim. The CFAA claim is now the subject of defendants' motion to dismiss, on the grounds that the former employees had authorized access to the computer systems of the employer, and therefore the statutory prerequisites to state a claim were not met.
Blogs
Clock 2 minute read
Clinical Lab Sues Former Executives and Sales Representatives For Competing with Rival Business and Soliciting Clients and Employees
Categories: Computer Fraud and Abuse Act
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A lawsuit recently filed in the United States District Court for the Eastern District of Virginia could be of interest to employers and attorneys alike who are following the split in the courts across the country as to whether computer access while an employee meets the statutory test for "without authorization" under the Computer Fraud and Abuse Act.
Blogs
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Ninth Circuit Disagrees with Seventh Circuit Citrin Case and Holds that the Computer Fraud and Abuse Act Is Not Violated When a Disloyal Employee Accesses Electronically Stored Information for Personal Gain
Categories: Computer Fraud and Abuse Act
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This week, in LVRC Holdings LLC v. Brekka, the Ninth Circuit Court of Appeals issued a published opinion rejecting an employer's argument that its former employee violated the Computer Fraud and Abuse Act when he emailed company client lists and financial data to himself for personal use.
Blogs
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How Employers Can Use CFAA to Get Back Laptops
Categories: Computer Fraud and Abuse Act
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Employers looking to protect their intellectual property and proprietary information, and wondering whether they can punish the departing employees that ignore demands to return laptops and other transportable electronic devices that hold such data, may now have a newly invigorated weapon at their disposal -- the Computer Fraud and Abuse Act.

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