Two District Courts in the Second Circuit Follow Brekka To Dismiss Computer Fraud and Abuse Claims against Employees

Last week two federal district courts, one in Connecticut and the other in Manhattan, followed LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1130-31 (9th Cir. 2009) in dismissing Computer Fraud and Abuse Act (“CFAA”) claims brought against employees who stole company data. In neither case did the plaintiff company employer rely on company computer… Read More

New York Court: CFAA Does Not Apply to Company Executives

A New York court held that the Computer Fraud and Abuse Act’s (“CFAA”) prohibition against unauthorized access does not apply to corporate executives who stole confidential and proprietary information from the company computers because, as company executives, they had been “granted unfettered access to . . . [the company’s] computer system and information residing on… Read More

California Court Holds that an Employee Can Be Sued Under the CFAA for Deleting Company Files

Without referring to its Circuit’s controlling decision of LVRC Holdings LLC v. Brekka, 581 F.3d 1127, (9th Cir. 2009) , a federal district court in San Jose, California permitted a Computer Fraud and Abuse (“CFAA”) claim to proceed against an ex-employee for deleting files from her former employer’s computer. Kal-Tencor Corp. v. Murphy, 2010 WL 1912029 *6-*7 (N.D. Cal. May 11, 2010). This case is significant because it allows a CFAA claim for unauthorized access to be predicated on an employee agreement requiring an employee to return company records at the time of termination from the company. This decision is contrary to another district court decision in the same federal judicial district — U.S. v. Nosal, 2010 WL 934257 *7 (N.D. Ca. Jan. 6, 2010) — leaving open the question of whether in the 9th Circuit employer policies can be used to define employee authorization to the company computers .

Alabama District Court: CFAA Does Not Apply to Employees

Bell Aerospace Services, Inc. v. US. Aero Services, Inc., 690 F.Supp.2d 1267 (M.D. Ala. 2010) recently followed the 9th Circuit’s decision in LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1133 (9th Cir. 2009). The case alleges a classic employee theft of competitively sensitive data from the company computers for use at a competing business. Bell Aerospace Services fired one of its officers who two months later founded a competing company, U.S. Aero Services, and then recruited seven Bell Aerospace Services employees to join him at the new company.

When workers steal data to use at new jobs

In response to the economic crisis, companies have downsized, resulting in some terminated employees’ stealing vital data to improve their job opportunities with a new employer.  In addition to traditional state remedies such as misappropriation of trade secrets, employers have been “increasingly taking advantage of…[the federal Computer Fraud and Abuse Act’s] civil remedies to sue… Read More

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