Computer Fraud and Abuse Act – An Effective Tool for Employers in Non-Compete and Theft of Trade Secret Litigation

Employee Contract ImageThe federal Computer Fraud and Abuse Act, 18 U.S.C. section 1030, which was originally enacted in 1984 as a criminal statute to protect data on federal computers and deter hackers, has evolved to include a private right of action for any person who suffers damage or loss because of a violation of the law.

The Computer Fraud and Abuse Act now establishes a claim for civil damages for “intentionally access[ing] a protected computer without authorization, and as a result of such conduct, caus[ing] damage and loss.” Most businesses keep their proprietary and confidential (trade secret) information on computers. Frequently departing or disgruntled employees copy trade secrets or other confidential and highly sensitive business information from the company’s computers.

The theft may be accomplished by using USB drives to download the information, sending the information to File Transfer Sites, forwarding the information to personal email accounts, or by logging into password protected computer systems and printing the information. Often, the employee will try to cover his or her tracks by deploying “wiping” software. And frequently the stolen information ends up in the hands of a competitor. Because of the potential serious impact of such conduct, employers increasingly are using the Computer Fraud & Abuse Act in private litigation to go after employees who take proprietary information when they go to work for a competitor or who delete or destroy data kept in the employer’s computer database.

The civil remedies of injunctive relief and monetary relief make the Computer Fraud and Abuse Act a strong tool against employees, especially in the context of non-compete and trade secrets litigation. So an employer considering litigation against former employees and their new companies who are trying to obtain a competitive advantage through the wrongful use of information from the former employer’s computer system should seriously consider pursuing claims under the Computer Fraud and Abuse Act.

If you’re interested in talking about this further, call our Dayton Law Firm and learn more.

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About Toby K. Henderson

Toby became an SS+D shareholder on January 1, 2006. He joined the firm’s Litigation Department in May 2000 and concentrates his practice in Business and Commercial Litigation, Trade Secret Claims, Antitrust, Health Care Law, Construction Law, and Labor and Employment Law.