Monday, July 30, 2012

4th Circuit Limits CFAA in Employment Context

4Jon Harkavy (Harkavy & Patterson) sends us word of the recent Fourth Circuit case of WEC v. Miller.  Rather than re-inventing the wheel I'll just copy-and-paste the text from Jon's email to me.  The take-away is in bold.

[This] Fourth Circuit decision [] deprives employers of a civil remedy for damages against their former employees under the federal Computer Fraud and Abuse Act where the employees used the employer's private data for the benefit of their new employers (and to the detriment of the former employer.)  Whatever the former employer's remedies may be under state law for misuse of proprietary information, the Fourth Circuit holds that so long as the employees had authorization to use the computer to obtain data, they cannot be liable under the CFAA for using data obtained on a computer they were authorized to use.  In so holding, the Fourth Circuit deepens a circuit split that may make this decision cert-worthy.  In any event, the court's reluctance to turn an anti-hacking statute with both civil and criminal penalties into an employer weapon against trade secret abuse makes for interesting reading.


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Employers should be more diligent in requiring all or at least the vast majority employees to sign confidentiality agreements and covenants not to compete. This way, they clearly have a breach of contract remedy where allegations such as CFAA might fail.

Posted by: Kendall Isaac | Aug 1, 2012 10:52:40 AM

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