Computer Fraud

What recourse would you have if an employee stole your company’s proprietary data?

The Computer Fraud and Abuse Act (“CFAA”) has been used as a remedy by employers who experience a loss due to misuse of  computer data by disgruntled employees.

How successful you are in establishing your case depends on how narrowly the courts interpret the law.  More courts are narrowly interpreting the CFAA to cover only outside hacking of computers.  This means misuse by an employee, with authorized access to computer files, may not be covered.

How do you protect yourself?  Write your Non-Compete / Non-Disclosure Agreements with CFAA in mind.  Include that an employee’s authorization to access data ceases immediately upon triggered events i.e. fraudulent activity.

Consider hiring a forensic specialist immediately after a loss. An employee’s use of spyware or decryption tools will help establish a case for unlawful access.  A specialist may also help you determine if the evidence is strong enough to support a CFAA claim.

If you haven’t updated your NCND Agreements recently, you may wish to do so with computer fraud in mind.  Dane Patrick at Langley & Banack is an excellent NCND resource at 210-226-7782.

Credit:  The Computer Fraud and Abuse Act and disloyal employees: a narrow bridge to nowhere?
Seyfarth Shaw LLP
Gary Glaser  and Jacob Oslick