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Non-Compete and Trade Secrets Blog

Posts tagged CFAA.

Twas the night before Christmas, when all through the company; A disgruntled employee kept saying “please jump with me.” She was trying to line up a grand, mass departure; Of which she was certain no one could outsmart her.

Just a few days after the Major League Baseball season opens next month, former St. Louis Cardinals scouting director Chris Correa will attend a sentencing hearing where he faces to up to five years in prison, a $250,000 fine, and payment of restitution to the Houston Astros. Correa pleaded guilty earlier this year to criminal charges brought against him under the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030. Trade secret lawyers, baseball ...

Federal courts have continued to disagree on whether the Computer Fraud & Abuse Act ("CFAA") applies to employees who misuse confidential information or trade secrets obtained from an employer's computer system that the employee was authorized to access. In Florida, and particularly in the Middle District, the large majority of district courts to consider the issue have followed the "narrow" view that an employee who has been granted access to ...

Numerous courts have weighed in recently on whether the Computer Fraud & Abuse Act applies in the context of a faithless employee. But few cases delve into the details of what qualifies as a “loss” under the statute. A recent federal court took on this issue and offered its view on whether an actual payment of money is required to establish a “loss.” The Court also addressed whether bartered services, lost employee time, and attorneys’ fees may qualify. The result is a decision that will make it easier to assert such claims if it is followed by other courts.

The difference between having a trade secret and not can come down to the steps that a company takes to protect its secrets. Most companies use agreements and establish policies, but many forget to be proactive. There are various proactive ways in which employers can monitor the manner in which employees use or disclose trade secrets, but they are not without risk. This post explores some alternatives and notes a few pitfalls to keep an eye out for.

There is an ongoing debate in the courts over whether the federal Computer Fraud & Abuse Act (“CFAA”) applies in the context of departing employees who are at odds with their former employers. A recent opinion by the United States Court of Appeals for the Eleventh Circuit may be seen by some as adding to debate.

As 2011 rolls upon us, five non-compete and trade secret issues are likely to share the spotlight in the coming year. Keep an eye out for judicial and legislative action in Texas, California, Massachusetts on state-specific issues. Federal Courts are likely to adress the Computer Fraud & Abuse Act. And online social media is going to become a routine part of departing employee case law.

Federal courts are split over whether the Computer Fraud & Abuse Act applies to a faithless employee’s misappropriation of an employer’s confidential information by means of the employer’s computer. A California federal court recently held that an employee's access to such a computer is not "unauthorized" for purposes of the CFAA even if the employer's policies preclude such conduct.

The debate over whether the Computer Fraud & Abuse Act applies in the context of faithless employees continues, and the fate of RICO claims in this context remains as uncertain as ever.

Since the addition of civil remedies in 1994, the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (“CFAA”), has evolved into a potentially powerful claim in the departing employee context. The likelihood of success on CFAA claims against departing employees, however, varies by jurisdiction. Recently, numerous courts have debated, and issued divergent rulings, on the enforceability of CFAA claims against departing employees. The debate often focuses on the statute’s “without authorization” or “in excess of one’s authorization” requirement.

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