Effective Data-Use Policies Can Have “Far-Reaching” Benefits in Cracking Down on Employee Cyber Theft

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In a decision that could make it easier for U.S. companies to enforce claims against employees who commit cyber theft from remote locations, including from beyond U.S. borders, the Second Circuit breathed life into a Connecticut lawsuit accusing a former Canada-based employee of using her home computer to steal trade secrets from her employer’s Connecticut server.

Plaintiff, a Connecticut-based chemical company, employed defendant as an account representative in Canada. When the employee became aware of her impending termination, she downloaded and forwarded to her personal email account certain data files that the company alleged were confidential and proprietary. The company then sued the employee “alleging unauthorized access and misuse of a computer system and misappropriation of trade secrets.” The terminated employee moved to dismiss the complaint for lack of personal jurisdiction. Although the district court held that there was no personal jurisdiction over the Canadian employee because she had not used a computer in Connecticut, the Court of Appeals disagreed. It held that jurisdiction over the defendant employee (in a state she had never visited) was established by her purposeful remote access to the Connecticut servers in retrieving and emailing confidential files.

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