United States v. Nosal: Ninth Circuit Decision Increases Protection Against Employee Computer Data Theft

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The U.S. Court of Appeals for the Ninth Circuit has given employers a clear path to increased protection for their trade secrets and other proprietary information in its decision in United States v. Nosal, Case No. 10-10038 (9th Cir. Apr. 28, 2011), holding that an employee who misuses a company computer with fraudulent intent violates the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030 et seq. The CFAA creates both civil and criminal liability for accessing a computer “without authorization” or “exceeding authorized access” and knowingly committing one of several specified unlawful acts.

Rejecting arguments that its interpretation would “make criminals out of millions of employees who might use their work computers for personal use,” the court held that an employee who (1) violates an employer’s use restrictions (2) with an intent to defraud and (3) by that action furthers the intended fraud and obtains something of value, violates the CFAA.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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