Employers in North Carolina, Virginia, Maryland, West Virginia and South Carolina have lost a potentially powerful method of protecting their electronic secrets from disgruntled employees who download sensitive material and take it with them to a competitor.

Some companies in this situation have sued the ex-employee under the federal Computer Fraud and Abuse Act (“CFAA”). The CFAA is a criminal statute intended to combat computer hacking, but it allows a civil lawsuit against a person who obtains information from another’s computer “without authorization.” The Fourth Circuit Court of Appeals recently held in WEC Carolina Energy Solutions, LLC v. Miller that the CFAA cannot be used where an employee gains access to information appropriately (ie, without hacking) and then misuses this information against company policy.