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9th Circuit Decision in LVRC Holdings Rejects 7th Circuit’s Holding in Citrin Based on a Motivation Theory of Liability Under the Computer Fraud and Abuse Act

The Ninth Circuit rejected an employer’s argument that a former employee violated the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030, when he emailed company client lists and financial data to himself for personal use. LVRC Holdings LLC v. Brekka, ___ F.3d ___, 2009 WL 2928952 (9th Cir. 2009). Superficially this decision is at odds with another decision in the Seventh Circuit. The employer in LVRC Holding based its theory on the 7th Circuit’s application of agency law as a basis for finding liability under the CFAA. However, the 9th Circuit decision seems sound and consistent with avoiding turning the CFAA into a catchall basis for finding criminal and/or civil liability in the absence of other relevant legal authority. While I disagree with the reasoning of the 7th Circuits decision, I believe justice was served in both cases, and the 9th Circuit laid out a logically more stable basis for assessing liability under the [...]

Former Emloyees Misuse of Company Owned Computers: E-Discovery Issues and Claims Under 18 USC 1030

With unemployment reaching 10% employers are more at risk then ever from former employees who are let go, regardless of the reason attempt to take punitive action against their former employer. Recent cases highlight actions by former employees which put their former employer at risk through the spoliation of relevant data and/or theft of company trade secrets. Spoliation occurs when a party is aware of pending litigation, or should reasonably be able to anticipate pending litigation, and the party fails to suspend the destruction of documents that may be relevant to anticipated litigation; the party is also required suspend routine document purging (or passive) destruction of data by systems. Accordingly, in anticipation of potential legal issues resulting with from the termination of an employee’s, an employer should specifically define the scope (or absence thereof) of the employee’s right/expectation of privacy when using work owned information systems or computers in a policy or employee handbook. Nat’l Econ. Research Assocs., Inc. v. Evans, 2006 WL 2440008 (Mass. Super. Ct. Aug. 3, 2006)(relating to privilege of attorney-client communication of employee with his/her attorney), see also Sprenger v. The Rector and Board of Visitors of Virginia Tech, 2008 U.S. Dist. LEXIS 47115 (W.D. Va. June 17, 2008)(relating to spousal privilege). Second, the employer should remind the departing employee of the former employee’s duty not to steal company trade secrets and/or other confidential material regardless of the reason. Finally, employer should inform the former employee that he/she should not delete and/or destroy relevant data if he/she anticipates bringing legal [...]

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