Jun 18, 2009

Missouri Federal Court Uses Common Sense To Hold Former Employees Accountable for Keeping Company Laptops

In a recent Missouri court decision regarding former employees who kept their company-issued laptop computers after their departure, the federal Computer Fraud and Abuse Act (“CFAA”) was a potent weapon against them.

Pursuant to the CFAA, an employer may file a lawsuit against a person who, without authorization, accesses a computer owned by the employer and causes damage and/or loss to the employer. Although the terms “damage” and “loss” are defined in the CFAA, many court decisions narrowly interpreted those terms by requiring employers to show that the departing employee had implanted a virus or installed a computer program that caused the destruction of information. However, in Lasco Foods, Inc. v. Hall and Shaw Sales, Marketing and Consulting LLC, 600 F.Supp.2d 1045 (E.D.Mo. 2009), the court held that the employer properly pled both “loss” and “damage” by claiming that two departing employees who refused to return their company-issued laptop computers (one did not return it for 38 days, and the other did not return it for 70 days) and potentially deleted information on those computers.

In Lasco, after the employer eventually regained possession of one of the computers and had a forensic investigation performed on the computer, the company determined that one employee had deleted company information. For the other former employee, the employer had not regained possession of the computer by the date that it filed the lawsuit but believed that the employee may have deleted information.

In both situations, the court determined that the employer had alleged sufficient facts to establish both “loss” and “damage” under the CFAA. Pursuant to the court’s decision, it may be possible for an employer to establish “loss” by showing that the departing employee deleted information from the computer; that the employer incurred costs by performing a forensic analysis and/or any other remedial measures associated with retrieving and analyzing the affected computers; and/or that there was an “interruption in service” caused by the employee’s refusal to return the computer. Moreover, an employer may be able to establish “damage” by proving that the employee deleted or otherwise destroyed electronic information, regardless of whether that information was confidential or a trade secret.

The Lasco case demonstrates that the CFAA is useful because it provides employers with a possible way of taking disgruntled current and former employees to federal court for wrongfully accessing and destroying electronic information, and it does not require employers to show that the destroyed information was confidential or a trade secret.

For more information on this topic, please contact your employment law counsel at Smith, Gambrell, & Russell, LLP.

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