Computer Fraud and Abuse Act Construed Narrowly Against Employer

Consider this common enough scenario:  a senior executive, having resolved to shortly leave his current employer to establish a potentially competing business, uses his employer’s e-mail system to send confidential company documents and data to his personal e-mail account.  Has the executive accessed his employer’s computer resources without authorization and thereby violated a key provision of the federal Computer Fraud and Abuse Act (the “CFAA”)?  According to the Ninth Circuit’s recent decision in LVRC Holdings v. Brekka, No. 07-17116 (9th Cir. Sept. 15, 2009), in the absence of a written agreement with the employee or a computer use policy clearly prohibiting such activity, merely acting contrary to an employer’s interest is insufficient to justify an unauthorized access claim for liability under the CFAA.

LVRC Holdings found itself in the above scenario when it learned that its former employee, Brekka, had sent sensitive company materials to his personal e-mail account prior to his resignation.  Interestingly, before any thought of leaving had arisen, Brekka routinely sent company materials to his personal e-mail account with his employer’s tacit consent.  LVRC only sought to hold Brekka liable for unauthorized access to a protected computer once Brekka decided to start a competing business while still employed by LVRC.  LVRC contended that under those circumstances Brekka was no longer authorized to access the company’s e-mail or other computer resources.

The district court and the Ninth Circuit believed that LVRC’s approach to the CFAA was inconsistent with the idea that as both a civil and civil statute, the CFAA’s prohibitions should be read liberally by analyzing any ambiguities in favor of the defendant under the rule of lenity.  The history of the CFAA as a means of addressing concerns over third party hacking into a company’s computer systems also supported the view that an employee exceeding his authority was not the type of harm the “without authorization” prong of the CFAA sought to address.

In addition, while a claim might have been sustained under a separate part of the CFAA dealing with liability for exceeding one’s authority, such a claim requires convincing proof, and the failure of LVRC to have even adopted an acceptable use policy for company computer resources or to produce acceptable evidence of access after Brekka’s resignation doomed LVRC’s claim.

Among other important lessons, this case highlights the need for employers to have either written agreements with their employees on acceptable computer use practices or at least a well publicized company policy statement to the same effect.

Link to Decision:

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