Cengage Advantage Books: Fundamentals of Business Law Today 10th Edition by Roger LeRoy Miller

Exercise 13

Suppose that an employee-agent who is authorized to access company trade secrets contained in computer files takes those secrets to a competitor for whom the employee is about to begin working. Clearly, the agent has violated the ethical-and legal-duty of loyalty to the principal. Does this breach of loyalty mean that the employee's act of accessing the trade secrets was unauthorized?
The question has significant implications for both parties. If the act was unauthorized, the employee will be subject to state and federal laws prohibiting unauthorized access to computer information and data, including the Computer Fraud and Abuse Act (CFAA). If the act was authorized, these laws will not apply.
Employees "Exceed Authorized Access"
David Nosal once worked for Korn/Ferry and had access to the company's confidential database. When he left, he encouraged several former colleagues who still worked there to join him in starting a competing firm. He asked them to access Korn/Ferry's database and download source lists, names, and client contact information before they quit. The employees had authority to access the database, but Korn/Ferry's policy forbade disclosure of confidential information.
The government filed charges against Nosal and his colleagues for violating the CFAA, among other things.
Violating an Employer's Use Restrictions Is Not a Crime
A federal appellate court refused to find that the defendants had violated the CFAA. The court ruled that the phrase "exceed authorized access" in the CFAA refers to restrictions on access, not restrictions on use. The court reasoned that Congress's intent in enacting the CFAA was to prohibit people from hacking into computers without authorization.
The court also stated that the CFAA should not be used to criminally prosecute persons who use data in an unauthorized way. "Adopting the government's interpretation would turn vast numbers of teens and pre-teens into juvenile delinquents-and their parents and teachers into delinquency contributors."
Furthermore, "the effect this broad construction of the CFAA has on workplace conduct pales by comparison with its effect on everyone else who uses a computer, smart-phone, iPad, Kindle, Nook, X-box, Blu-Ray player or any other Internet-enabled device."
Critical Thinking
If an employee accesses Facebook at work even though personal use of a workplace computer is against the employer's stated policies, can the employee be criminally prosecuted? Why or why not?