Tuesday, December 7, 2010

Employee Handbooks Not Relevant to Whether Computer Use Was Unauthorized Under CFAA (Accenture v. Sidhu)

One of the many unanswered questions surrounding the federal Computer Fraud and Abuse Act has to do with employee policies or handbook provisions.

Put simply, lawyers have been mulling over whether an employer can demonstrate that an employee's computer use was "unauthorized" within the meaning of the CFAA if the employee signs off on corporate policies that put him or her on clear notice of what kind of computer use in the workplace is prohibited. Though policies and agreements vary, one of the central tenets of this practice is to include as an unauthorized use the downloading or transferring of corporate information to a personal e-mail account or thumb drive. Policies also can be written such that information printed or stored off of an employer's computer server may not be used for competitive purpose, and that if the employee does so, such use will be considered unauthorized.

These policies are designed to expand an employer's remedies for unfair competition. But do they?

According to one recent federal court, the answer is "no." The case of Accenture, LLP v. Sidhu deals with the impact of policies very similar to those identified above. Because the employee allegedly violated those policies, Accenture filed suit in federal court under the CFAA. (In California, this issue is critical given its long-standing policy against post-employment restraints.)

The court dismissed the claim and noted that "[t]he relevant inquiry is whether the employer allowed the employee use of the computer system, irrespective of whether the employer would have revoked permission if it understood the employees' intent, or knew about the employees' conduct." The court also noted that a carve-out exception would undermine existing precedent and, more fundamentally, graft "corporate policy into the substance of the CFAA."

Policies like those above, however, still are very useful for employers. For one, it can help establish breach of contract, may eliminate an employee's rights to severance pay, and demonstrate knowledge of wrongful conduct.


Court: United States District Court for the Northern District of California
Opinion Date: 11/9/10
Cite: Accenture, LLP v. Sidhu, 2010 U.S. Dist. LEXIS 119380 (N.D. Cal. Nov. 9, 2010)
Favors: Employee
Law: Federal

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