Traditionally, claims against current and former employees for misappropriating confidential information by, for example, sending confidential company files to a personal e-mail address, have been matters of state rather than federal law. In the recent United States v. Nosal decision authored by Chief Judge Alex Kozinski, the U.S. Court of Appeals for the Ninth Circuit, sitting en banc, limited the reach of the Computer Fraud and Abuse Act (CFAA)1 to “violations of restrictions on access to information, and not restrictions on its use.”2 It held, therefore, that gaining authorized access to information on a computer system and using such information for a prohibited purposeeven for a fraudulent purposedoes not satisfy the “exceed[ing] authorized access” language of the CFAA. The ruling in Nosal represents the latest, and most important, of a number of recent decisions in which courtsincluding the U.S. District Court for the Southern District of New Yorkhave limited the reach of the CFAA to avoid criminalizing or federalizing computer-related misdeeds by a company’s current and departing employees.
Background
David Nosal was an executive at the Korn/Ferry executive search agency. Shortly after leaving Korn/Ferry, Nosal started a competing business and recruited three former co-workers who were still employed by Korn/Ferry to join him. These employees downloaded and transferred to Nosal confidential source lists, names and contact information from a Korn/Ferry database. Although the employees were authorized to access the database, Korn/Ferry’s computer use policy expressly prohibited them from disclosing the information contained within. All four individuals were subsequently indicted on various counts, including charges of “exceed[ing] authorized access” under the CFAA.
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