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The Labor & Employment Report

Ex-Employees Accessing the Company’s Computer System

Posted in HR Compliance, Laws & Regulations

A departing employee accesses the company’s computer system on his way out without authorization and takes data.  What remedies can the company pursue?

The company can contact law enforcement officials, as that conduct likely constitutes a crime.  In addition, the company can file a civil complaint in court against the ex-employee, asserting claims such as trespass, conversion, or even a breach of the duty of loyalty.

The company can also take advantage of the civil remedies available under the Computer Fraud and Abuse Act.  This law has been found to apply where an employee continues to access a company’s computer system without authorization or for an illicit purpose after the employee accepts a job with another employer. For example, where an employee sends confidential information to his new employer before leaving the current position, the employer can bring an action in federal court against the disloyal employee and the new employer for losses caused by the unauthorized access, as well as consequential damages that include costs associated with security updates or enhancements to the company’s computer systems.  Because companies that knowingly receive another firm’s data may be held liable under this law, new hires should be instructed not to take any information from their former employers without express written permission from that employer.