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Employee handbooks and company policies

Forensic examination of former employee’s laptop can trigger litigation.

Elsewhere on this blog, I’ve cautioned departing employees about downloading confidential, proprietary information from the company laptop to a private computer.  I’ve talked about cases where the employee finds himself the target of a lawsuit for violation of the federal Computer Fraud and Abuse Act. The Massachusetts Supreme Judicial Court has provided new guidance for this situation when an employer sues for breach of contract rather than violation of the Computer Fraud and Abuse Act.

In EventMonitor, Inc. v. Leness, the Court held that an employee did not breach his written confidentiality agreement or misappropriate proprietary information when he uploaded all of his files to a personal online data storage account.  The employer refused to pay the employee an agreed upon severance package of 12 months pay.

The Court held that while the employee’s acts of failing to return and copying the proprietary information was inconsistent with the written confidentiality agreement, it was not, by itself, a material breach of contract.  The essential purpose of the confidentiality agreement is to protect the employer’s proprietary information.  There was no evidence that the employee disclosed the information to a third party.  The employee was not liable for breach of contract just because he copied proprietary information at the same time that a corporate restructuring was being discussed.

Before this decision, an employee could face suit for breach of contract under these circumstances.  Now, the SJC clarified that until and unless there is evidence that the employee used or disclosed this information, there is no valid claim for breach of contract.

Just because the employee may not fear a state breach of contract claim unless such evidence exists, an employee should still tread carefully in order to avoid a federal claim under the Computer Fraud and Abuse Act.

Pamela A. Smith
Law Office of Pamela A. Smith
233 Needham Street, Suite 540
Newton, MA 02464
617-969-2900

pam@pamsmithlaw.com

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