Lower the Gate – Employers Must Take Steps to Restrict Access to Confidential Information

11 October 2021 Labor & Employment Law Perspectives Blog
Authors: Jonathan Michael Thomas

With the proliferation of technology and cloud-based computing, employers often struggle to provide employees with the tools to allow access to the information they need to effectively and efficiently do their jobs while preserving the privacy of confidential and proprietary information. The Computer Fraud and Abuse Act (CFAA) has long been one tool employers could use to prevent current or former employees as well as external business competitors from accessing and using computer information without appropriate authorization. Historically, the CFAA prohibited employees from “hacking” into secured computer databases and obtaining information secured in such databases for their own personal use. 

Some courts also extended the CFAA to apply to an employee who was generally authorized to access information from a secured computer database, but who used such access to obtain information for an unauthorized or improper purpose. This past summer, however, the U.S. Supreme Court in Van Buren v. United States, clarified that the CFAA does not apply in such situations.

In that Supreme Court case, the plaintiff Nathan Van Buren was a police sergeant who, as part of his day-to-day responsibilities, had access to a state law enforcement database containing driver’s license information. Van Buren was only permitted to use the database for law enforcement purposes. A private citizen, however, paid Van Buren to use his log-in credentials to obtain driver’s license information.

Van Buren got caught and was charged with a felony violation of the CFAA, which led to him being ultimately convicted and sentenced to 18 months in prison. Van Buren appealed, arguing that the “exceeds authorized access” clause of the CFAA does not apply to employees who misuse the access that they were given by their employers or who use that access for an improper purpose. The U.S. Supreme Court agreed. The Court determined that the employee’s purpose is not the relevant inquiry, even when that purpose is prohibited by workplace policy or training materials. Rather, the Court held that the CFAA is violated only when employers take steps to prohibit employees from accessing information on computers they are authorized to use and employees circumvent such restrictions for an improper purpose.

In a 6-3 decision, the Court held “if a person has access to information stored in a computer— e.g., in ‘Folder Y,’ from which the person could permissibly pull information—then he does not violate the CFAA by obtaining such information, regardless of whether he pulled the information for a prohibited purpose. But if the information is instead located in prohibited ‘Folder X,’ to which the person lacks access, he violates the CFAA by obtaining such information.” Thus, “liability stems from a gates-up-or-down inquiry—one either can or cannot access a computer system, and one either can or cannot access certain areas within the system.”

While the Supreme Court’s holding narrows the reach of the CFAA, it provides employers with valuable guidance as to what conduct the CFAA actually prohibits. Employers “lower the gate” by taking steps to restrict access to information that they wish to keep employees from improperly using. What exactly those steps need to be, however, is an open question. The Court expressly stated “for the present purposes, we need not address whether this inquiry turns only on technological (or “code-based”) limitations on access, or instead also looks to limits contained in contracts or policies.” Therefore, it is unclear whether employers must password protect files to restrict their access, or if it is enough to merely prohibit employees from accessing computer information in employee manuals. These questions will certainly be the focus of future CFAA litigation.

To ensure the CFAA will protect computer stored information from an employee’s improper use, employers should look to data security best practices.  Such best practices include, but are certainly not limited to: (1) password protect all confidential and proprietary information – such passwords should be updated frequently and only provided to employees who truly have a need to know such information; (2) enable a firewall to prevent unauthorized access into your computer network; (3) Encrypt data that is highly confidential; (4) use a Virtual Private Network (or VPN) to further restrict unauthorized access to your network; and (5) specifically instruct employees about what databases or information is unauthorized and regularly police such databases to ensure that they are not being accessed without proper authorization.

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