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

11 October 2021 Labor & Employment Law Perspectives Blog
Author(s): 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.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services


Foley Automotive Report
06 December 2022
Dashboard Insights
Episode 3: The Future Powered By Hyperscale Cloud Computing with David Sloan of Microsoft
06 December 2022
Innovative Technology Insights
2023 M&A Outlook
05 December 2022
Foley Ignite
COVID-related Form I-9 Remote Verification Flexibilities Extended Through July 31, 2023
05 December 2022
Labor & Employment Law Perspectives
What You Should Know About Payor/Provider Convergence
25-26 January 2023
Los Angeles, CA
ATA EDGE2022 Policy Conference | American Telemedicine Association
7-9 December 2022
Washington, D.C.
CLE Weeks
5-16 December 2022
Milwaukee, WI
Foley Sponsors Ernst & Young Entrepreneur of the Year® Program
1 December 2021 - 30 November 2022
Michigan and Northwest Ohio Region