No, it’s not an acronym advising you to come to dinner with your favorite vintage of pinot noir. BYOD stands for Bring Your Own Device, a movement that’s changing the landscape of information technology at workplaces across the globe. In the “old days,” companies issued electronic equipment to employees for work use. Today, employees want to use the latest electronics of their own choice for both work and play. Surveys consistently show that companies are giving in to such requests, citing the benefits of increased productivity and morale, as well as cost savings from not having to buy the equipment themselves. However, BYOD programs also create legal risks for companies, including:
- Violation of labor laws like the Fair Labor Standards Act due to the ability of workers to rack up overtime by doing work on personal devices practically anywhere and at any time, whether or not such overtime is authorized by management
- Violation of laws prohibiting disclosure of the private information of customers, clients, or patients, such as the Health Insurance Portability and Accountability Act and the Gramm-Leach-Bliley Act
- Inadvertent disclosure of proprietary company information, which jeopardizes their confidentiality, and as a result, their status as protected trade secrets
- Complicating the e-discovery process, because electronic data that fall within the scope of a discovery request may reside on devices besides those under the direct control of the company
In light of these risks, the knee-jerk response of management might be to forbid BYOD entirely, but that is not necessarily the best approach. BYOD is more prevalent than one might think. A form of BYOD is in play whenever someone stores work data on a personal cloud storage account, uses a personal laptop to draft a memo for work, or forwards work-related word processing files to a private email account for easy access from home. A company need not officially adopt a BYOD program to have one, which is all the reason why management should be proactive about putting BYOD policies in place.
Learn about the specific risks that a BYOD program creates for your company. Develop guidelines on acceptable and unacceptable use of personal devices for work-related purposes. Notify employees of the policies in writing and provide training. Don’t wait until it’s too late!
Want more tips on BYOD? Come to the Advanced Employment Issues Symposium in Las Vegas from November 13-15, where I’ll be giving a presentation on “BYOD Challenges: When Employees Bring Their Own Devices to Work.” Registration information is available at www.aeisonline.com.
Employer sues ex-employee for not updating his LinkedIn profile — Jefferson Audio Visual Systems, Inc. v. Light, 2013 WL 1947625 (W.D. Ky. May 9, 2013).
What would you do if your ex-employee told everybody he still works for you? One company’s response was to sue. In the first case of its kind, the company decided to sue its former employee for fraud for not updating his LinkedIn profile.
Jefferson Audio Visual Systems, Inc. (JAVS) fired its sales director, Gunnar Light, after he mishandled a potentially lucrative deal and made defamatory statements about JAVS to a prospective customer. Shortly afterwards, JAVS filed a lawsuit against Light alleging various claims, including fraud. JAVS argued that Light was fraudulent in failing to update his LinkedIn profile to reflect that he was no longer a JAVS employee. A Kentucky federal court dismissed the fraud claim because JAVS failed to show that it was defrauded by Light’s LinkedIn profile. At most, JAVS alleged that the profile tricked others. Under Kentucky law, a party claiming fraud must itself have relied on the fraudulent statements.
LegalTXTS Lesson: JAVS’ actions against its ex-employee might have been rather extreme, but the case is a reminder that ex-employees can leave behind an electronic wake that is damaging. Because computer technology is an integral part of work life, management needs to be intentional in disengaging ex-employees from the electronic systems and online persona of the organization. Each organization must determine for itself what measures for dealing with such post-termination issues are feasible, effective, and consistent with its objectives, but here are some suggestions:
1. Promptly update the organization’s website, social media profiles, and any other official online presence to reflect that the former employee no longer works for the organization.
2. Specify who owns Internet accounts handled by the ex-employee for the organization’s benefit and the information stored in the accounts. This includes social media accounts and cloud storage accounts (e.g., DropBox, Google Drive, SkyDrive) to the extent they contain proprietary data. As part of this measure, be sure to obtain the information needed to access the accounts, including any updates to login credentials.
3. Restrict the amount of access to which former employees, as well as current employees whose departure is imminent, have to workstations, databases, and networks of the organization. Limiting access helps to prevent theft of trade secrets and proprietary information. Many CFAA lawsuits have been spawned by a failure to take this precaution.
4. Check if the employee left behind anything that would enable him or her to gain unauthorized access to company systems, like malware, viruses, or “back doors.”
5. Enable systems that allow of erasure of the organization’s data from electronic devices used by the ex-employee to remotely access the work network, such as smartphones, laptops, and tablet computers.
6. Establish guidelines on employee use of the company’s intellectual property on personal internet profiles (e.g., Facebook, Twitter, LinkedIn), including trademarks and trade names.
The Computer Fraud and Abuse Act (CFAA) criminalizes forms of “hacking” other than actually breaking into a computer system — United States v. Nosal, 2013 WL 978226 (N.D .Cal. Mar. 12, 2013)
Nosal is back. This is the case that spawned a Ninth Circuit decision narrowing the reach of the CFAA to hacking activity. The case returned to the trial court after the Ninth Circuit decision. The trial court recently convicted the defendant (David Nosal) of violating the CFAA. But before analyzing the decision, let’s take a brief look at the background.
Nosal is a former employee of Korn/Ferry, an executive search and recruiting firm. After leaving Korn/Ferry, Nosal obtained access to Korn/Ferry’s confidential and proprietary data with help from others. In some instances, Nosal got Korn/Ferry employees to give their passwords to outsiders to enable them to access the firm’s computer systems. In another instance, a Korn/Ferry employee logged onto the firm’s computer system using her password and then allowed a non-employee to use the system. Nosal used the stolen data to start his own executive search business. Nosal and his co-conspirators were indicted for violating the CFAA by exceeding authorized access to Korn/Ferry’s computers “knowingly and with intent to defraud.”
An en banc panel of the Ninth Circuit held that the CFAA’s prohibition on accessing computers “without authorization” or “exceeding authorized access” is limited to violations of restrictions on access to information, not restrictions on its use. The Ninth Circuit reasoned that the CFAA primarily targets hacking rather than misappropriation of information. The Ninth Circuit returned the case to the trial court to determine if Nosal violated the CFAA under its interpretation of the statute.
Nosal tried to persuade the trial court to push the Ninth Circuit’s rationale one step further. Nosal argued that, since the CFAA is an anti-hacking statute, it is violated only when someone circumvents technological barriers to access to a computer. Under this narrow interpretation, not every form of unauthorized access to a computer necessarily violates the CFAA. The trial court disagreed with Nosal’s interpretation because the Ninth Circuit did not base CFAA liability on the manner in which access is restricted. Moreover, password protection is a form of a technological access barrier, and Nosal and his co-conspirators clearly bypassed password restrictions.
Nosal next argued that his co-conspirators did not act “without authorization” because they used a valid password issued to a Korn/Ferry employee. The court wasn’t enamored with this argument either. Whether an act is authorized must be viewed from the perspective of the employer who maintains the computer system. Clearly, an employer would not authorize an employee to allow another person to use his or her password. Nosal attempted to analogize consensual use of an employee’s computer password to consensual use of an employee’s key to gain physical access to a building, a situation that Nosal argued would not violate trespass law. The court also rejected this argumen.
Finally, Nosal argued that the Korn/Ferry employee who engaged in “shoulder surfing” (i.e., logging into the firm’s computer system and then letting another person use the system) did not engage in unauthorized “access.” The court found no difference between an employee who gives her password to an outsider and an employee who logs into the firm’s computer system with her password and then lets an outsider use the system. Both situations qualify as “access” under the CFAA.
LegalTXT Lesson: The CFAA targets hacking instead of misappropriation (so the Ninth Circuit says), but hacking could take various forms. According to the latest Nosal decision, the CFAA criminalizes at least these forms: (a) breaking into a computer system; (b) letting an outsider use your password to access a system; (c) logging into a system with your password and then letting an outsider use the system.
Sharing a link to unauthorized video capture of proprietary information is not a violation of Stored Communications Act—Castle Megastore Group, Inc. v. Wilson, 2013 WL 672895 (D. Ariz. Feb. 25, 2013)
In closing arguments to the jury at the O.J. Simpson murder trial, defense attorney Johnnie Cochran famously quipped, “If it doesn’t fit, you must acquit.” Plaintiff’s attorneys looking to add a Stored Communications Act (SCA) claim to their complaint would do well to heed Cochran’s advice. There have been a rash of cases dismissing ill-fitted SCA claims (see my recent posts here and here). Castle Megastore Group, Inc. v. Wilson is the latest.
Castle Megastore Group, Inc. (CMG) sued its former employees for allegedly sharing confidential company information with other companies while they were still employed at CMG. CMG claimed that Flynn, who was employed by CMG as its “Social Media Specialist,” violated the SCA by posting a video of a confidential CMG managers meeting on Vimeo, a third party website, and sending co-workers the link to the video and the password to his personal Vimeo account.
This scenario didn’t fit into within the prohibitions of the SCA, the court said. CMG argued that Vimeo was an “electronic communication service” within the meaning of the SCA, that the defendants knew the video contained confidential content before accessing it, and that Flynn lacked authority to give others access to the video. The court agreed that Vimeo is an electronic communication service, but Vimeo is where Flynn shared the video, not where he obtained it. The CMG did not allege that Flynn obtained the video through unauthorized access to a CMG-owned electronic communication service. Flynn was authorized to grant access to his personal Vimeo account. Sharing a link and password to that account did not violate the SCA, the court ruled.
LegalTXTS Lesson: Read the SCA carefully before making a claim under it. Understand how the various concepts in the statute (like “access,” “without authorization,” “facility,” and “electronic communication service”) fit together. Just because one or more of the concepts is present in a given situation doesn’t mean you’ve a viable SCA claim.
Court Finds That State Law Claims Against Online Forum Operator For Misappropriation, Theft, and Tortious Interference Hinge on “Publisher” or “Speaker” Status–Stevo Design, Inc. v. SBR Marketing Ltd., 2013 WL 308996 (D. Nev. Jan. 25, 2013)
A Nevada federal court held that Communications Decency Act (CDA) immunity barred state tort claims asserted in a lawsuit involving the dissemination of sports betting information. The court’s holding was based on a liberal interpretation of what it means to be a “publisher” or “speaker” under section 230 of the CDA.
Stevo Design, Inc. (Stevo) sells licenses for access to its sports betting reports. SBR operates a website with a discussion forum where users may post messages relating to sports betting and handicapping and to send messages to other users. SBR encourages activity on its website by awarding loyalty points to users for doing different things on the website, including posting original content. The loyalty points may be redeemed for credits at offshore gambling websites. Stevo claimed that SBR and its users published Stevo’s protected works on the SBR website without obtaining a license.
In addition to bringing claims for copyright and trademark infringement, Stevo asserted a slew of state-law claims against SBR. SBR asked the court to dismiss these state-law claims. The court first determined if SBR qualified for CDA immunity. The key question was whether SBR had a hand in developing the online content at issue. If so, then SBR does not enjoy CDA immunity.
Relying on Fair Housing Council of San Fernando Valley v. Roomates.com, 521 F.3d 1157 (9th Cir. 2008), the court concluded that SBR did not “develop” the offending online content. SBR encouraged its users to post original content. It did not specifically encourage its users to publish information illegally on the website. The fact that SBR users could freely contribute loyalty points to each other further evidenced the minimal role that SBR played in monitoring the content of forum posts. That SBR “sporadically” tried to eliminate infringing content did not persuade the court that SBR was a developer of unlawful content—the CDA allows interactive computer services to perform some editing of user-generated content without becoming liable for all unlawful messages they do not edit or delete.
Having determined that SBR qualified for CDA immunity, the court next considered the impact of immunity on the state-law claims. CDA immunity effectively precludes the operator of the interactive computer service from being considered the “publisher or speaker” of user-generated content. As a result, only claims requiring the defendant to be the “publisher or speaker” are barred by CDA immunity. Applying the meaning of “publisher or speaker” status liberally, the court concluded that CDA immunity barred each of the state-law claims:
Misappropriation of trade secrets: Misappropriation involves either “acquisition” or “disclosure” of a trade secret. The court easily found that “disclosure” of trade secrets through user posts on the SBR website to require there to have been publishing or “speaking. The court found “acquisition” to be a closer question, but the only kind of acquisition alleged in the complaint involved user posts on the SBR website, so the CDA barred that kind of misappropriation as well.
Misappropriation of licensable commercial property: The court is not sure such a claim exists under Florida common law, but assuming it is a form of misappropriation, the plaintiff must have suffered competitive injury due to the defendant’s taking of information. Stevo alleged that SBR injured it giving away its copyrighted information for free. The only way SBR could have done that was by disclosing the information, i.e., it acted as a publisher or speaker.
Contributory misappropriation of licensable commercial property: This claim merely required that SBR induced others to speak or publish. The court refused to allow circumvention of CDA by alleging that the defendant induced publication or speech instead of itself doing the publishing or speaking. Since SBR did not tell users what kind of information to include in their posts or encourage infringing content, it enjoyed immunity from this claim.
Civil theft: Common law theft is defined as obtaining or using the property of another with intent to appropriate the property to his or her unauthorized use. The only plausible way SBR procured or used Stevo’s property was through publication. This claim is barred.
Tortious interference with contractual relations: This claim requires interference with a business relationship. The only interference that could be inferred from the complaint involved SBR’s publication of Stevo’s works. As this claim depended on SBR’s status as the publisher, it is barred.