LEGAL GUIDE
Written by attorney W. Scott Hanken | Aug 24, 2016

Sharing of Passwords Under Certain Circumstances Unlawful

Many companies have experienced the departure of an employee and the elimination of that former employees access to the company’s computers and networks. In the recent case of USA v. Nosal, D.C. No. 3:08-cr-00237-EMC-1 (July 5, 2016), the Ninth Circuit Court of Appeals was presented with the following facts: Nosal, a former employee of Korn/Ferry departed and launched a competitive entity. When Nosal left the company, the company revoked his computer access credentials. After his departure, Nosal was nevertheless able to continue accessing the company’s confidential and proprietary information when his former secretary provided Nosal with her database access credentials. In Nosal, the question for the court was whether the jury properly convicted David Nosal of the crime of conspiracy under the Computer Fraud and Abuse Act (“CFAA”) for accessing and downloading information from the company’s database “without authorization.” The Court in a 2-1 decision held that indeed Nosal violated the criminal provisions of CFAA even though he did not himself access and download the information.

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