Wednesday, May 13, 2009

How to recover a stolen computer in four easy steps

story3Pic1 reports that 60% of employees who are laid-off, fired, or quit  admit to stealing company data. I previously reported that it costs an average of $50,000 to replace a stolen computer, with 80% of that value coming from the recovery of sensitive, confidential, and proprietary information. When you put these two pieces of information together, it becomes increasingly apparent that businesses must take proactive steps to protect their technology and data.

According to a case recently decided by a Missouri federal court, employers can use the Computer Fraud and Abuse Act (CFAA) to recover a stolen laptop. The CFAA is a federal law that creates a private causes of action for individuals or businesses damaged by computer fraud. In Lasco Foods v. Hall & Shaw Sales & Marketing, the district court permitted the employer to pursue a claim under the CFAA against two ex-employees who failed to return their laptops after resigning to start a competing enterprise. The ability to use the CFAA in this context is an important weapon for employers, because it allows for the recovery of a variety of damages and costs, including forensic investigation fees incurred in examining the computer after its return.

Yet, litigation is just one step in an overall four-step plan I recommend to secure corporate technology from ex-employees:

  1. Institute a strong Electronic Communication and Technology Policy, making clear that all data and equipment belong to the company, and must immediately be forfeited upon the end of employment.

  2. Remind employees upon termination or resignation of their duty to return all data and equipment, including laptops.

  3. If any data or equipment is missing, enlist the aid of an attorney to send a friendly, yet clear message that unless everything is returned immediately, the company will enlist the aid of a court.

  4. Sue.

Notice that a lawsuit against the employee is step four, not step one. Going to court is the last resort. It should always be the last resort. It is expensive and time consuming. Yet, it many instances it is unavoidable. The CFAA, at least as some courts are interpreting it, provides employers with a key weapon in combating employee theft of computer equipment if one is left with no choice but to sue.

[Hat Tip: EBG Trade Secrets & Noncompete Blog]

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or