South-Western Legal Studies in Business

Destroying Valuable Computer Files Terminated Agency Relationship
Description Appeals court held that an employee violated the Computer Fraud and Abuse Act by deleting valuable and unique files from his computer before he quit the firm. That act violated his duty of loyalty and immediately terminated the agency relationship.
Topic Agency
Key Words Loyalty; Employee; Computer Fraud and Abuse Act
C A S E   S U M M A R Y
Facts Citrin worked for IAC to identify properties that IAC may want to acquire. IAC provided Citrin a laptop to use to record data about potential properties. Citrin quit IAC to go into business in competition with it. Before returning the laptop, he deleted all work-related data on the machine, including some data that would have revealed improper conduct prior to his quitting. Citrin used a special program that destroyed his files, preventing them from being recovered. IAC sued him for violating the Computer Fraud and Abuse Act. It states whoever “knowingly causes the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causes damage without authorization, to a protected computer” is in violation of the Act. The district court dismissed the suit, holding that deleting information on a computer does not involve a “transmission” as required by the Act. IAC appealed.
Decision

Reversed and remanded. Installing a secure-erase program on IAC’s computer, by downloading the program from the Internet or by copying it from a disk on to the computer, was a “transmission” of a program that resulted in damage to a protected computer and “intentionally accessed” the computer in a way that was “exceeding authorization” in violation of the Act. That violated his duty of loyalty to IAC and at that point the agency ceased to exist. The “authority of an agent terminates if, without knowledge of the principal, he acquires adverse interests or if he is otherwise guilty of a serious breach of loyalty to the principal.”

Citation International Airport Centers v. Citrin, 440 F.3d 418 (7th Cir., 2006)

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