At the beginning of the new year, some workers are considering making a move to a new employer and as part of that consideration should assess their obligations to protect confidential information of their former employee including information they have obtained from their former employer’s computer network.
A recent New Hampshire federal court case addresses a dispute between a worker and his former employer over information the worker had obtained from the company’s computer network. In the case of Nucor Steel Marion, Inc. v. Frederick Mauer, IV, the Court dismissed claims by Nucor against its former employee Frederick Mauer for violation of the federal Computer Fraud and Abuse Act, yet left remaining state law claims of misappropriation of trade secrets, breach of duty of loyalty, and unfair and deceptive trade practices and conversion to be addressed at another day.
In the foregoing case, Mauer had been employed from June 1, 2005 until his resignation on March 21, 2010 as an outside sales representative for Nucor; a manufacturer of steel products. On August 6, 2010, Mauer became employed by one of Nucor’s competitors; Gregory Industries. Nucor alleged that Mauer was in conflict with a Confidentiality Agreement he signed as well as his common law obligations to his employer in obtaining and keeping information from Nucor’s computer network. The Court, in reviewing the Complaint of Nucor, found that it failed to allege sufficient details of how Mauer was unauthorized while as an employee in accessing the computer network to obtain data. The Court found that the failure of Nucor to make any allegation that Mauer used confidential information against Nucor’s interest was fatal to its Computer Fraud and Abuse Act claim leaving remaining the state law claims to be addressed later.
While the decision on December 7, 2010 was a victory in a skirmish between Mauer and Nucor, the war rages on. Mauer was asked by Nucor to turn over his personal computer so that they could determine whether or not he kept any confidential information and Mauer had refused resulting in Nucor suing Mauer leaving them both in a lawsuit that will be costly both in time and legal expenses.
For workers considering making a move to a direct competitor, they should first review with their attorney any post-employment obligations they have to their former employer including their confidentiality provisions and any non-compete or non-solicitation agreements. If the worker, after obtaining legal counsel, determines that his agreements with his former employer do not prohibit him from working for a direct competitor, he should still make sure that he does not keep or use any confidential or proprietary information of his former employer in his new job.
For employers considering a new hire from a competitor who offers confidential or proprietary information from its former employer, that employer, in addition to refusing to receive that information, should not hire that person in that he has proven that he is willing to steal when it suits his purposes.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].