Any employer whose computer network or system has been accessed and damaged by an authorized individual may bring a cause of action through a criminal statute known as the CFAA and pursuant to 18 U.S.C. § 1030. Through the provisions of this statute, an employer is empowered and given a chance to assert a claim against a former or current employee who has accessed a business computer(s) or network system(s) and steals or misappropriates confidential information and/or trade secrets.
Having explored the CFAA and the benefits employers may enjoy by bringing claims under the statute in the previous blog, we have switched gears to focus on “Common Law Tort Claims under the UTSA and DTSA.” As the title suggests, we have started with state law preemption of tort claims under the Defend Trade Secrets Act (DTSA) and Uniform Trade Secrets Act (UTSA) in this blog post and Part XII of the series.
State Law Preemption of Tort Claims under the DTSA & UTSA
When it comes to the law of torts, the doctrine of “preemption” refers to the notion that when two authorities of law come into conflict, the law of the lower authority would be displaced by a higher authority of law. Generally, common law tort claims brought against former employees are often preempted through state statutes that prohibit trade secret theft in many states, especially in those states where some version of UTSA has been adopted. Over the past several years, a number of common tort claims, including, but not limited to, unjust enrichment, unfair competition, conversion, breach of fiduciary duty, tortious interference with business relationships, and common law trade secret misappropriation, have been preempted.
However, in cases where material variations arise between the statutory trade secret misappropriation claim and the wrongdoings alleged in the tort claim, common law tort claims are allowed to proceed in many jurisdictions. For example, if a tortious interference claim by a plaintiff is found to be based on the attempts of the plaintiff to solicit employees and/or customers of a former employer and not merely on the theft of trade secret(s), then a court is likely to allow such a claim to proceed. Furthermore, even if a plaintiff fails to prevail on a trade secret claim, a court may determine that the plaintiff should prevail on a tortious interference claim if the distinction between trade secrets and confidential information is established in the court.
Elsewhere, courts have ruled that if information falls outside the definition of trade secret, then a tort claim may not be displaced by the trade secret statute, as is the case in the state of Arizona. Accordingly, the doctrine of “preemption” underscores the need for employers to have their counsel review state law thoroughly with the aim of determining those claims that they can bring in synchrony with state statutory claims on the misappropriation of trade secrets.
In Part XIII of this series and our blog post titled “Breach of Fiduciary Duty Claims under the DTSA and/or UTSA,” we will move the discussion forward by hammering on “Breach of Fiduciary Duty,” which is another common law tort claim that may be brought under the DTSA and/or UTSA.
As usual, while you should strive to be #UnusuallyMotivated, stay tuned for more education, training, and legal guidance. In the meantime, reach out to us with questions or comments via our website’s Contact Us page!
Always rising above the bar,
Isaac T.,
Legal Writer, Author, & Publisher.